Egypt’s market report: big caps rise on high hopes
The Hermes benchmark index rose 0.42 percent on Monday on the Cairo and Alexandria Stock Exchanges to close at 7766.58 on thin volume of EL114.6 million (US$32.7 million).
Foreigners showed some interest in the market, particularly in MobiNil, but a lack of sustained buying meant that prices remained low.
MobiNil was once again the best performing large cap, continuing the gains it made on Thursday and Sunday.
The market expects solid third quarter results from MobiNil and is buying into the stock accordingly.
However, Egypt's cash shortage means that many MobiNil customers will have problems paying their bills this quarter, and for the rest of this year - most subscribers will certainly reduce their usage.
Therefore results for the third quarter, and the second half, of 2000 will be poor.
MobiNil ended the session 3.61 percent up at EL87.20; turnover was EL36.7 million.
OT also did well yesterday, boosted by daughter company MobiNil.
The market was also excited by news that OT's new CEO, Jean-Baptiste de Boiffiers, was formerly France Telecom's CEO for mobile phones.
This rekindled rumors from the beginning of the month that OT will soon be bought by France Telecom.
However, an anonymous broker at one of Cairo's leading brokerages dismissed the persistent rumors, while admitting that OT was undervalued at current levels.
OT closed 1.24 percent up at EL51.48; it closed US$ 0.10 down in London.
Media Production City continued its fall as investors switched to more solid bets; not even news that the company will operate in a tax free zone could save the stock from falling 4.20 percent on the second highest volume of the day.
Lakah Group was one of the day's better performers, closing 4.46 percent up at EL1.64.
Ramy Lakah's return to Cairo, and a renewed AA- rating for the company's bonds, has encouraged investors.
Egypt's leading private bank CIB fell 0.16 percent to EL31.37 on volume of EL2.3 million (US$ 0.65 million) - it should remain at around EL30 until the market significantly improves.
PACHIN (Paint & Chemical Industries) and Nasr City Housing were both among Monday's top five gainers, PACHIN rising 4.38 percent and Nasr City rising 4.05 percent.
Both companies stand to do well if the real estate market picks up, and both were encouraged by Monday's report that the Cabinet was discussing a new mortgage law.
The Cabinet approved the draft law, and it will be presented to Parliament when it reopens in December.
Overnight interbank rates seem to be normalizing after a brief tremor last week: they fell 125 basis points to 10 5/8 percent, one percent higher than the rate last month. – (Albawaba-MEBG)
© 2000 Mena Report (www.menareport.com)