Market Report: Egypt's Friday fears turn to Ramadan hopes

Stock benchmark edges up for the first time in a week on the back of mainly trouble-free protests and the hopes the holy month and Mubarak's upcoming trial will ease tensions

Egyptian stocks made a cautious revival Sunday as the weekend's tense demonstrations passed off peacefully and Arab investors eyed the prospects of calm offered by the start of Ramadan and the former president's upcoming trial.
After last week's four consecutive days of losses, the benchmark EGX30 edged up 0.27 per cent to 5,035 points led by solid gains in the basic resources and construction sectors.
"Friday's demonstrations ended peacefully and without any of the violence some had predicted," said Issa Fathy, vice president of the securities division at Cairo's Chamber of Commerce. "These days that's an encouraging enough sign for some investors."
Friday saw tens of thousands of protesters descend on Cairo's Tahrir Square calling for an Islamic state, an aim in stark opposition to the mainly secular groups already staging a sit-in on the capital's main intersection.
Apart from minor overall losses for the telecoms, banks and household products sectors, the bulk of the market made modest gains
From 178 listed stocks, 119 gained and 50 declined, with interest in lower-cap shares helping push the broader EGX70 up 1.42 per cent.
Market turnover made a slight advance to LE339.29 million after last week's dip, but remained significantly below it's post-uprising average. Trade in investment bank Pioneers Holding accounted for a fifth of the total.
Gains were capped as foreigners put pressure on the market, selling off heavy-duty stock in firms like Orascom Development Holding, which lost 2.96 per cent, and Oracom Construction (OCI), which gained 0.99 per cent respectively.
Sell-offs came despite Friday's news that the World Bank's private-sector lending arm is making a $50 million equity investment in OCI.
"Foreign investors are affected by the political fluctuations, those often counter the favourable news," said Fathy, adding their limited participation was behind what he called the market's "lack of liquidity".
Occasional bursts of relief fail to reverse general fears about the state of the market and economy, he said.
Reflecting this speculative atmosphere, individuals dominated the market with an 80.2 per cent share, their activity spurring climbs of over 8 per cent for Delta Insurance, Delta Construction and Cairo Development and Investment.
The Egyptian operations of French banking group Credit Agricole shrugged off a 30 per cent drop in first half profits to finish up 1.54 per cent.
While foreigners and Egyptians were net-sellers on Sunday, it was Arabs that balanced the market, buying a net total of LE15.754 million in stocks.
"Egypt might enjoy more stability as Ramadan starts and political movements come together and show more patience," said Fathy, pointing to today's announcement that the three-week sit-in on Tahrir Square has drawn to a close.
With the start of the holy month, stock trading sessions will be reduced to three hours, often putting the brakes on trade. But Fathy believes a new, if short-lived, period of stability might act as a counter-balance and help the market revive.
The start of the trial of ousted president Hosni Mubarak, due to begin Wednesday 3 March, could give the market added confidence.
"All of these factors depend on the political campaigners," says Fathy. "Egypt may yet make a surprise for us."