Egypt's stocks end the week in red on correction

Ahram Online, Thursday 3 Apr 2014

Egypt's main index suffers 9.5 percent drop in just over a week, following nine months of significant gains

The Egyptian stock market (Photo: Reuters )

Egypt’s stocks ended the week's trading in red, part of what an analyst says is a correction process after nearly a year of significant gains in the main index.

The streak of gains caused for securities' prices to be overvalued, says Ahraf Abdel-Aziz, head of institutional sales at Arabeya Online securities.

In the past nine months, Egypt's benchmark index EGX30 has risen almost 80 percent to record a new peak of 8,501 points on 25 March. The recent decline represents a 9.5 percent drop in just over a week.

The EGX30 closed with a 2.89 percent drop on Thursday to register 7,701 points.

"The market’s considerable rise in the past nine months was never really corrected," said Abdel-Aziz. "The magnitude of this week’s decline matched this rise and is expected."

The market's positive performance attracted more investors throughout those months, he added.

The market has made significant losses following last week's announcement by former army chief Abdel-Fattah El-Sisi that he would run for president.

Listed stock turnover amounted to LE1.2 billion in Thursday's session.

Egyptian investors were net sellers to the tune of LE0.5 million, while foreigners, Arabs and others were net buyers.

All of the EGX30's listed shares were in the red.

Market bellwether Commercial International Bank (CIB) fell 2.24 percent to LE36.7 per share.

Telecom Egypt's (TE) shares were the biggest EGX30 decliner in the session, plunging 8.31 percent to LE15.95 per share.

In the telecom sector, Orascom Telecom Media and Technology (OTMT) was also down, dropping 7.44 percent to LE1.14 per share, while Global Telecom Holding inched down 1.35 percent to LE4.45 per share.

The real estate sector saw shares in Palm Hills and TMG Holding fall by 5.59 percent to LE3.63 per share and 1.75 percent to LE7.87 per share, respectively.

The broader index EGX70 fell 2.47 percent.

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