CAIRO: Egypt’s main index declined a second day on profit taking, retreating after a rally which has pushed it up by more than 40 percent since the beginning of the year, traders said.
Orascom Telecom Media Technology (OTMT) slid 9.5 percent, its first drop since it began trading on the exchange on Jan. 22.
Investors have been buying shares since the beginning of the year in the belief that Egypt has seen the worst of its political and economic turmoil since the fall of Hosni Mubarak one year ago.
Some traders said the declines of the last two sessions are merely a pause ahead of an expected infusion of cash when France Telecom completes its purchase of Mobinil shares in a deal worth nearly $2 billion. The deal is expected to take about two months to complete.
"The rally did not end here. We still have room to go up once this profit taking ends," said Omar Ascar at Cairo Capital Securities. "Mobinil and OTMT will provide further liquidity in the market as soon as the deal goes through."
Mobinil leapt 10 percent to LE 166.83, although very few shares change hands. It is the third day the stock has traded up by the maximum allowed under exchange rules since France Telecom said it would buy most of the company’s shares at LE 202 each.
"I think tomorrow will be the last day for Mobinil to trade at limit up, as the upside will not be worth the wait," Ascar said.
OTMT, which will earn $1 billion from the France Telecom purchase of its Mobinil stake, had been climbing for over a week on speculation a deal was about to be announced.
The index declined 1.2 percent to 5,003 points.
Among blue-chips, Telecom Egypt tumbled 5.7 percent, Citadel Capital 4.3 percent and EFG-Hermes 3.2 percent.
