Market Report: Egypt stocks soar as Morsi takes office

Ahram Online, Monday 2 Jul 2012

Heavyweight stocks see sharp gains and turnover triples in the first trading session since the country's new president took office

Stock exhange
Egypt stocks soar to a month high (Photo: Reuters)

Egyptian stocks rocketed to a five-week high on Monday in the first trading session since the country's first freely-elected president took office.

The benchmark EGX30 climbed 4.97 per cent to close at 4,942.4 points – its highest level since 24 May – marking the exchange's sixth consecutive day of gains.

"It is optimism over the election and about how smoothly the process went over the last few days," Mohamed Kotb of Naeem Brokerage told Reuters.

"Investors see a president has been elected and are anticipating a new government that finally will deal with the country's problems, putting the economy as a priority."

Total turnover was around three times the recent average, hitting LE752 million ($124.2 million).

From the day's 180 listed stocks, 158 gained in value and 16 declined, a result reflected in the broader EGX70, which increased 3.2 per cent.

Heavyweight shares performed strongest, many of them zipping well over the 5 per cent level which forces a 30-minute freeze on trade.

Commercial International Bank and Orascom Construction Industries gained 7.1 per cent and 4.1 per cent, respectively.

Orascom Telecom Media and Technology benefited from news of dividend payments to see the day's highest turnover – some LE179.2m – and a climb of 4 per cent.

Property stocks did well too, the Talaat Mostafa Group and Palm Hills rising 8.2 per cent and 7.23 per cent, respectively.

Eissa Fathy, head of the securities division at Cairo's Chamber of Commerce, had a different take on the day's activity.

Speaking to Ahram Online, he dubbed the latest upturn in trade "artificial" and "political money" by local investors who are trying to propagate the idea of market stability.

"If you want to see the real trading value, simply look to amount of foreign-sold stocks. This has reached around LE3 billion since February," Fathy said.

Egyptians were the only net-buyers on Monday, scooping up LE92.8 million. Foreign and Arab investors were net-sellers to the tune of LE77.1 million and LE15.7 million, respectively.

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