Market Report: Egypt stocks fall 1.8 pct amid caution over Mobinil deal

Ahram Online, Sunday 11 Mar 2012

Delay in the sale of the high cap telecoms firm and unfavourable company results take their toll on Egyptian shares

Egypt exchange
Across-the-board losses for Egypt's exchange as investors exercise caution (Photo: Reuters)

Egypt's stock exchange failed to get off the blocks in the week's opening session as investors waited for positive economic news before reinjecting funds into a troubled market.

The EGX30 benchmark fell 1.79 per cent to close out Sunday at 5,300.3 points, deepening its losses from last Thursday. The index climbed just 0.5 per cent in the previous week with the main index faltering in the final trading session amid fears of large-scale Friday protests which did not materialise.
"The lack of any fresh news about the sale of Mobinil after a lot of anticipation means investors are starting to think about selling," capital markets expert Ahmed Abdel-Hamid told state-run MENA news agency, suggesting the caution over dealing the firm was symptomatic of market sentiment as a whole.
"The strong indicators of a potential delay [in the sale of a majority stake to France Telecom] is building pressure to sell," he said.
The mobile services operator has been a major market-driver over the last month as a result of the agreed deal, with its shares seeing average daily gains of over 2 per cent. 
With the deal still not completed, despite France Telecom's assurance it would take "a few weeks", investor sentiment is beginning to cool. As investors offloaded stocks, Mobinil finished Sunday down 1.19 per cent.
Total market turnover on Sunday was LE562.3 million. From the day's 179 listed stocks, 39 gained in value while 132 declined and eight remained stable, reflected in the performance of the broader EGX70 which slipped 0.91 per cent.
Non-Egyptian Arabs were the major sellers, offloading a net LE19.46 million in stocks. Egyptians and other foreigners picked up the balance, fuelled in the former case by hardened individual investors.
High-cap stocks mirrored Mobinil's retreat, with the market's two other telecoms firms soaking up the more substantial losses. 
Shares in Orascom Telecom tumbled 3.34 per cent, while its former stablemate Orascom Telecom Media Technology slipped 2.63 per cent.
But the malaise affected all market sectors, with food and beverages, banks and real estate all losing about 2 per cent.
Egypt's largest firm, Orascom Construction Industries, took a dip too, losing 1.22 per cent, as did major players in the real estate sector, the Talaat Moustafa Group and SODIC.
Cablemarket Lecico saw its stock plunge 4.56 per cent, a clear result of the net losses of LE22.5 million for 2011 which it reported last Thursday.
Dairy producer Juhayna also took a hit, finishing Sunday down 3.13 per cent, despite a statement outlining a modest drop in profits for 2011 and its expansion plans for the coming year.
Egypt's leading maker of juices, yoghurt and dairy said its net-profits fell to LE186 million in 2011, down from LE228 million the year before.
Juhayna also outlined plans for LE750 million of investment in 2012, including construction work on a yoghurt plant and six new distribution centres.
Technical factors also played a part in Sunday's dip, added Abdel-Hamid, who said most experts forecast a dip when the EGX30 climbed substantially over the 5,200-points, a key support level.
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