CAIRO: The start of the week saw stocks rising with increased activity on the Case 30 as Arab investors pushed the benchmark up 2.3 percent, highlighting their interest in Egypt’s booming economy.
Turnover reached LE 1.19 billion, recording 9,395 points at closing time. Data showed that Arab investors were net buyers by a margin of LE 67.6 million, while Egyptian and non-Arab foreigners were net sellers. Institutions were active, comprising 33.1 percent of transactions, while Arab individuals recorded 13.7 percent.
“Arab interest in Egypt’s stock market has been noticeable since the economy as a whole started to boom. Arabs, as well as foreigners, are seeing the potential in the country’s economy, Dalia Mostafa of Delta Securities told Daily News Egypt.
Analysts say that the increased activity on the Case was triggered by a boom in Foreign Direct Investment (FDI), which has occurred in the context of “improved economic management and renewed confidence in investor prospects.
All this has been beneficial to the economy’s growth rate, which reached a record 7.1 percent at the end of 2006/2007.
“We are also finding increased Arab investments and activities that are encouraging [other] Arab institutions and individuals to invest in the country, Mostafa said.
Arab institutions have invaded the real-estate and banking domains in Egypt, “it is only normal that Arabs would want to back their institutions by buying and selling the stock in the foreign countries they invest in.
CASE noted an influx of cash into the market when Al Watany Bank of Egypt sold its shares to the National Bank of Kuwait (NBK). NBK bought 93.7 percent of Al Watany at LE 77.01 a share – a transaction worth a total of LE 950 million.
Egyptians and foreigners are also showing more interest in and awareness of the stock market, a factor that cannot be neglected.
“Foreign investors are becoming unusually active because they know now that the dollar is depreciating against the pound, which gives Egypt an economic boost, Hesham Alaa of El-Nour Securities said.
The dollar is now worth LE 5.5, decreasing nearly LE 0.3 in the past six months.
News of expansions in the telecom, real-estate and cement sectors has recently spurred buying and selling activities. “These sectors are always active and people are seeing the potential in investing in them, he said.
Most Egyptian companies are realizing the importance of offering their shares on the Case. Talaat Mostafa Group Holding Company (TMG), the leading Egyptian community real estate developer, announced its intention to proceed with an Initial Public Offering and listing of these shares on the Case.
“The culture has changed, Egyptians aren’t just looking for a quick profit from the stock market, they have learned how to invest, Alaa said.
With the growing number of security and stock management firms giving investors professional advice, the stock market has definitely been revived.
