Market Report: Egypt shares surge 2.5 pct on upbeat financial results

Better-than-expected earnings for Telecom Egypt and Commercial International Bank fuel an uptick in trade, sending the main index surging back into the green

Egypt's stock exchange bounced back into the green on Thursday after two sessions of losses as estimates-beating earnings from banking and telecoms giants helped boost market sentiment and fuelled across-the-board gains.
The benchmark EGX30 gained 2.46 per cent to finish at 5,141.8 points, shaking off Tuesday and Wednesday's losses to close the week 175 points higher than it started.
"People are picking up names that got good results," Teymour El-Derini of Naeem Brokerage told Reuters, noting an increase in the number of foreign investors in the market this week.
Total market turnover was LE743,590 ($123,158), almost double the level on Wednesday, and approaching the average levels of mid-2011. Foreign investors made up about 22 per cent of the day's trade but were net-sellers, off-loading a hefty LE73.36 million worth of stocks.
The majority of trade clustered around high-cap banking, telecoms and real estate stocks, but smaller firms benefited too. From the day's 185 listed stocks, 173 gained in value and just nine declined, pushing the broader EGX70 up 3.21 per cent.
Commercial International Bank, Egypt's largest private bank by assets, surged 4.9 per cent after it announced a less-than-anticipated 9 per cent fall in its fourth-quarter net profits.
Though substantial, the losses were unsurprising and partly caused by the bank's increased spending on provisions, which surged to LE321 million from LE6 million the previous year.
Other financial institutions followed suit. NSGB gained 0.88 per cent and Credit Agricole climbed 1.62 per cent, fuelling an overall 4.05 per cent rise for the banking sector.
Equivocal results for 2011 also fuelled the performance of landline monopoly Telecom Egypt, which saw its stocks rise 1.6 per cent despite reporting a 6.8 per cent fall in earnings.
Analysts praised a wave of cost-cutting that kept profit margins flat despite lower revenues, while a note from the firm's financial chief said the company saw revenues little changed in 2012 and would continue to reduce costs.
Also back in the green was Orascom Telecom Media Technology (OTMT), rocketing 5.11 per cent after it said it hoped to wrap up within a few weeks talks with France Telecom over the sale of the bulk of its stake in local mobile operator Mobinil.
Shares in Mobinil itself closed the day up 2.9 per cent, while once-troubled firms like the Talaat Moustafa Group and Ezz Steel extended their gains by 2.9 and 4.3 per cent respectively.
Top trader was the country's largest listed firm, Orascom Construction Industries, which edged up a comparatively modest 0.77 per cent.
Despite the uptick in foreign trade, it was Egyptian individuals who once again drove trade.
Local traders made up LE486.9 million of the day's stock buys, leading one analyst to warn of a dangerous bout of speculation.