CAIRO: After rising 3.6 percent since May 22, the bourse broke at the beginning the week its six-day winning streak on profit taking. Egypt’s benchmark CASE30 index extended losses for three straight sessions and then snapped off its losing streak on Wednesday, moving beyond 11,000 points, on rumors of a possible merger.
Overall, this week the index lost 0.22 percent to 11,032 points.
The market started off the week with the index dipping 0.3 percent to 11,028.43 points on a high turnover of LE 2.31 billion ($432.67 million), as profit taking hit big caps.
Egypt’s construction conglomerate Orascom Construction Industries (OCI) sank 2.3 percent to LE 390.53 on a turnover worth LE 33.6 million. The firm, Egypt’s largest by market value, reported on Thursday a 224 percent rise in consolidated net income to $454.4 million in the first quarter of 2008, which prompted profit taking on Sunday.
Investment bank EFG-Hermes lost 0.5 percent to LE 52.87 on a low turnover of LE 18.89 million.
Bucking the trend were shares in housing stocks with giant real estate developer Talaat Moustafa Group (TMG) – which was still reeling from newly expansion plans and a deal that took place for 77.08 million of its shares – gaining 2.3 percent to LE 10.61 on a high turnover of LE 817.85 million.
Other real estate constituents closed in the green. All macroeconomic indicators point to a strong growth potential in the region s housing market.
Shares of Sixth of October Development and Investment Company (SODIC) climbed 6.2 percent to LE 190.98, while Cairo Housing rallied 4.9 percent to LE 23.44. Nasr City Housing and Development also rose 3.4 percent to LE 63.56 on a turnover of LE 81.3 million.
The market extended losses on Monday, as the CASE30 Index shed 0.9 percent to 10,924.71 points on a moderate turnover of LE 1.7 billion ($318.42 million), still hit by profit taking after the previous week’s gains.
Shares of index heavyweight OCI tumbled 1.9 percent to LE 382.94 on the third highest turnover of the session at LE 63.79 million. Sister company Orascom Telecom (OT) also slipped 0.2 percent to close at LE 77.93.
Financial services constituents also closed in the red with EFG-Hermes sinking 2 percent to LE 51.841, while shares of Commercial International Bank (CIB) fell 0.9 percent to LE 83.71.
Egypt’s giant steel producer El Ezz Steel Rebars lost 1.9 percent to LE 82.71, posting the second highest turnover.
Meanwhile, shares of El Sewedy Cables – one of the biggest cable manufacturers in the Middle East – rose 1.9 percent to LE 143.56 after the company said it would build a $150 million power cable plant in Qatar to tap surging Gulf Arab infrastructure spending.
Shares of Nasr City Housing and Development topped the best performers list, hitting the day s highest price gain of 2.2 percent to LE 65.01 on the session’s highest turnover of LE 91.73 million.
The bourse declined for a third session in a row on Tuesday, with the CASE30 Index losing 0.6 percent to 10,862.94 points on a low turnover of LE 1.4 billion ($264.72 million).
Profit taking hit most housing stocks, whereby TMG slipped 2.6 percent to LE 10.43 after gaining some 12 percent in the last four sessions. Heliopolis Housing dipped 1.8 percent to LE 489.89, while Nasr City Housing lost 0.2 percent to LE 64.94.
Banking constituents were also out of favor, as shares of CIB fell 0.4 percent to LE 84, and EFG-Hermes dropped 1.9 percent to finish at LE 50.85.
But OCI, Egypt’s largest listed construction company, was back in the green after its price fell in the previous two sessions, making it attractive to investors. Shares in the firm rose 0.5 percent to LE 385 after losing over 4 percent since beginning of the week.
Shares in OT also rose 0.6 percent to LE 77.40 after Goldman Sachs upgraded the stock to buy from neutral, setting its price target for the firm at LE 100, saying merger and acquisition talk in Africa could boost the company s shares.
The index reversed its slide on Wednesday and inched 1.9 percent up to 11,071.93 points on a high turnover of LE 1.7 billion ($318.42 million), mainly lifted by CIB merger talks.
Egypt’s biggest listed lender CIB posted Wednesday its sharpest single-day gain in almost six months on rumors that a possible merger with Arab African International Bank (AAIB) could be back on track. Shares of the bank surged 4.9 percent to LE 87.09. CIB announced last month that talks with AAIB on a possible merger had failed, but market speculation suggested talks could resume. Investors were also buying shares of the bank because they previously fell to attractive levels, relatively cheaper than its earnings expectations. According to Reuters data, CIB posted 67 percent growth in first-quarter profit last month and is trading at 12.22 times estimated 2008 earnings, compared to a sector average of 14.86 times.
Similarly, shares of EFG-Hermes closed in the green, as investors deemed them cheap. The stock, which fell for the past five straight sessions, soared 2.4 percent on Wednesday to close at LE 52.08. Reuters data stated that EFG is now trading at 12.25 times estimated 2008 earnings, compared to a sector average of 13.88 times.
Blue-chip OT moved back in the green, as its shares advanced 1.9 percent to LE 78.86 boosted by a share buyback and Goldman Sachs’ research report. OT said last month it would buy back up to 12 million of its own shares at LE 83 each starting on June 2. Sister company OCI edged 0.4 percent higher to LE 385.80 on the session’s third highest turnover of LE 137.5 million.
The market reversed Wednesday’s gains and fell for the fourth session in five on Thursday, as investors booked profits. The CASE30 index lost 0.4 percent to close at 11,032.49 points after touching a high of 11,122.09 points during the session.
Leading declines were shares of OCI, the market s most heavily traded stock by turnover, plunging 3.3 percent to last trade at LE 373. Market heavyweight OT dipped 0.1 percent to LE 78.79 pounds. Together both stocks constitute around 50 percent of the market’s turnover.
Shares in CIB, which led the market up on Wednesday, fell 1.8 percent to LE 85.50 on profit taking.
