Weekly Stock Review: Egypt's stock market fluctuates as quarterly results pour in

Sherine El Madany
9 Min Read

CAIRO: Heavy losses pinched most Egyptian shares last week despite a plethora of third quarter results, after a wave of negative sentiment shrouded major markets around the world earlier in the week.

Overall, Egypt’s benchmark CASE 30 index plunged 8 percent to end the week at 4,823.59 points.

The stock market ended almost flat on Sunday, as declines in blue chips were offset by small cap bargains. The index lost 0.14 percent to 5,235.76 points trading on a moderate turnover of LE 873 million ($159 million).

Global and Gulf sentiment dragged Egyptian big caps, with the two biggest weights on the index Orascom Construction Industries (OCI) and Orascom Telecom (OT) both slipping more than 4 percent.

OCI shed 4.3 percent to LE 188, and OT tumbled 4.81 percent to LE 35.05 per share. Together both stocks constitute around 50 percent of trading on the CASE 30 index.

Shares in Egypt’s largest listed investment bank EFG-Hermes also closed in the red, dipping 0.3 percent to LE 23.61.

Meanwhile, traders explained that local retail investors were seeking bargains on many small caps firms that fell to cheap levels after suffering steep losses in recent months.

Local investors accounted for 79 percent of the market turnover and emerged as net buyers, according to the stock exchange data.

Nile Cotton Ginning rose 10.28 percent to LE 14.70, while. Egyptian Iron and Steel climbed 19.93 percent to LE 14.68.

El Nasr Clothes and Textiles (KABO) topped the session’s best performers and saw its shares jump 11.6 percent to LE 1.54. Polivara Spinning gained 8.6 percent to LE 3.52.

Egyptian shares witnessed Monday heavy buying across the board, buoyed by a wave of confidence as global stocks surged. The index gained 2.44 percent to close at 5,363.59 points on a turnover of LE 1.1 billion ($201 million).

Retail investors accounted for close to 80 percent of trading and were net buyers by LE 80.2 million ($14.5 million), according to stock exchange figures. They bought heavily into small- and medium-cap companies.

National Cement, Upper Egypt for Contracting and Urban Development, Rakta Paper Industries and Rowad Tourism all saw their shares gain the maximum of 20 percent.

World stock markets surged Monday in reaction to China s plan to spend nearly $600 billion on stimulating its economy as G20 finance ministers pledged to do what is needed to revive financial markets.

Egyptian heavyweights also performed well with OCI gaining 3.49 percent to LE 196.05 per share, and OT rising 0.8 percent to LE 35.86.

Commercial International Bank (CIB) – Egypt’s largest listed lender – jumped 2.4 percent to LE 32.19. Telecom Egypt (TE) edged 4.11 percent higher at LE 16.23 per share.

Shares in Talaat Moustafa Group (TMG) were the day s most heavily traded share by turnover at LE 71.7 million, rising 5.84 percent to LE 4.17.

The index tracked Gulf and European markets on Tuesday, despite reassuring results from companies posting their performance in the July-September quarter. The index slumped 1.33 percent to 5,292.20 points on a turnover of LE 1.06 billion ($192 million).

Egypt’s largest builder OCI sank 4.2 percent to LE 185.10 per share, while regional mobile operator OT plummeted 5.13 percent to LE 34.02.

Brokers said that sentiment in the Gulf states weighed on the market, pulling down big cap stocks.

Credit Agricole Egypt – which reported a 7.2 percent decline in nine-month net profit but growth in core business – slipped 3.52 percent to LE 10.43 per share. Public-dominated Egypt Aluminium lost 4.07 percent to LE 35.55, despite reporting a rise in July-September net profit by 0.8 percent.

The market also shrugged off news that real estate company Palm Hills Development posted LE 544.2 million in net profit in the first nine months of 2008. The stock – which mainly builds in luxury housing – skidded 4.63 percent to LE 7.83.

But shares of TMG tampered the market’s downturn, rising 1.2 percent to LE 4.13 on the session’s highest turnover at LE 82.9 million.

A near 10 percent dive in index heavyweight OT on Wednesday dragged the market to its sharpest single-day fall in two weeks. The index – down 50 percent this year to Tuesday s close – stumbled 5.11 percent to 5,021.94 points on a moderate turnover of LE 844 million ($153 million).

Shares of OT, the sixth-worst performer on the index this year, plunged 9.96 percent to LE 31.01 towed by poor performance in global markets. The stock posted the session’s highest turnover at LE 50.4 million.

Stock markets around the world, including those in the Gulf region, fell as evidence mounted the rich-world downturn is spreading through emerging markets.

Shares of EFG-Hermes dipped 8.28 percent to LE 21.50. TMG shares lost 4.6 percent to LE 3.94, as investors took profits.

Ghabbour Auto, Egypt s largest publicly traded car assembler, posted its second-highest quarterly profit on record. Still negative market sentiment pulled the stock 12.53 percent down to LE 20.11.

Carpet-maker Oriental Weavers – which posted Wednesday growth in profit – also closed in the red, plummeting 4.34 percent to LE 21.80 per share.

Oriental Weavers sells around 30 percent of its products in the United States and has said stagnation there would hit its full-year profit growth.

The market slid for the third-session in a row as falls in big caps pushed the index into the red territory. The index slipped 3.95 percent at 4,823.59 points.

Market heavyweight OCI dipped 3.31 percent to LE 172.74 per share, and OT retreated 6.32 percent to LE 30.25, with brokers saying much of the selling pressure on blue chips came from foreigners exiting.

Traders Reuters spoke to on Thursday said the Egyptian market remained enthralled by market movements in Europe and the United States, and to a lesser extent in the Gulf region.

We are affected by the global markets whether we like it or not, Karim Hosny from Pharos Securities told the news agency. He added that investors were not closely watching the string of third quarter results issued this week.

The effects of the crisis won t appear now on the results of the companies, it will probably appear in the next couple of quarters, he said.

Shares of TE slipped 1.36 percent after posting a 35 percent jump in third quarter profit.

CIB – the third biggest weight on the index – posted a 25 percent rise in profit that still came in below some analysts’ expectations. The stock ended up slightly at LE 31.

Investment bank EFG-Hermes dripped more than 10 percent to end at LE 19.70 after posting a steep decline in third quarter profit.

On the green side, cement and steel firms showed some resilience and solidified profit gains with growth on the market.

Egypt s largest cement maker Suez Cement gained 1.64 percent to LE 23.50 after it posted a 14 percent rise in nine-month profit on the strength of the local market.

Ezz Dekheila Steel – a subsidiary of Ezz Steel – made net profit of LE 2.7 billion in the first nine months of 2008, 53 percent up on the same period of 2007.

Share This Article
Leave a comment