Weekly Stock Review: Market makes early gains, ends in the red

Sherine El Madany
7 Min Read

CAIRO: Egypt’s bourse kicked off the week with gains, posting four days of green trading. Investors had bought up shares since the start of the week on Sunday in anticipation of the outcome of the US elections – boosting the market – and took profits on the first day after Democrat Barack Obama won the White House.

Overall, Egypt’s benchmark CASE 30 index leapfrogged, gaining 11.17 percent to end the week at 5,243.20 points.

The index mirrored European markets and rallied Sunday 5.85 percent to 4,992.25 points, as local retail investors grabbed bargains across the board.

Still, trading turnover was relatively low at LE 651.2 million ($116.3 million).

Index heavyweight Orascom Telecom (OT) led gains, soaring 7.53 percent to LE 34.42, in part because the firm s global depositary receipts (GDRs) added 6.75 percent on Friday.

European and US markets ended October with one of the best weeks on record after weeks of plummeting.

Shares in Egypt’s biggest investment bank EFG-Hermes surged 7.18 percent to LE 24.93, and Commercial International Bank (CIB) rose 4.4 percent to LE 29.08 per share.

A number of stocks reached the maximum gain of 20 percent and automatically stopped trading for the day. Torah Cement gained 10.88 percent to LE 26.30 and Ezz Steel added 14.62 percent to LE 10.66.

Talaat Moustafa Group (TMG) also ended in the green, advancing 4.17 percent to LE 3.75. Construction conglomerate Orascom Construction Industries (OCI) rose 2.7 percent to LE 191.48.

The market extended gains for the second straight session on Monday, lifted by news that regional mobile phone operator OT plans to buy back shares.

The index rose 3.21 percent to 5,152.55 points on a moderate turnover of LE 999.7 million ($181.8 million).

Shares in OT – the biggest Arab mobile phone operator by subscribers – inched 5.65 percent higher to LE 36.11 after it said it was planning to buy back 23.59 million shares between Nov. 2 and Jan. 30.

The numbers of shares sought by the firm represents some 2.3 percent of total shares, according to Reuters data.

Sister company OCI also moved in the green, rising 1.3 percent to LE 193.96. Giant real estate developer TMG increased 2.13 percent to LE 3.84.

Shares of CIB – Egypt’s largest listed bank – climbed 6 percent to LE 30.82.

Bucking the trend were shares of EFG-Hermes, which slipped 3.64 percent to LE 24.86 after it said merger talks with Lebanon s Audi Bank had been called off. EFG-Hermes said it broke off merger talks due to unfavorable market conditions and ongoing international financial turmoil, but that it did not intend to sell its 23 percent stake in the Lebanese bank.

Rising in line with Gulf Arab markets and boosted by gains in big caps, the index ticked 3.14 percent higher on Tuesday to 5,314.56 points on a relatively high turnover of LE 1.015 billion ($184.6 million).

Shares in OCI – which had lost 60 percent of its value since April – jumped 2.61 percent to LE 199.02. Dual-listed Egyptian firms like OCI often take their cue from global markets, where volumes are much larger. In turn, these heavily weighted stocks usually give direction to the overall market.

Regional mobile operator OT also gained ground, rising 6.6 percent to LE 38.26. Shares in fertilizer firm Egyptian Financial and Industrial Company (EFIC) surged 11.78 percent to LE 31.61 on renewed interest from institutional investors.

But shares in regional investment bank EFG-Hermes bucked the upward trend and lost 7.02 percent to LE 23.58. The shares have lost 60 percent of their value since January.

The firm said on Tuesday it would eventually revisit a merger with Audi Bank. It was parked for the time being…. It will be revisited at some point in the future when the environment changes, said Hazem Shawki, a managing partner.

The market ended in the green on Wednesday after a steady decline from a sharp spike early in the day, as investors were taking profits on many big cap stocks on the first day after Democrat Barack Obama won the White House.

The index closed 0.75 percent up at 5354.35, after rising as high as 5512.10 within the first 15 minutes of trade before trailing off to the closing level. Trading turnover stood at LE 1.114 billion ($198.9 million).

A number of big cap shares also peaked early in the session and then declined to fall into the red. OCI lost 0.38 percent to last trade at LE 200 per share, while investment bank EFG-Hermes shed 2.02 percent to LE 24.27 per share. Big cap CIB plunged 6.29 percent to LE 30.86 per share.

Tampering the market’s trend were shares in OT, which managed to close the day 0.29 percent higher at LE 37.50.

The market reversed its four-day winning streak on Thursday and dipped 2.08 percent to 5,243.20 points, as it tracked global markets lower.

The index dipped sharply in early trade, plunging almost 5 percent before paring some losses on a renewed fundamental view of the market.

Index mainstay OCI tumbled 1.48 percent to LE 197, after EFG-Hermes downgraded OCI s long-term fair value appraisal by 26 percent to LE 310.40.

However, the investment bank kept a buy rating on the stock, saying further falls would make the share price attractive.

Regional and international volatility has buffeted the Egyptian market in recent weeks and months, with the wholesale exit of foreign investors leaving many companies undervalued, Reuters reported.

Other big cap stocks also ended the day in the red, with OT plummeting 5.76 percent to LE 35.98 and EFG-Hermes losing 3.07 percent to LE 23.69.

Ezz Steel slipped 0.45 percent to LE 11.08. Meanwhile, shares of CIB gained 1.33 percent to LE 32.65.

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