Egypt's main stock index swung back into the green Wednesday following reports of the detention of former president Hosni Mubarak and his two sons Alaa and Gamal.
Egypt’s main index EGX30 rose by 1.9 per cent today after four consecutive sessions of decline. The market has lost 25.77 per cent of its value since the start of the year amid political unrest.
“As expected, investors gained confidence and defined the global trend. The session opened and ended in the blue. The detention of the ex-president and his sons reflected positively on investor sentiment,” says Omar Darwish, equity sales trader at CI Capital Holding Co.
“One of the factors that influenced the market is that justice was implemented. Justice has become number one in Egypt and investors feel that in case of any problem, justice will rule, not nepotism or corruption,” says Mostafa Badra, CEO of EAC Holding, adding the most important thing for investors is to be sure they will have full rights in any situation.
A total of 13 listed companies climbed sharply, exceeding the 5 per cent limit variation set up Egypt's financial authority and temporarily suspending trade on their stock for half an hour.
“Commercial International Bank shares have been falling for seven consecutive sessions; today's rally was coupled by higher volumes than of late,” says Darwish.
Most sectors ended in the green. The most heavily traded sectors were banking, financial services and construction and materials.
South Cairo & Giza Mills & Bakeries, Union National Bank - Egypt and Arab Dairy Products were the main gainers. The main losers were also in the banking sector, with Faisal Islamic Bank of Egypt finishing down 9.16 per cent.
Political events were not the only driver fuelling the rise of the stock market, with investors attracted by low prices.
Egyptians were net-buyers, recording a net flow of LE99.1million. Arab were net-buyers and foreigners net-sellers.
Institutions made up 57 per cent of Wednesday trade which saw total turnover of LE563.2 million. The broader EGX70 index climbed 3.45 per cent.