A tense trader eyes the figures below an index board at Cairo's stock exchange (Photo: Reuters)
Egyptian stocks climbed for their second consecutive session on Thursday, extending their recovery amid expectations that a controversial, long-awaited $3.2 billion IMF loan deal was close.
The benchmark EGX30 gained 1.55 per cent to close at 5,169 points, bringing its year-to-date gains to 43 per cent. The broader EGX70 index edged up 0.85 per cent but remained under the key 500-point support level.
"The market is still in the phase of correction and many stocks are at critical levels," said Mohamed Metwally, an equity trader at Prime Holdings, adding that it was unclear how the market will perform in future. "Turnover today doesn't suggest how the market will behave in the coming sessions."
Market turnover on Thursday reached LE496 million, a level slightly lower than the average of the last couple of weeks.
Egypt is seeking a $3.2 billion emergency loan from the International Monetary Fund that may pave the way for funding from other donors. A delegation from the IMF is expected to visit Cairo in the coming week.
"[The IMF funding's] impact on the financial sector will be very positive and will influence the valuation of companies to the upside," Chamel Fahmy of Pharos Securities told Reuters.
The basic resources sector say the day's largest gains, powered upwards by the performance of Egypt's biggest steelmaker, Ezz Steel, which gained 6.35 per cent to close at LE7.37 per share.
The real estate sector, which made up 15 per cent of the day’s total turnover, gained an overall 2.95 per cent.
Palm Hills Development (PHD), the second largest listed real estate firm rocketed 4.12 per cent. Fellow heavyweight the Talaat Mostafa Group gained 3.26 per cent to close at LE4.43 per share..
"These stocks lost a lot of ground since the beginning of the week, so they are just returning to their regular levels," Metwally said.
The day's most active stock was Orascom Telecom Media Technology (OTMT), which saw 14 per cent of total turnover. It gained 2.05 per cent to close at LE1.49 per share.
"The market is hearing rumours that the Mobinil deal will take place in the coming week so OTMT is reacting to that,” Metwally added.
OTMT announced in February that it will sell its share in Egyptian mobile venture, Mobinil to France Telecom. News of the deal and the distribution of some of its profits to OTMT shareholders prompted a surge in the firm's stocks.
From 182 traded shares today, 133 gained value while 32 slipped and the rest failed to budge.
Egyptian investors were the main buyers in the session, at LE28 million they made up around 70 per cent of total turnover. Non-Arab foreign investors contributed to a quarter of the day’s trading, net-selling LE27 million worth of stocks.
Market leaders, Orascom Construction Industries (OCI) and Commercial International bank (CIB) gained 0.67 and 2.73 per cent respectively.
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