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Egypt stocks up Sunday after Morsi terminates controversial decree EGX30 jumps 4.61 pct after President Morsi moves to contain Egypt's ongoing political impasse
Egyptian stocks rose on Sunday following President Mohamed Morsi's decision Saturday night to annul his controversial 22 November constitutional decree, which triggered almost three weeks of political turmoil. Egypt's benchmark EGX30 index gained a vigorous 4.61 per cent, closing the day out at 5,061 points. The broader-based EGX70 index also registered gains, rising by 2.66 per cent. Of 159 traded shares, 126 chalked up gains for the day while only 16 suffered losses. "Investors are optimistic that the constitutional crisis might finally be coming to an end. There is an apparent decline in systematic [i.e., market-wide] risk, coinciding with political developments," Hani Geneina, head of research at Cairo-based Pharos Investment, told Ahram Online. Analysts say the rest of the week looks promising for the local stock market, as Egyptian and Arab investors will be heartened by the relative political stability. "With violence and confrontations unlikely to continue, the stock market is expected to extend its gains into the remainder of the week," Geneina asid. Daily turnover, meanwhile, remains uncharacteristically low, as it has since last year's uprising. Trade volume on Sunday stood at a mere LE215 million, suggesting that investors remain wary of Egypt's volatile political situation and still-sluggish economy. Rumours, meanwhile, continue to circulate that Sunday's surge was an "artificial" one, manipulated by specific Arab and foreign investors for political gains. Proponents of this view say the rise was not in line with the current state of the Egyptian economy and was meant to give a false impression of stability. Genena, however, says such claims "cannot be supported by available data." Foreign investors led the market on Sunday, net-buying some LE39 million of shares. Egyptian and Arab investors, meanwhile, were net sellers, offloading a total of LE17 million and LE21 million respectively. Blue-chip stock Commercial International Bank (CIB), popular among foreign investors, rose by 5.87 per cent on Sunday, making it the day's biggest gainer. Real estate giant Palm Hills also got a significant boost, rising by 4.64 per cent for the day. Orascom Construction Industries (OCI), meanwhile, Egypt's largest publicly traded company, also rose by 5.22 per cent.
