Egypt's Stocks Rise Slightly on GDRs Gain

Egypt stocks rose slightly following last week's market fluctuations, as analysts had expected a market rise following strong Global Depository Receipts (GDRs) gains. Shares listed in the London Exchange such as heavyweight Orascom Construction Industries (OCI), Orascom Telecom (OT) and blue-chip Commercial International Bank (CIB) registered significant gains and thus boosted the Egyptian market.

Egypt's benchmark EGX30 index rose by 0.46 per cent to almost 5, 442 points. The broader-based EGX 70, nonetheless, registered a minor turn down of 0.04 per cent. Out of 177 traded stocks, 61 shares registered gains while 80 suffered losses. Shares with the biggest market volume such as OCI and CIB dominated the market and led the stock market upwards.

Foreign investors were net buyers for the day picking up almost LE23 million worth of shares, meanwhile, Egyptian and Arab investors were net sellers offloading a total of LE 23 million and LE 0.60 million respectively. "The market was expected to rise today as GDRs boosted investor confidence, this trend is expected to last for a few says", Ashraf Abdel-Aziz, head of institutional sales at the Cairo-based Arabia Online Securities, told Ahram Online.

The Central Bank of Egypt, implemented a new regime, which includes regular currency auctions, seemed to represent a controlled shift towards a free float after the central bank spent more than $20 billion in reserves over the past two years to defend the pound, according to bankers. A two per cent administrative fee will be imposed on individuals who purchase foreign currencies.

This led the Egyptian pound to hit a record low against the dollar on Sunday as worried Egyptians shifted their money out of local currency after the central bank introduced a new currency regime to protect foreign reserves. "Despite while some analysts might claim, the sliding rate of the Egyptian pound against the dollar, might actually attract investors as they would perceive the rate as somehow fair", explained Abdel-Aziz. The real estate sector led the market today in terms of turnover, recording almost LE 74 million.