Market Report: Egypt stocks slip 0.5 pct on foreign profit-taking

Ahram Online, Wednesday 9 May 2012

Main index sees its first loss in five sessions as institutions take advantage of recent gains for heavyweight shares

Egypt exchange
Gainers are outnumbered by losers in Wednesday trade (Photo: Reuters)

Egyptian stocks slipped back into the red on Wednesday, taking their first losses in five trading sessions as foreign institutions upped their sales in a wave of profit-taking.

The benchmark EGX30 slid 0.48 per cent to 5,032 points by the close of play, hobbled by significant sell-offs in financial sector stocks. 
The index hit a seven-week high on Tuesday, underpinned by optimism for a smooth presidential election and the first increase in foreign reserves since 2010.
"The market fell on profit-taking, mainly from foreign institutions on shares like OCI and EFG-Hermes," one trader at a major brokerage firm who requested anonymity told Ahram Online.
Market turnover was LE332.5 million ($55.1m) on Wednesday, slightly down on the previous session, with mobile operator Mobinil seeing the largest chunk -- some 15 per cent -- of trade.
Stocks in the mobile firm continued to benefit from its imminent takeover by France Telecom, edging up 0.18 per cent.
But selling pressures had an effect on Orascom Construction Industries (OCI) and EFG-Hermes -- the latter of which has recently seen large gains on the news of its part in a future Qatar-based regional investment bank.
Both firms dipped around 2 per cent as institutions moved to take profits. The downturn in EFG-Hermes shares was mirrored across the financial sector, with the Commercial International Bank slipping 0.46 per cent and Citadel Capital dropping 1.79 per cent.
Foreign investors made up 14 per cent of the day's trade and sold LE17.6 million more in stocks than they bought.
Some commentators dismissed the idea that foreign sales were due to political worries, saying forthcoming presidential elections were being viewed with relative optimism by investors outwith Egypt.
"If foreigners kept on the buying side in March 2011, why should they change now?" asked the trader. 
"For Egyptians, they watch TV and see violent incidents and this reflects on the [lower cap]stocks they're involved with."
The broader EGX70 index slipped 0.11 per cent on the weak performance of smaller shares. From the day's 168 listed stocks, 64 gained in value while 88 declined and the rest held steady.
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