Market Report: Egypt stocks see slight rebound on stability

EGX30 stock benchmark gains 0.33 per cent in mid-week session as analysts predict real estate will gather momentum for an imminent rebound

The EGX30, Egypt's stock benchmark stock, climbed 0.33 per cent to 5,393.4 points in Tuesday trade after two days of decline, prompted by stability.
Total market turnover was LE 590.32 million. Egyptians were responsible for the overwhelming majority – 81.2 per cent -- of equities trade.
“I expect that trading volume will remain at the LE500 to 800 million level for the coming month until the political situation in Egypt stabilises,” Nael Sedqy, senior equity trader with Naem Holding told Ahram Online.
Egypt's merchandise trade deficit narrowed year-on-year in March by 3.9 per cent, according to data released by the Central Agency for Public Mobilization And Statistics (CAPMAS) on Tuesday.
From 188 listed shares, 126 gained and 50 declined, with all sectors finishing in the green except healthcare and pharmaceuticals, and personal and household products.
Despite news that a lawsuit against a real estate heavyweight will be dropped, the overall sector saw little gain, edging up just 0.46 per cent.
Palm Hills Development, the sector's largest firm declined 0.4 per cent.
Hamdi El-Fakharani, a leading Egyptian lawyer who has been struggling for two years to overturn state land sales to Palm Hills Developments (PHD) said Monday he intends to withdraw a lawsuit accusing PHD of illegally acquiring land.
Mubarak's government sold PHD 960,000 square metres of land by direct order. The State Council's Administrative Court called for the annulment of land sales to the PHD project in New Cairo.
Fakharani also filed a case against Saudi Arabia's Kingdom Agricultural Development's land acquisition. Both cases allegedly violate the law regulating tenders and auctions.
"The news [dropping the claims] should definitely have a positive impact on the market," Sedqy said. "The problem is that timing was not right. It is the end of the fiscal year, and Egyptian institutions are adjusting their positions, changing equity ownership structure”
Institutions had moderate activity in Tuesday's session, comprising around 58 per cent of the market. They were net-sellers of LE 33.4 million of equities as opposed to individuals, who were net-buyers.
Sedqy expects the real estate sector to react to the good news by next week.
“The real estate sector has a lot of potential, it contributes significantly to the national output, and it employs a lot of workers. The government will eventually support it,” he said.
Sedqy expects a rebound in share prices in the next seven days. “Real estate companies are priced at a much lower levels than their real value, making them an attractive and lucrative for investors,” he said.
Foreigner investors had a very weak presence. They were net-sellers making up 16 per cent of the market and offloading LE24.7 million of stocks, while Egyptians were net-buyers of LE23.8 million.
"Foreigners are still concerned over the political situation in Egypt and waiting for it to regain stability" said Sedqi. “Only then will investment, especially foreign capital, regain trust in the solidity of the market.”