Market Report: Egyptian stocks beat the retreat on overseas trade

Worldwide downturn in trade and Friday worries hit the EGX30 bringing a second consecutive day of mild losses

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Egypt's stock benchmark rolled back its early-week gains in a second day of losses, slipping 0.82 per cent to finish at 5,290 points as foreign investors moved to offload shares.
The EGX30 surged 3 per cent on Sunday following news of US and Saudi economic aid packages to Egypt but it has retreated two-thirds since.
“Foreigners' net sales of LE72 million were the main reason for the drop today,” says Ashraf Abdel Aziz, head of equity trading at Arabiya Online Securities, who thinks their move proves the interconnectedness of world markets. “Their trading performance is related to the US and European activity – when it declines [as it is doing now] they sell in the Egyptian market.”
Foreigners had a 27 per cent market share while Egyptians accounted for 68 per cent of trade and were net-buyers of LE75.47 million. Of 185 listed stocks, 133 lost value while 41 gained in equity trades worth a total of LE526.47 million. A mixed picture showed four sectors finishing in the green and eight in the red.
Basic resources and construction and materials finished marginally up, while biggest loser was telecommunications, whose 3.55 per cent overall fall was prompted by big-cap losses of 3.6 per cent for Orascom Holding and 6.77 per cent for Telecom Egypt.
“Dividend payments of Egypt Telecom were completed yesterday and the share is following the southern direction of the market,” says Abdel Aziz.
Leading the charge south was El-Watany Bank, which lost almost 10 per cent following news it was reshuffling its assets in the hospitality industry. “Its shares have a weak trading volume so any transaction, whether buy or sell tends to affect it hugely,” says Abdel Aziz.
Real estate continued to pare its recent gains to finish around 1 per cent down, despite the prospect of a new government committee resolving the long-running land disputes that have stalked the Talaat Moustafa Group and Palm Hills Development.
“The coming Friday's protests in Tahrir Square are likely to delay the rules of reconciliation, especially with investors who were involved in seizure of state lands,” says Abdel Aziz.
Palm Hills managed to buck the downward trend and gain a marginal 1.92 per cent thanks to "a historically low price unlike [rivals] SODIC and TMG".
The prospect of further upheaval is worrying other non-Egyptian investors too, he believes, as Arab participation dipped to just over 4 per cent, around half Monday's figure.
“Arabs still worry about political tensions in Egypt so, their participation is not stable now,” says Abdel Aziz.