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Egypt stocks edge up 0.1 pct on economic optimism A brace of encouraging profit results and the possibility of an imminent IMF loan fuel a mild buying spree among local investors
Egypt stocks continued their recent rally on Wednesday, reflecting optimism over recent economic developments and President Morsi's removal of senior military figures and his cancellation of June's constitutional addendum. The benchmark EGX30 edged up 0.1 per cent to close out the day at 2,120.25 points "It is not only about the politics - we have positive economic news and good financial results as well," said Ashraf Abdel-Aziz, head of institutions sales at Arabeya Online Securities. Recent better-than-expected results for major firms, a mildly positive statement from a credit ratings agency and news of progress on a loan from the International Monetary Fund (IMF) all helped the market, Abdel-Aziz said. On Tuesday, global credit rating agency Fitch expressed guarded optimism over Egypt's latest political developments, saying Morsi's move to strengthen civilian rule held the promise of increased stability. The broader EGX70 index also gained a mild 0.4 per cent. Blue-chips did well on Wednesday, led by Commercial International Bank (CIB) which rose 0.6 per cent and saw the day's highest turnover of some LE226.6 million, around 38 per cent of the day's total volume of LE589.5 million ($97m). CIB reported an 18 per cent increase in second-quarter net income on Tuesday, above the expectations of analysts who say the country's lenders are benefiting from soaring yields on government debt. Net profit at the country's biggest privately owned bank by assets was LE523 million($86.17 million), above the LE443 million it reported for the same period a year earlier. Shares in Orascom Telecom failed to move either way, despite solid financial results. Net profits reached for the second quarter of 2012 reached $27 million, compared to a net loss of $58 million in 2Q2011. "OT suffered from profit-taking on Tuesday after a series of gains and it partially offsets some of yesterday's losses," Abdel-Aziz told Ahram Online. On the other hand, Egypt's biggest investment bank EFG-Hermes gained 1.4 per cent, despite reporting disappointing profits. EFG-Hermes said on Wednesday its second quarter net profit fell 66 per cent to LE27 million. The bank, which is planning a tie-up with Qatar's QInvest, reported net profit of LE80 million a year earlier. Ezz Steel and the Talaat Moustafa Group, both hit by legal cases in the aftermath of Egypt's 2011 uprising, climbed 2.6 and 1.1 per cent respectively. Fellow heavyweight Orascom Construction Industries slid 0.9 per cent to close at LE273 per share. Egyptians were the days only net-buyers, scooping up LE13.7 million more in shares than they sold. Foreign investors, meanwhile, sold LE1.4 million more than they bought.
