Market Report: Mubarak trial boosts Egypt stock confidence

Egyptian investors return to the Bourse with newfound optimism on Thursday after the opening session of the former president's trial goes ahead

Egypt's Bourse staged a partial recovery Thursday in the aftermath of the ousted president's first court hearing, with the EGX30 benchmark gaining 1.71 per cent to reach 5,007 points at the end of a calm trading session.
"The market started to rebound towards the end of yesterday's session after Mubarak's trial went smoothly and we saw no large-scale clashes or unrest on the streets," says Ashraf Abdel Aziz, head of institutions sales at Arabia Online Securities.
Yesterday's televised trial of Egypt's 30-year ruler grabbed the attention of the nation. Many traders worried protests and clashes might return to the streets if the former head of state failed to make his scheduled court appearance.
Market turnover climbed to LE358 million in today's three-hour session having plunged to what state news agency MENA called a 10-year low on Wednesday.
But Abdel Aziz did not expect the commencement of Mubarak's trial to spell an end to the Bourse's strife.
"Even after the trial, we cannot say that investors have regained their trust in the Egyptian market. Our political reality is still the same," he said.
Echoing the general consensus of stock market analysts which whom Ahram Online has talked over the last three months, Abdel Aziz said a full recovery of market activity would only occur after proper political transformation takes place. Parliamentary elections are scheduled in November with presidential elections to follow in 2012.
From Thursday's 177 traded stocks, 126 saw gains while 41 finished in the red.
All sectors finished up or stayed the same, with real estate seeing the largest gains of 3.07 per cent, mainly driven by climbs for the Talaat Mostafa Group and Palm Hills Development of 3.82 and 2.96 per cent respectively.
The broader EGX70 index showed less growth, finishing up 1.15 per cent.
"The higher growth in the EGX30 came from a few large deals in certain stocks, namely Pioneers, EFG Hermes and Egypt Telecom," Abdel Aziz said.
Around a quarter of the day's turnover was taken up in trade of those three shares.
Lecico Egypt stock climbed 2.08 per cent as a workers strike in one of its bigger manufacturing compounds in Alexandria ended.
Foreigners accounted for around 28 per cent of trading volume but were net-sellers of LE12.2 million. Egyptians were net-buyers and made up 68 per cent of total trades.
"Egyptians' optimism seems to have been able to absorb foreigners selling, driving the market upwards," says Abdel Aziz.