Market Report: Egypt stocks fall 2 pct as election worries mount

Ahram Online, Sunday 20 May 2012

Investors stick to the sidelines, minimising losses ahead of Wednesday's stiffly contested presidential elections

Egypt exchange
All but 3 heavyweight stocks takes losses ahead of Wednesday's elections (Photo: AP)

Egyptian stocks saw their fifth-straight loss on Sunday, with the main index falling to a four-week low as investors cut their exposure to the market days before a stiffly contested presidential election.

The benchmark EGX30 fell 2.01 per cent to 4,792 points by the end of Sunday's session, hobbled by foreign sell-offs of all but three heavyweight stocks. The broader EXG70 slipped 1.11 per cent, reflecting similar caution on the domestic front.
 
"It just looks like a safer bet to stay on the sidelines," Teymour El-Derini of Naeem Brokerage told Reuters.
 
"If the vote goes smoothly then we will see a hike in share prices, but it won't be 10 per cent. But if things go bad in the elections, then it's best to be out."
 
Presidential elections, due to begin Wednesday, will see Egyptians freely choose their leader for the first time.
 
From the 168 shares traded on Sunday, 119 took losses and just 15 posted gains. All market sectors either finished in the red or refused to budge.
 
Total turnover was LE246.16 million ($40.7m), with interest focusing on Mobinil, still riding a wave of good will on its imminent sale to France Telecom which will see shareholders paid LE202.5 per share.
 
The mobile operator saw LE49.94 million of trade, eking out a tiny 0.01 per cent gain by the close of play. 
 
"Investing in Mobinil right now is bringing rewards for investors," said Ashraf Abdel-Aziz, head of institutional sales at Cairo-based brokerage Arabeya Online. "The fact that income is almost guaranteed [from the buyout] make it better than saving money in the bank."
 
Telecom Egypt, up 1.36 per cent, was the market's only bonafide high-profile winner. 
 
Other heavyweights took significant losses, none more so that investment bank EFG-Hermes, which saw its shares plunge 5.1 per cent. 
 
The firm had charted strong gains over the last week, boosted by news of its agreement with Qatar's Qinvest to found a regionwide investment bank. 
 
Also taking a toll on the EGX30 were losses for the country's largest listed firm Orascom Construction Industries, down 2.8 per cent, and the Commercial International Bank, a bellweather of foreign participation, which dipped 1.9 per cent.
 
Sunday's diminished trade saw unusually large participation by foreign investors, making up 36 per cent of the market. Marginal net-sellers, they offloaded LE1.8 million more stock than they bought.
 
Egyptian individuals made up bulk of trade but were also net-sellers to the tune of LE9.49 million.
 
"The elections are causing stress and instability in the market," admits Abdel-Aziz. 
 
"It seems that almost all presidential candidates have similar chances so it's hard to judge who will win and what effect that will have on business and the market."
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