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Market Report: Egypt stocks slide 1 pct on European turmoil Exchange sees another wave of across-the-board losses as a plunge in European stocks prompts caution at home
Egyptian stocks slid for a third consecutive session on Wednesday, affected by a downturn in European markets and investor caution ahead of post-Mubarak presidential elections that may make little difference to the country's macro-economic outlook. The benchmark EGX30 slid 0.99 per cent to close out the session at 4,955 points, slipping below a key support level just days after it hit a seven-week high.The broader EGX70 slipped 0.54 per cent, reflecting minor losses for smaller stock. "All of the world's stocks are being affected by falling European shares, even Egyptian ones," Walaa Hazem, vice president for asset management at HC Securities & Investment, told Ahram Online. On Tuesday, European shares fell to their lowest closing level in 2012 after attempts to form a Greek government collapsed, hitting heavyweight financial stocks. Traders said a further slump was possible. Hazem believes European anxieties had a greater effect on the trading session than uncertainties over domestic politics. From the 160 shares traded on Wednesday, just 34 gained in value and 108 declined. Market volume was a modest LE330.8 million ($54.78m), a downturn mirrored by other stock exchanges in the region such as the UAE and Jordan. EFG-Hermes made up around a sixth of the day's trade -- some LE54.8 million -- still influenced by the news of the firm's involvement in a new regional investment bank based in Qatar. Moves to take profits from last week's gains, however, saw the firm's shares slip 1.14 per cent in value. Close behind in terms of trade volume was mobile operator Mobinil, revitalised by the decision of its board of directors to accept a tender from France Telecom to sell 100 per cent of its shares at a price significantly above their current market value. Mobinil stock was up a further 0.3 per cent by close of play, with gains likely to continue in advance of 23 March when the French giant is due to pay out for the deal. The mild gains didn't spread to the rest of the sector; shares in Orascom Telecom dropped 1.81 per cent while its former stablemate OTMT punged a yet greater 2.11 per cent. Other heavyweights Orascom Construction Industries and the Commercial International Bank fell 0.81 and 0.46 per cent respectively. The real estate sector, home to several of the market's major firms, saw sell-offs towards the end of the session: both the Talaat Moustafa Group and Palm Hills Development lost ground. Foreign institutions led the exit from the market, selling off LE30.267 million of stocks. Egyptians, in contrast, scooped up a net LE27.8 million. In recent days it has been local retail and institutional investors that are dominating trade, investing in stocks with high-liquidity that offer easy entry and exits. "The EGX30 can't break the resistance at 5,145 point with a clear weakness in buying power," said Ahmed Sharaby, Cairo-based technical analyst at Mawarid Egypt. "The low volumes will lead the index into a correction and test the support area of 4,950 and 4,890 points. We expect a new upward move from this support zone in the last week of May with elections and stabilization news," Sharaby added.