Market Report: Global woes put quick end to Egypt gains

Egyptian stocks are back in the red as investors eye turmoil in European and US markets, their sell-offs slashing the main index a further 1.5 per cent

Reprieves for Egyptian stocks proved to be short-lived on Thursday, as net-selling of high-caps hobbled the market for the fourth and final time this week, the benchmark EGX30 sliding a further 1.49 per cent to 4,592 points.
The Bourse's main index saw a 4.1 per cent upswing on Wednesday, having fallen to its lowest level in 28 months over the previous three days in response to global economic turmoil.
"We have a saying, no stock can beat a bad market and that's what we are seeing here," said Issa Fathy, vice president of the securities division at Cairo's Chamber of Commerce.
"The Egyptian market is following markets around the world, although the correlation is more due to psychological factors -- it's not objective."
Major European and US markets all saw trouble on Wednesday.
The British FTSE fell 2.6 per cent, Germany's index was down 3.4 per cent and France's CAC-40 lost 4.1 per sent, the latter on unfounded rumours Standard & Poor's was planning a cut of the country's credit rating. Across the Atlantic, the Dow Jones industrial average was down 3.4 percent.
Losses spun on into Thursday, prompting further gloomy sentiment. Every single market in the Middle East and North Africa region -- barring Saudi Arabia, closed for the weekend -- also finished marginally down on the final trading day of the week.
Egypt's exchange saw a total LE432 million of trade, around 30 per cent of it by non-Arab investors who net-sold LE4.97m of mainly high-cap stock. Egyptians, who represented two-thirds of trade, were net-buyers of LE25.15m.
High-cap firms like Commercial International Bank (CIB), which slid 0.4 per cent, and El Saeed Contracting, down 0.2 per cent, saw some of the highest activity, as foreign investors moved to make quick profits from Wednesday's gains.
Orascom Telecom, a global communications firm and a major Egyptian player, saw investors overlook its mainly-encouraging second quarter balance sheet, choosing to dump stock and pulling its shares down 2.72 per cent.
"The environment of the market doesn't allow investors to buy this stock, people need stability before they will do that," said Fathy.
From the market's 179 listed stock, 150 declined and just 24 saw gains. Among the latter were smaller-caps like Egyptian Chemical Industries and Ismailia Development and Real Estate, both of up around 9.9 per cent.
"They are exceptions, speculative stocks," says Fathy. "Their total value is low and it's not as if they gain 10 per cent every day."
Underlining his point, the broader EGX70, which includes smaller-cap firms, did worse than the main index, shedding 1.56 per cent.