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Market Report: Bargain-hunting and Tantawi speech push Egypt stocks up 1.7 per cent Bourse bounces back for a second consecutive day, ending a turbulent week with 150 stocks in the green
Egypt's stocks closed Thursday in the green for the second consecutive session, having shed almost 12 per cent in the first three days of this week following deadly clashes in Cairo's Tahrir Square and other parts of the country. The exchange's main benchmark, the EGX30, gained 1.69 per cent to close at 3,780 points. The broader EGX70 also finished up 2.48 per cent. "The market's surge was possibly due to either bargain hunting as prices are very low or the speech delivered by [military council leader] Field Marshal Tantawi on Tuesday night,” says Mostafa Badra, a capital market expert. On Tuesday, Tantawi, Egypt's de facto ruler, announced an accelerated transitional plan which would see presidential elections held in June 2012. His speech, while appealing to many Egyptians, failed to clear Egypt's iconic Tahrir square of protesters or stop the violence between disgruntled demonstrators and security forces. The two major stocks that carried the market upwards were Commercial International Bank (CIB) and Orascom Telecom (OT), making up around 30 per cent of the day's volume at LE45 million and LE30 million, respectively. OT gained a whopping 6.05 per cent to close at LE2.98 per share as the company's share split into two approaches. OCI climbed a comparatively meagre 0.11 per cent, “Due to the weakening Egyptian pound and the growing uncertainty in Egypt's future, many are transferring their money abroad through Global Depository Receipts (GDR) in CIB,” says Badra. He explained that instead of directly transferring money abroad, investors buy stocks in CIB, which converts them into GDRs which can then be sold in an overseas market. The Egyptian pound has been trading this week at its lowest levels since January 2005, sinking 3.2 per cent to fall to LE6 to the dollar. High buying pressures on CIB caused the market's second biggest share to gain 3.92 per cent and close at LE21.46 per share. Total turnover on Thursday reached LE251 million, with 150 stocks gaining and 22 finishing in red.
