Al-Ahram Weekly Online   25 - 31 August 2005
Issue No. 757
Published in Cairo by AL-AHRAM established in 1875

The fall continues

Egyptian shares dipped to their lowest point in 10 weeks. Wael Gamal reports

Led by EFG-Hermes and Raya Holding for Technology and Communication, Egyptian shares dipped to their lowest point in 10 weeks in the first trading day of the week. Indices reflected the bear market atmosphere. The CASE 30 index was down by 0.5 per cent to 4628.75 points while the benchmark Hermes index fell 0.4 per cent to 40,733.90 points which is its lowest closing level since 16 June. The broader CIBC index slipped 0.3 per cent to 148.29 points.

Raya shares lost about five per cent to close at LE13.94 on the first day when investors were able to sell shares acquired in a recent capital increase. On the other hand EFG-Hermes, the most heavily traded stock in terms of turnover, last traded 1.5 per cent lower at LE40.28 in a corrective move.

National Société Générale Bank was the obvious exception of the day. Trading of NSGB was halted after the stock rose more than 10 per cent on investor speculation the bank would benefit from its parent firm's acquisition of Misr International Bank (MIBank). The French bank said last week that shareholders holding 69.7 per cent of MIBank had agreed to sell their stakes to NSGB. As a result, NSGB shares climbed 11 per cent to last trade at LE60.89.

The downward trend came as a continuation of last week's negative market performance. Despite its slight increase at the beginning of last week due to the release of solid first half financial results, the CASE 30 Index ended the week on a negative note, following a profit taking pattern to close at 4652 points, thus recording a decrease of 1.3 per cent compared to the previous week. On Thursday, the final session of the week, the Hermes index slid 487 points, or 1.18 per cent, to 40,897.93 points. The broader CIBC index slipped 3.19 points or 2.1 per cent to 148.75 points.

Egyptians controlled 64 per cent of the value traded during the week with the balance owed to foreigners, who were net sellers with a net equity outflow of LE51 million.

Market driven factors may not be the only ones affecting the market as some analysts believe that presidential election jitters may be driving down the Egyptian stock exchange and will continue to do so until election day.

The total value traded reached LE2,146 million compared to the LE1,971 million of last week while total volume decreased to 69 million shares compared to 70 million shares last week. This week a little over 60,000 transactions were executed as opposed to 61,000 transactions the week before. The Textile & Clothing sector continued to dominate the market, ranking first in terms of volume traded and fifth in terms of value traded. It recording 13.9 million shares traded worth LE115 million. This was mainly due to the typically heavy activity of Arab Cotton Ginning, Nile Cotton Ginning and Arab Polvara Spinning and Weaving companies which ranked second, third and fifth respectively in terms of volume traded. Together, they registered more than 93 per cent of the sectors' trading volume.

The Telecommunication sector was the most active of the week in terms of value traded -- recording a trading value and volume of LE515 million and 2.4 million shares, respectively. This can mainly be attributed to the heavy activity of Orascom Telecom which ranked second in terms of value traded, following the execution of the Wind deal. MobiNil's robust increase of 71 per cent in its net profit during the first half of 2005, brought it to third place in terms of value traded.

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