Market Update: Egypt shares inch up 0.5 pct on takeovers, looming elections

Bourse shows signs of stabilising as investors look to profit from high-profile Mobinil and EFG-Hermes deals and eye imminent presidential vote

Egyptian shares saw another wave of mild gains on Tuesday as the market showed signs of stabilisation, heartened by two high-profile deals and the approach of much-anticipated presidential elections.
The benchmark EGX30 inched up 0.56 per cent to finish Tuesday at 5,056 points in the week's third consecutive session of upwards movement.
"The market is seeing a kind of stabilising -- it has passed through a very tough phase in terms of politics," said Walaa Hazem, vice president for asset management at Cairo-based HC Securities & Investment.
"It's not stable yet but there is development. Things will remain stable -- neither positive or negative -- until the second round of presidential elections are concluded."
From the day's 169 traded stocks, 86 gained in value and 62 declined, with the rest holding their value. The performance -- more mixed than that of Monday -- meant the broader EGX70 climbed a modest 0.31 per cent.
Total volume was LE387.94 million ($64.26m), marginally up on Monday, with EFG-Hermes and Mobinil responsible for the heaviest trade: LE31m and LE41m respectively.
The former continued to ride the wave of interest generated by news that the firm, the Middle East's largest investment bank, has inked an agreement with Qatar's QInvest to form a region-wide investment bank. The new entity will be called EFG-Hermes Qatar, according to reports.
Trade in the bank, however, shifted gears -- as investors sold EFG-Hermes stock to take advantage of its recent series of gains. Shares finished the day down 1.66 per cent as a result.
Mobile phone operator Mobinil continued to trade heavily after news of an imminent France Telecom takeover with 191,000 shares changing hands. Shares, however, closed a meagre 0.07 per cent up.
"Investors are trying to make a riskless 3 per cent, by buying in the market and then placing [their purchases] on tender with France Telecom," said Hisham Halaldeen, Head of Research Sales at Naeem Holding.
France Telecom has offered to buy Mobinil stock at LE202.5 per share, according to market sources.
The most significant gains were once again in the real estate sector which climbed an overall 1.5 per cent. Major firms in the sector such as the Talaat Moustafa Group, Palm Hills Development and SODIC all traded at least 1 per cent higher.
Foreign investors, responsible for 22 per cent of trade, diverged from their recent position to become Tuesday's sole net-buyers, scooping up LE19.53 million more in stock than they sold, fuelled by solid interest by institutions.
"This is the first time in recent sessions [that foreigners are buying] so we can't say whether it is a serious reversal or not," said Hazem.
He added that the market might see a modest further climb in the coming weeks if France Telecom's payment for Mobinil shares is followed by indicators of an improved economic picture for Egypt.
Earlier this week Egypt's central bank reported that the country's foreign currency reserves had seen a mild climb for the first time since December 2010.
"If this happens for a second month and we see Saudi aid money come through then this might create more positive sentiment," Hazem said.