File photo: Traders work at the Egyptian Stock Exchange in Cairo (Photo: Reuters)
Egyptian stocks continued their downward trend for the fourth consecutive day on Thursday, with the benchmark EGX30 index losing 1.31 per cent of its value, despite gains by two of the market’s biggest-cap shares. The broader EGX70 index, meanwhile, declined by 1.52 per cent for the day.
Of all the stocks listed on the EGX30, only Orascom Construction Industries (OCI) and Mobinil ended the day in the green, rising by 0.80 and 0.63 per cent respectively.
"These two shares offset the day's market losses, given their relatively heavy weight in the index," said Ashraf Abdel-Aziz, head of institutional sales at Cairo-based brokerage Arabeya Online. He went on to point out that the combined weight of the two heavyweight shares represented some 30 per cent of the entire EGX30.
According to Abdel-Aziz, Egypt's bourse would have lost another 1 per cent for the day if it hadn't been bolstered by the two stocks' gains.
OCI shareholders have approved a plan to separate the firm's construction and fertiliser businesses into two new companies, the group announced on Thursday.
"This is positive news," said Abdel-Aziz. "The planned demerger is expected to make the company's operations more efficient, allowing each to focus entirely on its respective specialty."
Beltone Financial analyst Omar Taha told Ahram Online that OCI's demerged construction business would likely prove profitable for both large and small shareholders alike. "All of OCI's shareholders are expected to profit from this move," he said.
According to OCI spokesman Hassan Badrawi, the company's small shareholders had been "the first to approve the decision."
Shares in Mobinil, meanwhile, were fired on Thursday by the imminent finalisation of a major deal with France Telecom.
Of 179 shares listed on the exchange, only 37 registered gains for the day while 154 declined in value and eight remained unchanged. Total daily turnover, meanwhile, stood at LE372 million.
Most heavyweights traded downward for the day, including Telecom Egypt and Orascom Telecom Holding (OTH), which fell by 2.87 and 3.38 per cent respectively.
Foreign institutions appeared to lead the market exodus, selling off some LE30 million worth of stocks. Egyptian and Arab investors, meanwhile, represented net buyers for the day.
Abdel-Aziz expects the market to reverse its downward trajectory in the event that Egypt's political situation remains stable in the run-up to the country's first post-Mubarak presidential polls, slated for 23 and 24 May.