Egypt bourse up despite clashes as cabinet takes shape

Ahram Online, Tuesday 16 Jul 2013

'This kind of unrest expected by investors in coming period,' independent analyst Osama Mourad says regarding persistent Egyptian investor confidence following Morsi ouster

 Egypt bourse
File photo, an Egyptian broker gestures during a session at the Egyptian stock market in Cairo, Egypt (Photo: AP)

Egypt's main index went up 0.85 percent on Tuesday as Egypt's cabinet showed signs to taking shape despite ongoing street unrest.

Egyptian investors drove 111 stocks up on Tuesday as it was confirmed that Osama Saleh, who had served as investment minister under deposed president Mohamed Morsi, would return to his old post in the country's transitional government.

Saleh will join a cabinet headed by liberal economist Hazem El-Beblawi and which is due to include experienced officials such as former tourism minister Mounir Fakhry Abdel Nour, former Egyptian financial regulator head Ziad Bahaa El-Din, and reputed academics such as World Bank veteran economist Ahmed Galal.

"Investors, particularly retail, are reacting positively the fact that El-Beblawi is pressing forward and successfully forming the cabinet, which is expected to be complete in the next 48 hours and promises to be the best Egypt has seen since the January 2011 revolution," Osama Mourad, an independent analyst and former chief executive of Arab Finance Brokerage, told Ahram Online.

"Institutional investors need more assurance and need to see how the government will deal with the private sector, and how it will handle calls for social justice, among other issues" added Mourad.

Egyptian investors were the net buyers at the close of the session, which registered LE439 million in turnover, while Arab investors were net sellers. Non-Arab foreign investors, who account for 27 percent of the market, were once again net sellers after making a brief comeback as net buyers over the past days.

Blue chip stocks Commercial International Bank and Orascom Construction Industries were in the red, dropping by 0.32 percent and 0.30 respectively.

However, leading investment bank Egyptian Financial Group-Hermes Holding Company was up 1.85 percent, and Orascom Telecom 2.1 percent.

The real estate sector was booming, with Six of October Development & Investment (SODIC) rising 3.66 percent, Palm Hills Development Company 3.36 percent and TMG Holding 2.58 percent.  

The market's positive performance, according to Mourad, reflects the resiliency of Egyptian investors' optimism regarding the direction of the country, despite clashes between supporters of deposed president Mohamed Morsi and security forces in Cairo on Monday night, which left 7 killed and over 260 wounded.

"This kind of unrest is expected by investors in the coming period" explained Mourad, who added that such incidents would not shake investor confidence unless they hampered progress within the transitional roadmap laid out by the country's armed forces after mass protests led it to oust Egypt's first elected president.

The broader EGX 70 index was up 0.94 percent.

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