Egypt’s bourse finished yesterday’s transaction in the green zone for the first time this week driven by a wave of purchases by both foreign non-Arabs and Arabs investors targeting blue-chips.
The benchmark index EGX 30 rose 1.52 % to reach 4848.06 points, while the broader index for small and medium sized enterprises (SMEs), the EGX 70, declined by 0.52 %.
However, both the EGX 20 and EGX 100 saw slight increases, of 0.90% and 0.01 %, respectively.
On Sunday and Monday Egypt’s stock exchange fell to its lowest levels since December 2012, amid investors’ concerns over current political instability ahead of nationwide protests planned for 30 June against President Mohamed Morsi.
Ashraf Abdel Aziz, a market expert, said there is no specific drive behind the index’s rise in yesterday’s trading. “After every consistent decline there must be a slight increase, which is the main reason for today’s rise,’’ he said, attributing the pick up to “Arabs’ and foreigners’ rush to buy shares especially those of the Commercial International Bank.’’
Commenting on the week’s decline, Moustafa Badra, an economic and market expert, said “bourse transactions are affected by the potential unrest and the political scene is the main reason.” He said it is difficult to predict future performance of the index given the government’s policy ambiguities and growing frustration among the populace.
Amongst the market’s main developments was Emirates National Bank of Dubai (NBD) completing its acquisition of BNP Paribas’ Egyptian assets at a cost of nearly $500m, according to Rick Pudner, Chief Executive Officer of the bank.
In a statement published on Monday, Pudner stated that Egypt is the Middle East’s most influential market, and that Emirates NBD is committed to working with and helping to preserve Egypt’s economy. He described the bank’s entry into the Egyptian market as a milestone in the bank’s journey and expressed NBD’s interest in further expansion in the North African country.
The deal, which was signed Sunday, grants Emirates NBD the ownership of 95.2% of BNB Paribas’ shares on the Egyptian stock exchange, at an estimated value of $471.5m. The bank first had to obtain approval from Egypt’s Central Bank and the General Authority for Investment and Free Zones before going through with the merger. Emirates NBD also obtained a 4.8% minority share of stock in both Banque Misr and the Workers Insurance Fund within Banque du Caire.
“The BNP Paribas deal is double edged,” Badra said. “It is good for the entrance of new investor to the Egyptian market, but it sounds unfortunate since a [longtime] foreign investor [has exited].”