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Market Report: Egypt stocks up 1.8 per cent on telecoms surge and election news The main index finally sees green after six days of turmoil, spurred upwards by the prospects of a deal for Orascom Telecom and approximate dates for elections
Egyptian stocks broke their weeklong losing streak Monday as favourable telecoms news refreshed buyers' appetite for blue-chip firms and the announcement of rough dates for elections promised an end to months of political uncertainty. The EGX30 benchmark index climbed 1.79 per cent to 4,409 points by the end of the session, its first day in the green since 8 September, the eve of renewned protests in Cairo that saw the storming of the Israeli embassy and a revival of Egypt's reviled emergency law. "Trade volume is at a very acceptable level today and is a sign of improvement," said Issa Fathy, vice president of securities division in the stock exchange. "The news about Orascom Telecom's Algerian operations boosted trading and revived investor's appetite for buying." Reports circulated early in the day that Orascom Telecom's (OT) subsidiary Djezzy, currently involved in a long-running buy-out dispute with the Algerian government, had been valued at US$7 billion. The news prompted an uptick in trading of OT stock, which made up LE30.8 million of the day's LE285.7 million total tunover and saw trade temporarily suspended around 11pm when its value rose over 10 per cent. The telecom giant's stocks finally closed up 7.17 per cent, its performance encouraging the other firms in the sector: Telecom Egypt, up 1.38 per cent, and Mobinil, whose gains of 8.64 per cent were the day's second highest. Gains clustered around the high-cap firms favoured by a resurgent number of foreign investors, but they spread to much of the rest of the market, with the end trading board splashed in green. From 177 listed stocks, 139 finished up and 29 declined, pushing the broader EGX70 index up 1.37 per cent. Embattled metal producer Ezz Steel saw the day's second highest trade, losing a further 3.7 per cent as the firm continued to feel the impact of court rulings against its former head. Last Thursday Ahmed Ezz was sentenced to a 10-year prison sentence and ordered to pay a fine of around $11 million after being found guilty of graft charges -- moves that prompted fears among investors and a plummet in stock value. But Fathy said market forces were certain to reassert themselves as low prices began to reattract investors. "Ezz is valued at around LE8.85 and now its trading at LE6.77 -- we will see it leading the market very soon," he said. Other blue-chip firms were already feeling after the benefit after days of shedding value.Common shares in Citadel Capital gained 2.89 per cent, the Commerical International Bank -- a key sign of foreign interest -- added 1.17 per cent, and Orascom Construction, the Bourse's largest listed firm, edged 1.29 per cent. Non-Arab foreigners reversed their weeklong position, becoming net-buyers to the marginal sum of LE4.9 million. Egyptians did the same, while other Arabs were the day's sole net-sellers. Fathy believes that today's session might signal a market rebound, especially given encouraging news about Egypt's much-vaunted parliamentary elections. Earlier in the day, the recently formed Supreme Elections Commission presented interim prime minister Essam Sharaf with proposed dates for three-stage elections to begin in late November. Going by the proposal, final results for the elections would be announced in the first two weeks of January 2012. "With elections dates announced we now have a road plan for the future of Egypt. Augmented by very attractive [low] stock prices, we might see the market step up once more," said Fathy. "All our problems are political, so if they are solved the market will immediately respond."
