CAIRO: Egypt’s main index closed down a fraction in thin trade as court decisions over sales of state land to real estate developers weighed on investor confidence, traders said.
The EGX30 index was broadly flat, shedding 0.16 percent to close at 4,988 points, with property developer Palm Hills Development down 3.6 percent and Talaat Moustafa 7.2 percent lower.
An Egyptian court ruled on Tuesday that the sale of a plot of state land to Palm Hills, the country’s second-biggest listed developer, was illegal and scrapped the contract.
The court also adjourned a hearing into a similar land sale to Talaat Moustafa.
Traders also said volumes were low due to investors extending a long holiday weekend.
"I think investors are feeling panicked about what’s happening in the real estate sector," said a research analyst at Beltone Financial, adding he expects the index to be range-bound between 4,700 and 5,000 points for the rest of the week.
Egyptian real estate stocks have tumbled this year as the government which took over after president Hosni Mubarak resigned investigates possible irregularities into state land sales committed by the previous administration.
Shares in investment bank EFG-Hermes, under the spotlight for its association with Mubarak’s son Gamal, dropped 8 percent. The bourse briefly halted trading in the stock after the firm announced a 1-for-10 share offer to raise capital.
Telecom Egypt ended the session 4 percent higher after shareholders approved a LE 1.3 ($0.22) cash dividend on Tuesday. Ezz Steel closed 9.3 percent lower — a two-year trough.
"The ongoing news is not that encouraging for sentiment as we are awaiting discouraging news regarding first-quarter earnings," says Nader Khedr, an investment and capital markets analyst.