Stocks register mild gains as calmer streets, Brotherhood arrests quell investor fears

Ahram Online, Wednesday 21 Aug 2013

EGX30 gains 0.05 percent and EGX70 up 1.41 percent on Wednesday as arrests of Islamist figures charged with inciting violence leading to increased confidence of domestic investors, who expect a lull in street violence

Egypt’s stock market (Photo: Reuters)

EGX30, Egypt’s main index continued its mild ascent on Wednesday, gaining 0.05 percent to sit at 5,389 points.

Though total turnover was low, registering a mere LE221.7 million, it was boosted by buying from Egyptian and Arab investors, who together made up over 82 percent of the market.

“This optimism on behalf of Egyptian investors is growing with the arrests of Muslim Brotherhood leaders day by day, which leads them to expect less violence” Osama Mourad, an independent analyst and former chief executive of Arab Finance Brokerage, told Ahram Online.

The country has been in turmoil since security forces moved to break up two sit-ins held by supporters of deposed president Mohamed Morsi, who hails from the Muslim Brotherhood, last Wednesday.

The ensuing violence, which led the interim president to declare a month-long state of emergency and a curfew in many parts of the country, caused Egypt’s benchmark index to plunge nearly 4 percent on Sunday.

But calmer streets, and a series of arrests by Egyptian authorities, including that of the Supreme Guide of the MB, Mohamed Badie in the early hours on Tuesday and of pro-Brotherhood Islamist preacher Safwat Hegazi on Wednesday morning, have quelled Egyptian fears, says Mourad.

The Islamist leaders are, along with others, charged with inciting violence against opponents of the former Islamist president.

The crackdown has been condemned by the United States and the European Union, which have both been debating how to economically pressure Egypt, notably by withdrawing aid.

Foreign investors remained net sellers, to the tune of LE44.7 million.

There were 79 gainers and 44 decliners out of 156 listed stocks on Wednesday, though most of the EGX 30 main index stocks were in the red.

While Commercial International Bank inched up by 0.25 percent, Six of October Development & Investment (SODIC) gained 0.22 percent.

Otherwise, prominent shares declined, with Egyptian Financial Group-Hermes Holding Company falling 0.35 percent, while property shares of TMG Holding and Palm Hills Development Company lost 0.40 percent and 0.83 percent, respectively.

The broader EGX 70 index gained a more significant 1.41 percent on Wednesday. 

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