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Market Report: Egypt stocks rebound on foreign activity and new trading measures Bourse almost clears Sunday's losses as market forces reassert themselves and large-cap firms make bullish profit predictions
Egyptian stocks rebounded on Monday, encouraged by a resurgence in foreign trade and proposals for new Bourse trading measures, to finish 1.14 per cent up at 4,934 points. On Sunday, the benchmark EGX30 dropped 1.19 per cent to reach its lowest level in two years as sectarian violence in Cairo spooked sensitive investors. But market forces today reasserted themselves despite ongoing political uncertainty. "The clashes really affected the market, but buying pressure was building towards the end of yesterday," said Omar Darwish, equity trader at CI Capital Holding. "We thought the market would open well and it was boosted by the high participation of foreigners who were the only net-buyers." Of 179 listed stocks, 151 gained and 18 declined in shares trade worth some LE435.2 million, up from Sunday's LE294m. All sectors but five showed overall gains, with basic resources the major climber, gaining 3.54 per cent. The exceptions - retail, media, oil, utilities and technology - remained stable. Foreigners, returning to business after the weekend, accounted for an unusually high level of trade - 42.6 per cent - and net-buys of LE27.6m. Without them it is "unlikely" the Bourse would have rebounded, said Darwish. Announcements from the Bourse also spurred trade. Chairman Mohamed Abdel Salam told press in Dubai on Sunday that the stock exchange will introduce "same-day" short selling and lift a restriction on intraday trading later this month. Abdel Salam also indicated that exchange-trade funds (ETFs), on the cards before Egypt's revolution, may also be introduced. ETFs are designed to mirror the performance of stock indexes, allowing investors to trade in shares of entire portfolios in a single security. "These moves would make it easier for international investors to be involved in the market, so they encouraged trade," said Darwish. A smattering of favourable news for individual companies also prompted gains. Stocks in Juhayna Food Industries, Egypt's biggest publicly-traded producer of packaged milk, rose 2.64 per cent on a company announcement that first quarter profits for 2011 will be better than last year's. Heavyweight Orascom Construction Industries also edged up 0.39 per cent in anticipation of high first quarter earnings due this week.
