Weekly stock market: Stock market ends losing streak before holidays

Sherine El Madany
8 Min Read

CAIRO: After closing at record highs for two days in a row, Egypt’s stock market reversed track by mid-week on profit taking prior to local holidays.

The market snapped its two-day losing streak on Thursday, lifted by banking stocks.

The CASE30 Index rose to record highs on Sunday, gaining 1.56 percent at 11,754.53 points, on a turnover of LE 1.80 billion ($332.7 million).

The bourse was lifted by two index heavyweights Orascom Telecom (OT) and Orascom Construction Industries (OCI), which constitute around 50 percent of Egypt s benchmark CASE30 index. Shares of OT – the market s most heavily traded stock by turnover -rose 2.2 percent to last trade at LE 87.87, while OCI surged 5.8 percent to LE 454.

Both stocks moved in the green as they saw strong performance of their global depositary receipts (GDRs) in London on Friday. They were up 3.3 percent for OT and 3.1 percent for OCI.

Shares of OT extended gains on the heels of the company’s buyback offer for more than 10 percent of its shares. The stock jumped near 8 percent after the announcement on Thursday. The offer, which will also apply to the company s London- based GDRs, is for LE 83 per share, taking the potential cumulative value of the transaction to LE 8.798 billion.

The index was also boosted by Egyptian Financial and Industrial Company (EFIC), which climbed 4.1 percent to finish at LE 382.56 after it announced a stock dividend and stock split.

The firm, which is the largest listed fertilizer firm by market value, said on Sunday it will issue one-for-three free shares and that its shareholders meeting had approved a four-for-one stock split that would see its shares nominal value reduced to LE 10 from LE 40 each.

The Index posted new highs on Monday, increasing 1.4 percent to close at 11,913.41 points on a turnover of LE 1.8 billion ($340 million).

Shares of EFG-Hermes marked on Monday their sharpest one-day gain in almost 21 months, as investors anticipated the investment bank would profit from upcoming Initial Public Offerings (IPOs). The stock advanced 4 percent to LE 56.57, recording the day’s highest traded turnover.

EFG-Hermes is a global coordinator and book runner for Egyptian developer Palm Hills IPO next month and for the IPO of Egyptian oil and marine support company Maridive and Oil Services, which is expected to begin trading in May.

Construction conglomerate OCI also inched 3.3 percent up to finish at LE 462.23. The stock extended gains, as HSBC raised the company s price target in April to LE 592 due to a robust outlook for the fertilizer industry, the price of which has been soaring on the market.

Shares in sister company OT also performed well, gaining 0.5 percent to LE 87.87 on a strong traded volume. The Egyptian Company for Mobile Services (MobiNil), a subsidiary of OT, also moved 0.8 percent up to close at LE 198.77.

On buoyant expectations for the fertilizer industry, shares of EFIC extended gains, rising 2.3 percent to reach a price of LE 391.18.

The index fell for the first session this week on Tuesday, as investors took profits after a rally on shares of OT. The index dipped 0.7 percent to 11,913.41 points. It hit a record high of 12,039.19 points during the session before reversing track.

OT tumbled 1.2 percent to close at LE 81.32. The stock has rallied about 8 percent since it announced it would buy back 10.3 percent of its own shares, equivalent to 106 million shares, to make use of its cash surplus.

Weather Investments said on Tuesday it would sell some of its shares in OT to OT, while maintaining an above 50 percent ownership stake.

“OT is committed to giving back shareholder value, which is evident from its commitment to its buyback program and increase in its dividend distribution, commented Beltone Financial.

Shares of other telecommunications constituents took a blow, with MobiNil slipping 2 percent to LE 194.82 per share. Telecom Egypt (TE) also closed in the red, shedding 3.9 percent to LE 19.72.

EFG-Hermes bucked the trend and gained 1.7 percent to LE 57.51 on a high traded volume. The stock extended gains on coordinating two upcoming IPOs. Shares of Commercial International Bank (CIB) also went 0.8 percent up to LE 86.74.

The CASE30 Index retreated on Wednesday for the second day in a row, as investors continued to book profits prior to local holidays. Banks and the stock exchange will be closed on Sunday, Monday and Thursday next week.

The index sank 1.2 percent to close at 11,680.23 points on a weak turnover of LE 1.5 billion ($269 million).

Profit taking hit blue chips OCI and OT on Wednesday. OCI, which has gained 47 percent this year to Tuesday s close, witnessed the biggest drop in the construction sector. The stock plummeted 3.2 percent to reach LE 446.10 on a strong trading volume. Shares of OT also closed in the red, losing 0.5 percent to finish at LE 80.78. Big cap investment bank EFG-Hermes dropped 2.5 percent to LE 56.10.

The index snapped the market s two-day losing streak on Thursday, as shares of CIB and El Ezz Steel Rebars helped lift the bourse. The index gained 0.52 percent to close at 11,740.71 points on a moderate turnover of LE 1.58 billion.

The banking sector posted gains across the board on anticipations that state-owned Banque Du Caire could fetch a high price at an auction next month. News that bids for Banque Du Cairo were due in mid-May sparked some of retail buying in the sector. Lenders vying for a stake in the bank included UK-based Standard Chartered Plc, Saudi Arabia s Samba Financial Group, and National Bank of Greece SA, and UAE’s Al Mashreq Bank.

Shares of CIB, Egypt s largest by market value, rose 2.3 percent to LE 89.23 on a turnover of LE 52.8 million.

A rise in global steel prices also fuelled buying on El Ezz Steel Rebars, Egypt s second-largest steel company. The stock gained 0.87 percent to LE 91.55 on a turnover of LE 29.9 million.

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