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Market Report: Egypt's bourse quickly rebounds after yesterday's glitch Growth in Orascom Telecom Holding augmented by Arab investors restores the market's 9-day-long upward trend
The Egyptian stock exchange rebounded today to resume its upward trend after a slight decline in yesterday's session. The market's EGX30 gained 1.18 per cent to close at 5,249 points, fuelled by the growth in major stocks; namely Orascom Telecom Holding (OTH). OTH gained 4.56 per cent on the back of exceptional growth in quarterly profits. The company announced a 1172 per cent increase in net earnings due to the sale of its shares in affiliates in Tunisia. Analysts also credit OTH's adept management for the hike in its stock price. “OTH's management was able to successfully navigate the company through several crises. Investors view the company as a solid & trustworthy entity,” says Marian Azmy, head analyst at HA Securities. The recent positive performance of the market, augmented by its quick recovery of yesterday's loss, has prompted many to believe that the troubled bourse might witness steady growth in the coming period. Azmy, however, contests such a premise: “Seven or eight sessions of growth are not enough to determine the outlook of the market in such conditions. “We are still at a declining level on the long and short term; the growth we are witnessing is merely a rebound of the extremely low levels the market reached 2 weeks ago,” stated analyst. Egyptians and Arabs were another catalyst in today's gains. Arabs were the main net buyers in the session and, along with Egyptians, they intiated 94 per cent of the session's total turnover which amounted to LE537 million – the average of post Mubarak trade volumes. Azmy believes that Egyptian traders willingly ignore all the negative indicators continuously being announced for both the Egyptian economy and many listed companies. “The market is being pushed upwards due to speculation which generates short term gains. Real long term growth can only be generated from fundamentals,” she concludes. In today's 4 hour session, 103 stocks closed in green while 65 declined. Ezz Steel was the highest gainer at 8.09 per cent, while Bisco Misr was the biggest loser at 7.06 per cent. After ousting Ahmed Ezz, former NDP official, from the company's management, Ezz Steel's price continues to soar, boosting the Basic Resources sector by 6.87 per cent,. The travel and tourism sector also gained significantly today at 3.01 per cent fuelled by growth in Egyptian for tourism Resorts.
