Egyptian bourse stable, awaiting foreigners
Trading started the week quiet on the Cairo and Alexandria Stock Exchange. There was little news in Cairo to enliven the bourse, and an absence of foreign buyers meant the market was particularly subdued.
The benchmark Hermes index closed 0.56 percent down Sunday at 7734.70 on a total turnover of EL40.5 million (US$11.5 million).
MobiNil and Orascom Telecom were solid, and a few medium-cap companies made good gains. Some bits of good news on Monday may push several stocks higher this week.
MobiNil was once again the day's busiest stock, with turnover of EL12.3 million (US$3.5 million). Expectations are high that foreigners will buy the stock this week, after heavy buying last Thursday, and MobiNil was supported on Sunday. It closed 0.5 percent up at EL84.16.
Orascom Telecom followed MobiNil yesterday: it ended the session 0.59 percent up at EL50.85 (ELUS$14.5).
Media Production City (MPC) was once again the day's big loser: the company's lack of transparency means that it has suffered more than most over the last three months, and it has pulled the Hermes index down with it.
MPC closed 3.65 percent lower at EL23.79 on volume of EL11.4 million (ELUS$3.25 million).
Several undervalued stocks did well on Sunday: Orascom Hotel Holdings (OHH) rose nearly 5 percent to close at EL5.99. Most of OHH's revenue is in dollars, while its costs are in Egyptian pounds, making the company resistant to exchange rate risk.
Lakah Group continued its rebound following the return of chairman Ramy Lakah from Europe last week to close 4.67 percent up at EL1.57.
Nile Rating, an Egyptian credit rating agency, renewed its AA- rating of Lakah's bonds in a report on Sunday - this vote of confidence should push Lakah's shares higher this week.
An article in the September 25th edition of Al Ahram reported that the Cabinet is debating a new mortgage law, which may help revive construction and real estate stocks. Egypt's antiquated mortgage laws prevent loans from being secured on property; this has slowed recovery in Egypt's real estate market and has restricted investment in construction and property.
News that the Central Bank is to inject ELUS$250 million into the market in a effort to restrict the devaluation of the pound in Monday's [September 25] Al-Alam Al-Youm is less welcome. Prime Minister Atef Ebeid told the Euromoney forum two weeks ago that his government "will never interfere through administrative actions in the foreign exchange market." – (Albawaba-MEBG)
© 2000 Mena Report (www.menareport.com)