Market Report: Egyptian stocks fizzle as selling pressure builds

Shares follow yesterday's three-month high with a mild decline, but high turnover leaves analysts optimistic

Egyptian stocks took a mild dip Monday as growing selling pressure led investors to take advantage of recent gains, prompting the EGX30 benchmark to slip 0.84 per cent to 5,581 points.
But high equities turnover of LE666.6 million led analysts to believe the fall, which came after the market reached its highest level in three months on Sunday, was only temporary.
"The market hit a point where investors started taking profits, but the level of actual trade shows confidence is still high," says Issa Fathy, vice president of the securities division at the Chamber of Commerce. "The market may rebound as soon as tomorrow."
Travel and leisure was the only sector to finish in the green, up just 0.52 per cent, with price fluctuations for individual stocks similarly muted.
From the 183 listed shares, 36 gained and 140 declined, with the list of top gainers and losers dominated by lower-cap firms -- the National Development Bank, up 4.05 per cent, and Transocean Tours, down 4.76 per cent.
Non-Arab foreigners led the charge from the market, net-selling a total of LE34.56 million in shares.
"They are conflicted," says Fathy. "Foreign activity with Egyptian stocks often reflects what they feel about other markets. If they're facing troubles abroad then they are inclined to sell."
Egyptian spirits remained high as they closed the day net-buyers of LE48.86 million of mainly lower-cap shares.
Recent business announcements had little effect on the day's transactions, as the lifting of a travel ban placed on the chairman of Citadel Capital failed to stop shares in the troubled private equity firm shedding a further 3.16 per cent.
Citadel stock tumbled 10 per cent when the ban was announced in April.
Shares in real estate firm the Amer Group shrugged off reports of a looming legal battle to add a further 1.28 per cent to Sunday's surprising gains of 8 per cent.
The Egyptian Center for Economic and Social Rights this weekend filed a law suit contesting the allocation of 2.8 million square metres in Fayoum governorate to the Amer Group for building a luxury resort.