Market Report: Egypt's OCI falls, index follows

Egyptian stocks slipped back into the red Tuesday as high-cap firms failed to sustain their early-session promise fuelled by global optimism despite a partial revival in trading volume after recent near-decade lows.

The EGX30 benchmark peaked at almost 2 per cent after the first quarter of the four-hour session but tumbled thereafter, closing the day down 1.33 per cent at 4,247 points, partly reversing Monday's gains. The broader EGX70 did worse yet, falling 3.33 per cent.

"People were optimistic after yesterday's gains on global markets but the early acquisitions for high-caps didn't last," said Nael Sedqy, an equity trader at Cairo-based Naeem Holding.

From 182 listed firms, 27 gained and 144 declined, with all market sectors except telecoms either falling or remaining stagnant.

Market turnover was LE342.2 million, its highest in days, with LE26.7 million of it concentrated in Orascom Construction Industries (OCI).

The performance of OCI, Egypt's largest listed firm, effectively dictated the market's fate, as initially bullish foreign investors changed tack and their shift hobbled the wider index.

Early on Tuesday, high-end property developer Palm Hills said OCI had won a development contract for its LE554 million Village Gardens Katameya project on the outskirts of Cairo. The news prompted a surge in foreign buys that was promptly capped by a 75 minute freeze on OCI trade.

"By the time it reopened, selling pressures had built, especially on foreign investors," said Sedqy, citing fears over government plans to shake up energy subsidy schemes that currently benefit key industrial players.