Stability, bin Laden's death drive Egypt's market up nearly 1 per cent

Egypt's Monday session scores biggest gains in two weeks, mimicking most of the world's stock exchanges, especially after the news of bin Laden's death

The EGX30, Egypt's stock benchmark, has closed up 0.97 per cent, continuing its upward trend since Wednesday in what analysts described as a result of the relative stable political status since the beginning of the January 25 Revolution.
The broader EGX70 edged 2.79 per cent and the EGX100 2.01 per cent. Of 178 listed stocks, 138 showed gains and 33 declined.
"I think the upward trend is due to the relatively stable political status for the country, or let me put it more accurately, due to the ‘discontinuation' of bad news about Egypt" says Ashraf Abdul Aziz, financial analyst with Al Naeem Brokerage.
The stock market had closed since 30 January after unprecedented public protests that ultimately led to former president Hosni Mubarak's resignation. The bourse resumed on 23 March.
The demonstrations caused a 16 per cent drop in the stock market, a loss of around LE70 billion (US$12bn) in the last two sessions before closure.
"Investors who are gaining trust in the market more and more everyday are no longer sticking to the sidelines," Abdul Aziz adds.
Egyptian traders made up 64.2 per cent of the market and were net-buyers, while foreigners made up to 31.9 per cent of the market with sellers outnumbering buyers and net spending as high as LE18.3 million.
"Markets across the globe received a bit of a boost as news of bin Laden's death broke, and this was, of course, mirrored in the Egyptian market, reflected in the foreigners' high market activity," says Abdul Aziz.
As Europe woke to the news of Osama bin Laden's death, markets such as the FTSEurofirst 300 index spiked. Top European shares in the index were up 0.4 per cent at 1,161.19 points at 7.23am.
All sectors ended in green, with only basic resources suffering losses.
EFG-Hermes was among top gainers, edging 5.8 per cent after two of its subsidiaries wereamong top ten brokerage companies in April, according to the monthly bulletin of Egypt Stock Market. EFG Brokerage and Hermes Brokeragecame in thefirst and the sixth place respectively, witha total of 10.9 per cent and 5.4of the market transactions.
The bank sector led the taking over more than 17 per cent of the market, despite news reports accusing HSBC Egypt (a non-listed bank) of playing a vital role in Mubarak-era deals now mired in criminal investigations.
A research by the Bureau of Investigative Journalism, a not-for-profit body based in London's City University, concluded that HSBC was the most active European investment bank in Egypt and raised more than £450 million (LE4.47 billion) for two of the country's largest and most controversial real estate developers. Both Talaat Moustafa Group (TMG) and Palm Hills Development are now mired in corruption trials and have seen their stock values plummet.
Some have expected the bank sector to panic in fear that other banks listed in the bourse might be involved in similar cases.
"I don't think the bank sector is likely to be affected by such news, unless copycat cases emerge over the next months," he adds. "Banks are usually affected, rather, when defaults on loans are revealed."