UPDATE – Egypt business digest Nov. 15: EGX loses 2.2 EGP Tuesday; main index declines
The Egyptian Exchange (EGX) - YOUM7 (Archive)

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EGX loses 2.2 EGP Tuesday; main index declines

The Egyptian Stock Exchange closed Tuesday session at a collective rise to all indexes except for the main one that saw a decline by 0.5 percent.

The session was powered by Egyptian and foreign purchases, while Arabs were mostly selling.

The Market capitalization lost 202 billion EGP during the session, Youm7 reported.

 

Saudi, Egypt continue pull-back, MSCI index changes affect UAE, Qatar

(REUTERS): Stock markets in Saudi Arabia and Egypt continued pulling back on Tuesday after big rallies earlier this month, while some individual stocks in the United Arab Emirates and Qatar moved sharply after MSCI adjusted its indexes.

The Saudi index, which had jumped 22 percent between mid-October and Sunday before profit-taking began on Monday, dropped 2.1 percent to 6,493 points on Tuesday in heavy trade, pulling back from technical resistance on the July peak of 6,703 points.

However, the index ended well off the day’s low of 6,346 points. Among major losers, National Commercial Bank, the biggest lender, dropped 4.5 percent. Petrochemicals held up relatively well.

A Saudi fund manager said the market had been supported by local and government funds and when these stopped buying on Tuesday, profit-taking pressure quickly pushed stocks down.

Some investors had been hoping that international index compiler MSCI would announce, along with its index revisions, that it was starting the process of upgrading Saudi Arabia to emerging market status, two fund managers said. There was disappointment when this did not happen.

Riyad REIT, which jumped its 10 percent daily limit when it listed on Sunday and did so again on Monday, rose a further 3.7 percent, but heavy trading volume showed some investors were keen to take profits.

Egypt’s blue chip index dropped 0.5 percent, though it remains up more than 25 percent on hopes for inflows of foreign funds since the central bank floated the Egyptian pound on Nov. 3. Trading volume remained very heavy.

Nine of the most heavily traded stocks rose and some financial stocks continued to surge, such as investment bank EFG Hermes which added 4.2 percent.

The index was mostly pulled back by a 1.5 percent decline in the biggest lender, Commercial International Bank, down 1.5 percent, and a 1.7 percent loss by Global Telecom .

Exchange data showed foreign investors remaining net buyers of stocks, as they have been since the currency float, though the net amount on Tuesday was small, only about $5 million.

Dubai’s main index edged down 0.2 percent as DXB Entertainments added 2.7 percent after MSCI upgraded the stock to its United Arab Emirates standard index, effective at the close on Nov. 30.

Builder Arabtec tumbled 4.7 percent after MSCI downgraded it to its small cap index, while Dubai Financial Market fell in early trade but closed flat after it was deleted from the standard index.

Abu Dhabi’s main index edged down 0.1 percent to 4,181 points, holding technical support at its May low of 4,175 points.

Qatar’s index dropped 0.7 percent as Vodafone Qatar , the most heavily traded stock, slid 4.1 percent to 9.74 riyals after MSCI downgraded the stock to its small cap index. The stock tested but held technical support at its January low of 9.70 riyals.

Qatar First Bank soared its 10 percent daily limit in heavy trade after MSCI added it to its small cap index. The stock posted its biggest volume since the day after it listed in April.

 

Egypt’s SODIC to raise housing prices 20-30 pct on pound float

 

(REUTERS): Egyptian developer SODIC will raise prices on residential units by 20-30 percent on Tuesday in the wake of the central bank’s floatation of the pound on Nov. 3, Chief Executive Maged Sherif said.

Egypt’s third-largest listed real estate developer has also decided to delay three new projects to the first half of 2017 from the fourth quarter of this year, he said.

Egypt removed its peg of 8.8 pounds per dollar and floated the pound in a surprise move aimed at overhauling its dollar-starved economy and unlocking foreign investments.

The pound was trading at around 15.5 to the dollar on Tuesday.

“We took the decision to raise prices last Thursday after the flotation of the pound,” Sherif said, adding that the decision to delay three of their projects to next year came as the company had already achieved this year’s sales targets and to take into account the flotation of the pound.

 

The firm’s contracted sales for the first nine months reached 3.3 billion Egyptian pounds ($216.39 million) and it expects to reach a target of 4.9 billion pounds this year, Sherif said.

 

SODIC is planning a new joint project with Heliopolis Housing in the second or third quarter of next year and investments on the Red Sea within months, Sherif said.

The company is also looking for new opportunities in the North Coast on the Mediterranean.

 

Egypt issues 688 mln euro in T-bills, average yield 2.3 pct -c.bank

(Reuters) – Egypt’s central bank said on Monday it had sold 688 million euros ($738 million) in euro-denominated 1-year treasury bills at an average yield of 2.3 percent.

The minimum yield was 2.28 percent and the maximum yield was 2.3 percent.

($1 = 0.9318 euros)

 

Amendments to Protection of Competition Act to be completed by end of Nov.: official

The amendments to the Protection of Competition Act will be finished by the end of November, per which processes of mergers and acquisitions in the market and monopoly will be prevented, Yum7 reported legal advisor of the Egyptian Competition Authority (ECA) Ahmed Hesham on Tuesday.

“There is a need to impose restrictions on acquisition processes,” said member of board of directors in the ECA Hesham Ragab.

Before floating the Egyptian pound against the U.S. dollar, many merchants monopolized many goods, including sugar, amid very high increase of the prices.

 

AFREXIMBANK talks investments in Suez Canal Industrial Zone

A delegation from the African Export–Import Bank (AFREXIMBANK) met with chairperson of the Industrial Zone of the Suez Canal on Monday, Youm7 reported.

Both sides have discussed the bilateral relations and the future projects to get benefit from the $1 billion in grant provided by the AFREXIMBANK for the African continent.

 

India’s Welspun to closely monitor its Egyptian cotton business

(Reuters) Home textiles manufacturer Welspun India on Tuesday said it has initiated steps to closely monitor and control its Egyptian cotton business, which had come under a cloud early this year over quality issues.

“…the company is moving towards producing all the Egyptian cotton products in-house i.e., from procuring cotton to the finished product,” the company said in a statement.

The steps to be initiated include deployment of a dedicated resource in Egypt for sourcing of Egyptian cotton, increasing third party assurances such as Gold Seal from Cotton Egypt Association, vendor audit and DNA tests, it said.

Welspun India found itself in a spot in August when U.S. retailer Target Corp accused the company of selling cheaper sheets as premium Egyptian cotton for two years, damaging the company’s reputation and hurting India’s image in quality control.

The Egyptian cotton imbroglio hit the company hard and led to a net loss in the quarter ended Sept. 30 from an otherwise healthy profit last year.

The company posted a consolidated net loss of 1.48 billion rupees ($21.87 million) for July-Sept as against a profit of 1.79 billion rupees a year earlier. ($1 = 67.6829 Indian rupees).

 

FEI holds meeting Wednesday to talk negative impact of pound devaluation

Federation of the Egyptian Industries (FEI) will hold a meeting on Wednesday to discuss the impacts of the devaluation of the Egyptian pound on the industries fields, Youm7 reported on Tuesday.

The meeting is the second after floating the pound price; in the first meeting, the federation has decided that the FEI’s Chamber of Industry should put regulations in a way to avoid any negative impacts.

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