Market Report: Egypt stocks dip 0.7 pct on telecoms shake-up

Mobinil's takeover and subsequent rumours provide fuel for another wave of profit-taking on the last trading day of the week

Egypt's major stocks took another dip Thursday as telecoms deals prompted a third wave of defensive profit-taking, trimming the benchmark index's substantial recent gains.
The EGX30 slipped 0.73 per cent to close out the week at 4,967.15 points. It was the third consecutive fall for the main index which nonetheless sits 37 per cent higher than at the beginning of 2012.
"This session was a continuation of the market corrections we've seen in the last few days," said Tarek Kafrawy, a trader at CIBC Brokerage Company.
"Investors have heard rumours about some key deals and are selling their stakes while the sentiment is good and prices are high."
Around a half of the day's LE683 million turnover was clustered in trades for high-cap, mainlt telecoms, stock.
On Monday, Orascom Telecom Media and Technology (OTMT) said it had agreed to sell 95 per cent of its stake in mobile operator Mobinil to France Telecom in a deal reportedly worth $2 billion. The deal is subject to the approval of the Egyptian Financial Supervisory Authority (EFSA).
Mobinil stocks deepened their recent gains to climb a further 3.11 per cent, fuelled by reports shareholders will receive substantial dividends.
Recent days have brought a steady flow of rumours about the status of other subsidiaries linked to Orascom Telecom Holding (OTH) and OTMT, two companies spun off from Orascom Telecom following its sale to a Russian telecoms giant last year.
"OTH shareholders heard rumours of a possible sale of Djezzy [an Algeria-based unit which that country is trying to nationalise]. They're selling based on this news," said Kafrawy.
Shares in OTH dropped 2.19 per cent by the end of trade; its former stablemate OTMT fell a yet greater 2.7 per cent.
Egypt's largest listed company, Orascom Construction Industries, followed suit, shedding 0.89 per cent.
From the 179 stocks traded on Thursday, 64 gained in value while 103 declined.
With the exception of Mobinil and real estate developer SODIC, lower-cap stocks were the day's main winners. Their gains fuelled a 0.32 per cent rise for the broader EGX70 index.
Medinat Nasr Housing saw the day's largest rise, finishing up 8.01 per cent.
Non-Arab investors limited their plays in the session, making up an usually small 16 per cent of the market, and net-selling a hefty LE48.3 million.
Egyptian investors again played a decisive role, net-buying a total of LE55.7 million in stocks, as foreign interest waned.
"Political events used to influence the market but now their impact is limited," said Kafrawy, indicating that individual company news was now the key factor.
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