Egypt's bourse continued its weeklong rally Thursday, driven by optimistic expectations on the Egyptian economy.
The main EGX30 benchmark edged up 0.85 per cent to close at 5,164 points. Turnover reached LE458 million ($76.3 million), a level higher than that seen last month.
Today's positive performance is exceptional, as usually sessions before vacations witness slow trading. The bourse is scheduled to close until Tuesday on occasion of the Islamic feast of Eid Al-Fitr. The market will reopen Wednesday..
“Recent developments on the political scene are definitely behind the positive turn in the market,” Walaa Hazem, asset manager at HC Securities, told Ahram Online. “Investors see political stability as a prerequisite for economic improvement, and they have become more optimistic,” Hazem added.
President Mohamed Morsi changed the military's top leadership and issued a new constitutional declaration Sunday, in a move seen by many as removing the army from the political scene and consolidating the president’s power.
“Investors see that the conflict between the ruling circles has ended,” Hazem explains.
Egyptian investors, mostly individuals, made up 72 per cent of total the day’s trade and were net sellers at LE15.5 million. Arab and non-Arab foreign investors were net buyers, making up 9.3 and 18 per cent of trade respectively.
Investment house EFG-Hermes was the most active share in today’s session, marking LE75 million in turnover and gaining 3.18 per cent to close at LE11.36 per share.
This gain in share price comes despite the bank’s reported drop in second quarter net profits by 66 per cent to LE27 million. The drop, however, was mainly driven by the general downturn in stocks markets in the region, causing a significant drop in EFG-Hermes’ revenues from its capital markets and treasury operations.
The current improvement in the stock market and the investment climate in general means that EFG could see better results in the rest of the year.
Orascom Telecom and Media Technology (OTMT), was the second most active share Thursday, gained an impressive 1.79 per cent to close at LE0.57 per share.
“It seems that there are some expectations that OTMT will engage in some large investment soon, but it is just speculation,” Hazem said.
After selling the majority of its share in mobile operator Mobinil, OTMT is left — in the mobile portfolio — with just its North Korea mobile venture.
Commercial International Bank (CIB), the largest listed bank in Egypt, saw LE54 million in traded volume, gaining 0.31 per cent.
Among other active shares today were Ezz Steel, Orascom Construction Industries and Palm Hills Development, which gained 4.57, 0.56 and 2.38 per cent respectively.