EGX 30 Ends Above 5235 Pts, Market Awaits IMF Accord, OCI Tax Clues
The Egyptian Exchange (EGX) has pared its midday gains driven by the foreign selling pressures. The EGX has gains of EGP 833 by Tuesday’s closing session. The market is in full alert to the cash-strapped Egypt’s agreement with the International Monetary Fund over a long-awaited US$ 4.8 billion loan, besides the settlement agreement between Orascom Construction Industries and the country’s Tax Authority over EGP 14 billion tax claims.
The capital market has reached to EGP 357.603 billion during Tuesday’s closing session.
The EGX indices ended Tuesday in green notes, except for the mid- and small-cap index, the EGX70 which solely fell.
Egypt’s benchmark index EGX30 rose by 0.41% to close at 5236.8 p; while the EGX20, it also advanced by 0.20% to end at 6063.22 p.
Meanwhile, the mid- and small-cap index, the EGX70 dipped by 0.46% to conclude at 449.04 p. Price index EGX100 inched up by 0.49% to finish 749.55 p.
During closing, the trading volume hit 58.689 million securities, less than Monday’s 83.080 million securities, representing a decline of 24.391 thousand securities. For the traded value, it reached EGP 234.938 million, exchanged through 13.500 thousand transactions.
This was after trading in 168 listed securities; 67 declined, 54 advanced; while 47 keeping their previous levels.
Egyptians and Arabs were net buyers seizing 75.06% and 6.29% respectively, of the total markets, with a net equity of EGP 8.096 million and EGP 9.695 million excluding the deals.
Meanwhile, the non-Arab foreigners were net sellers seizing 18.64% of the total markets, with a net equity of EGP 17.791 million, excluding the deals.
Egypt Sees IMF Loan Deal In May: Hisham Ramez
IMF is really concerned to support Egypt, the IMF chief Christine Lagarde affirmed to the Egyptian delegation attending the IMF-World Bank Annual Meetings in Washington.
The Governor of the Central Bank of Egypt (CBE) Hisham Ramez heads the delegation, which is comprised of the Minister of Finance El-Morsi El-Sayed Hegazy and the Minister of Planning and International Cooperation Ashraf Al Araby to attend the annual IMF-World Bank Annual Meetings in Washington.
The Egyptian government expects to reach an agreement with the IMF to secure the long-awaited US$ 4.8 billion loan next May after finalizing the economic reform plan, Hisham Ramez said.
On the sidelines of the meetings held with IMF, he revealed that Lagarde will issue a statement within hours to announce the details and conditions of the loan and the date of signing the deal.
EFG-Hermes: Egypt Will Not Get IMF Loan Before Q4/13
Cash-strapped Egypt will not obtain the International Monetary Fund’s long-awaited US$ 4.8 billion loan before the fourth quarter of 2013, EFG-Hermes Research said on Monday.
The delay in receiving IMF’s loan will add more pressures on the country’s domestic currency which is in fact going through a severe decline driven by the current economic woes, Hermes added.
In its recent research, EFG-Hermes Research further noted that to get the IMF’s financial support, Egypt has to adopt a number of austerity measures, highly controversial to citizens. That implies tax hikes and politically risky cuts in the generous system of state subsidies for fuel and food, including bread.
EFG-Hermes explained that the state of not reaching a final agreement between Egypt and the International lender during last week talks would later reflect more unrelenting pressures on the country’s economy.
“We see limited chances for an IMF deal in the short term, expecting it instead in Q4/13. To that end, we expect the EGP to come under renewed pressure towards mid-2013, if not earlier. The government has done little in implementing meaningful fiscal reforms thus far. The draft budget of FY2013/14 shows an unrealistic timeline for reforms, where the government expects to take a number of inflation-generating reform initiatives in less than eight months. We revise our economic forecasts for Egypt on page 13,” Hermes stated
OCI Tax Dispute; Hope Floats!
Orascom Construction Industries (OCIC.CA) announced that it has reached an advanced stage with Egyptian Tax Authority over the ongoing dispute about selling OCI assets to French Lafarge.
In a filling to the Egyptian Exchange (EGX), Orascom Construction Industries (OCIC.CA) announced on Tuesday that it has reached an advanced stage in its negotiations with the Egyptian Tax Authority to end the ongoing dispute over the sale of Orascom Building Materials to French Lafarge. OCI added that more details will be disclosed over the coming days.
Accordingly, the EGX management decided to resume trading on OCI’s stocks.
OCI’s shares rose the most in a month as Egypt’s biggest publicly traded company said tax negotiations with the government are at an “advanced” stage.
Shares advanced 0.7 percent to 236 Egyptian pounds at 1:40 p.m. in Cairo after earlier climbing 2.6 percent, the most since March 27. The company said it would provide more details on the discussions in the next few days. The stock led gains on the benchmark EGX 30 Index, which added 0.6 percent.
