Market Report: Egypt stocks rise on stable overseas voting

Ahram Online, Sunday 13 May 2012

EGX30, EGX70 both register gains on Sunday on back of political stability at home and smooth launch of expat-voting process abroad

Main index gains but investors are still worried (Photo: Reuters)

Egypt stocks saw significant gains in this week's opening session, which loosely coincided with the beginning of the expat-voting period in Egypt's first post-Mubarak presidential polls.

The benchmark EGX30 index rose by 1.3 per cent on Sunday, to alight at 5,083 points. The broader-based EGX70 index also rose for the day by 1.3 per cent.  

"The lack of any major political demonstrations on Friday and the smooth start of the expatriate-voting process overseas both served to encourage investors," said Ashraf Abdel-Aziz, head of institutional sales at Cairo-based brokerage Arabeya Online.

Since Friday, Egyptian expatriates have been casting ballots for the country's next president at Egyptian embassies and consulates around the world. Roughly 587,000 Egyptians resident overseas have registered to vote. The expat voting period will end on 17 May.   

All sectors traded into the green on Sunday, led by the financial-services sector, daily turnover for which reached some LE82.4 million – 30.5 per cent of the day's total turnover, which stood at LE269.4 million.

Despite the financial sector's good showing, blue-chip stock EFG-Hermes declined by 1.2 per cent for the day, making it the EGX30's only loser on Sunday.

"The Qinvest deal remains ambiguous, so investors are selling their shares until the transaction is confirmed," Abdel-Aziz told Ahram Online.

In early may, EFG-Hermes announced that it had reached an agreement – originally announced in March – to establish a region-wide investment bank with Qatari investment bank Qinvest.

According to the terms of the deal, Qinvest will control 60 per cent of the new bank – to be called 'EFG-Hermes Qatar' – and pump $250 million into the new project.

All other blue-chip shares, meanwhile, closed up for the day, led by Orascom Construction Industries and Commercial International Bank, which gained by 2.4 and 0.7 per cent respectively.

"Investors were also inspired by a new report from Goldman Sachs, valuating OCI shares at LE487 each, even though the share currently retails for about LE280," Abdel-Aziz explained.

In the telecoms sector, meanwhile, Orascom Telecom and Mobinil rose by 1.5 and 0.2 per cent, respectively, for the day. In real estate, shares in luxury developer Palm hills jumped by 3 per cent, while Ezz Steel rose by 1.6 per cent.

Foreign investors were the day's only net sellers, unloading LE38 million in shares. Egyptian and Arab investors, meanwhile, were the day's net buyers, picking up LE24.3 million and LE13.6 million worth of stock.

"Foreign investors' performance in the Egyptian market remains shaky, since most are still waiting to see the results of the upcoming presidential election," Abdel-Aziz said.

Out of 175 stocks listed on the exchange, 144 recorded gains on Sunday while 17 suffered losses.

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