Market Report: Egypt stock trade tumbles to 2012-low as investors hunker down

Ahram Online, Wednesday 6 Jun 2012

Trade volume tumbles and the main index slips 0.4 per cent as both locals and foreigners rein in their participation

Egypt exchange
Down for the count? Trade slumps to lowest in six months (Photo: Reuters)

Egyptian stock trade tumbled to its lowest level in 2012 on Wednesday with heavyweight shares taking minor losses as investors limited their exposure ahead of a crucial presidential runoff.

The benchmark EGX30 slipped 0.4 per cent to close out the session at 4,484.7 points. 
 
Trade volume fell to just LE147,680 ($24.457m), its lowest point since 25 December 2011 when foreign investors reined in their involvement due to the Christmas holidays.
 
"Everyone wants to know a clear picture of what is going to happen to this country. For now there is very minimal participation from locals and foreigners," Amr Reda from Pharos Securities Brokerage told Reuters.
 
The last stage of voting on 16 and 17 June will pit Ahmed Shafiq, Mubarak's last prime minister and an admirer of the deposed leader, against the Muslim Brotherhood's Mohamed Morsi.
 
Egyptian believe Shafiq has the backing of the powerful army, while the Brotherhood has a formidable grassroots following and a well-organised campaign machine, making the outcome a tight-run thing.
 
Investors quoted by Reuters suspect a Shafiq win could spark far bigger protests on the streets. In the runup to the vote, trading on the Cairo stock exchange has been muted.
 
From the 163 stocks traded on Wednesday, 61 gained in value and 74 declined. Scattered interest in lower-cap firms saw the broader EGX70 index edge up 0.21 per cent.
 
Unusually, foreign investors were the only overall buyers, albeit at a modest level, scooping up LE4.77million more in stocks than they bought.
 
The main index was a fairly clean three-way  split between losers, gainers and stocks that held their value.
 
Real estate and financial services stocks saw the only overall good news, the latter boosted by interest in EFG-Hermes. The investment bank saw a sixth of overall trade -- some LE29.25 million -- and gained 0.37 per cent, as claims and counterclaims continue to circulate over its potential takeover.
 
Fellow financial firms, the Commercial International Bank and Citadel Capital were nudged up 0.91 and 1.18 per cent, respectively.
 
In the property sector, it was Palm Hills Development -- up 1.28 per cent -- and the Talaat Moustaf Group, which edged up 0.26 per cent, which prompted the gains.
 
Weighing on the index, however, were heavy losses for shares in mobile operator Mobinil, which have hemorrhaged value as the market readjusts after the firm's majority sell-off to France Telecom. Mobinil shares plunged 9.94 per cent by the close of play.
 
Orascom Construction Industries also piled on the pressure. Egypt's largest listed stock dipped 0.4 per cent in value, its high market capitalisation trimming the main index.
 
Egypt's benchmark index was among the world's best performers in the first quarter of 2012, hitting an eight-month high of 5,452 points in early March to take it up 51 per cent for the year. 
 
But it has lost nearly 1,000 points since, retreating as a 1 July deadline for the army to hand power to an elected president nears.
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