Stock market starts the year on a red note

Marwa Hussein, Sunday 2 Jan 2011

The New Year holidays ensures the stock market starts the year on a slight decline

After breaking through the 7,100-point resistance level to a 7-month high on at the end of 2010, EGX 30 ended the first day of the year on the red falling slightly by 0.84 per cent.

“It’s an insignificant decline. The investors made good money in the last year, especially in the last few months, it is normal to empty out,” says Omar Darwish, equity sales trader at CI capital.

“It is very normal that the activity is low in the first day of the year, the funds didn’t announce yet their strategies, plus it is a Sunday,” added another broker on condition of anonymity.

The real estate and financial sectors mainly pulled the market down. The real estate sector recorded a decline of 20.68 per cent, the banking sector declined by more than 13 per cent while the financial services excluding banks declined by 9.15 per cent.

Foreign investor’s presence was weak because of the New Year’s holiday; their trading share shrank to 6.59 per cent, from an average of 20 per cent. They were buyers.

National dominated the market with 81 per cent and were net buyers. Arabs were the only net sellers.

Individual traders dominated the market with 83.86 per cent and were net sellers versus 16.13 for institutions who were net buyers.

Tracking stock movement, National Cement was the top upward move, soaring by 15.75 per cent to L.E24.77. It was followed by Ceramic & Porcelain which surged 8.82 per cent, reaching LE5.18.

At the other end of the scale, another cement company, Misr Beni Suef, was the biggest drag on the overall index by plunging 5.08 per cent to LE 68.70. It was followed by two banks; National Societe Generale Bank (NSGB) and Commercial International Bank (Egypt), which dropped by 3.86 per cent and 2.13 per cent respectively.

Six of the seventeen sectors traded in the market were turned on a green note today, whilesix remained unchanged and five went down.

Counter to EGX 30's trend, the EGX 70 for small and medium business closed on a green note, increasing by 2.74 per cent, to reach 741.31 points.

“The small stocks, important for retailers went up by 8 and event 10 per cent in some cases, which shows that they have faith on the market," said Darwish.

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