Foreign buying of big caps lifted Egypt's main index EGX 30 up on Monday, while the other indexes were in the red, traders said. Egyptian retailers and Arab investors made net sell-offs of LE63.9 million ($11.6 million) and LE44.4 million respectively, they added. The North African country's benchmark index EGX 30 rose slightly by 0.12 per cent, ending the day's trading at 6,855.25 points. The EGX 70 index, which measures 70 of the country's small and mid caps, shed 0.47 per cent to 715.91 points. The wider EGX 100, which weighs 100 small stocks, was 0.4 per cent down to 1,163.15 points. Volume hit LE975 million, according to the Egyptian Exchange. EFG-Hermes, Egypt's largest investment bank by market value, jumped by 1.46 per cent to LE31.88 per share. Orascom Construction Industries, Egypt's largest builder by market value, inched up by 1.3 per cent, closing at LE267.22 per share. Orascom Telecom, the largest Arab mobile operator by subscribers, slipped by 0.35 per cent to LE5.68 per share. Egyptian stocks were cut to "neutral" from "overweight" at HC Securities and Investment because of expected currency weakness and a resultant rise in inflation until drivers of domestic growth recover, according to Bloomberg. The local market is likely to see capital outflows as uncertainty about the Dubai debt crisis and the Gulf region wanes, Cairo-based analysts at HC Securities led by Tudor Allin-Khan said in a report. Dubai will support Dubai World's debt restructuring with $9.5 billion as the state-owned holding company asks creditors to wait up to eight years to get all their money back, the government said last week. "We anticipate an asset allocation shift away from Egypt as investors become more confident in the situation surrounding Dubai debt negotiations and want to invest in countries with fiscal surpluses," the analysts said. The Central Bank of Egypt may raise interest rates because of higher inflation from rising energy prices, a possible reduction in energy subsidies and higher commodity prices as the global economy recovers, they said. The drivers of the Egyptian economy, foreign direct investment, Suez Canal revenue, exports and remittances haven't shown signs of sustainable recovery, the analysts said. Foreign direct investment is unlikely to reach pre-crisis levels until 2011, they added. HC Securities' focus stocks include Talaat Moustafa Group Holding, National Societe Generale Bank, Ezz Steel Rebars SAE and Citadel Capital, which "will continue to offer investors upside potential," it said.
