Egypt Stocks Gain EGP9.3bn in Week on Moody’s Rating Upgrade

Big 5

In a week, Egypt’s stock Exchange (EGX) posted gains worth 9.3 billion Egyptian pounds (US$1.3bn) backed by international ratings agency Moody’s report that upgraded the country’s outlook to ‘Stable’ from ‘Negative’. The report signals Egypt’s struggling economy more hospitable to international investors.

Accordingly, the country’s main stock index, EGX30 surged 2.4% in a week, with an increase of 204 points, ending Thursday’s transactions at 8797 points, versus 8593 points at the end of a week earlier.

The main gauge index registered its highest point on Wednesday closing at 8811.88 points, whereas its lowest point recorded on Sunday at 8523.87 points.

In addition, the mid- and small-cap index, the EGX70 pushed up in a week by 3.5% closing at 592 points during Thursday’s session, compared to 572 points at the end of a week earlier. The price index, EGX100 also climbed by 2.6% concluding by 1077 points during Thursday’s session, against 1050 points at the end of a week earlier.

Furthermore, the market capitalization closed at EGP 496.046 billion last Thursday, compared to EGP 486.711 billion at the end of a week earlier.

Turnovers

Through the week, the trading volume hit around 880.5 securities, compared to 875.7 million securities at the end of a week earlier. For the traded value, it reached EGP 4.2 billion against EGP 4.1 billion a week earlier.

Investors’ Activity:

Local investors led the market activity all through the week with 80.79%, followed by foreign and Arab investors with 11.51% and 7.69%, respectively, after excluding the deals.

Foreign investors were the most active buyers during the week earning the value of EGP 152.14 million, after excluding the deals.

Arab investors were also to buy by value of EGP 21.35 million, after excluding the deals.

Moreover, institutions seized 53.40% of total trading through the week; while individuals attained 46.60%. Institutions were the most active buyers during the week earning the value of EGP 27.94 million, after excluding the deals.

Market Remarks

–         Egypt Bourse, Religious Endowments in ‘Advanced Talks’ to List Two Affiliates

The talks to enlist two new companies affiliated to the Egyptian Ministry of Religious Endowments (Awqaf), El-Hawamdia Contracting and Damanhur Carpet Company, in the country’s stock market are in ‘advanced stage’, said stock Exchange head Mohamed Omran on Sunday.

Omran said the Egyptian Exchange (EGX) approved several weeks ago the listing of two Awqaf-affiliated companies, but delayed the move after realising that some of these companies’ shareholders are involved in legal cases not settled yet.

Elsewhere, the top official announced that the EGX listing committee will discuss the current week the listing of the first ETFs company, adding that the actual listing will be carried out next week upon completing all documentation.
The company is expected to be added to EGX-listed companies this week. Beltone will issue the IPO prospectus after obtaining the approval of the Egyptian Financial Supervisory Authority (EFSA), the top official told state-owned news agency MENA.

–         Beltone Eyes EGP250mn from First ETFs in Egypt Bourse

Beltone Financial Holding is set to complete procedures of launching the first exchange-traded funds (ETFs) in the Egyptian Exchange (EGX) with a capital of EGP 5 million, and is seeking EGP 250 million from the launch, said a company official.
Osama Rashad, Investor Relations Manager at Beltone, told state-owned news agency MENA required documents are being prepared to issue the subscription prospectus after the approval of the Egyptian Financial Supervisory Authority (EFSA).
The issue was delayed from last June because some requirements were not fulfilled. Egypt’s stock exchange had granted Beltone the country’s first licence for exchange traded funds (ETF).
Beltone Financial was the first company to express interest in ETFs, which are listed investment funds.

–         Moody’s Changes Egypt’s Outlook to ‘Stable’ from ‘Negative’, Affirms Caa1 Rating

Moody’s investors service changed on Monday Egypt’s outloom to stable from negative and affirmed its Caa1 government bond rating.

The outlook change was driven by the stabilised political and security situation, the launch of government initiatives toward fiscal consolidation, signs of a growth recovery and an improvement in macroeconomic stability, and strong support from external donors, according to Moody’s.

Moody’s has today also affirmed the Aaa rating of Egypt’s backed global bond. Egypt’s B3 foreign-currency bond ceiling, Caa2 foreign-currency deposit ceiling and Ba3 local-currency country risk ceilings are unaffected by today’s rating affirmation.

The short-term country ceilings for foreign-currency bonds and deposits remain unaffected at Not-Prime (NP).

–         EGX Requests Financial Disclosure from Listed Companies

The Egyptian Stock Exchange (EGX) has kicked off the week’s trading by requesting financial and operations information for listed companies. The request comes after companies experienced a series of losses last week which saw the market lose some EGP 37.9 billion.

EGX said that companies need to disclose any activity that led to recent movements in the price of stocks.

“The management aims by this action to give a clear and objective picture of the actual situation of the listed companies and their updated financial indicators after the downturn that hit the international stock exchanges over the past week,” EGX said in its official statement.

EGX mentioned that “international reports have warned off the possibility of slowdown in global economic growth”. It added that this slowdown drove the stock market to a downward trend.

“This downtrend affected the Arab markets as well as the Egyptian Exchange,” the statement read.

–         Chairman: Egyptian Bourse Says to Approve 10 Listings by Year-end

The Egyptian stock Exchange (EGX) expects to have approved the listings of 10 companies by the end of this year as confidence in the local economy grows, the exchange’s chairman Mohamed Omran said last Tuesday.

The stock market was hit hard by the political and economic instability which followed the overthrow of Hosni Mubarak in early 2011, but many investors now feel stability is returning. The main stock index and trading volumes have both rebounded above the levels seen in 2010.

Arabian Cement Co listed in Cairo in May this year after raising $110 million in its initial public offer, the first major one on the bourse for about three years.

Omran, in an interview for the Reuters Middle East Investment Summit, said the exchange had approved the listing of four companies so far this year and expected that number to rise to ten by the end of 2014.

Growing activity in the stock market “is a very positive indicator that the Egyptian economy has started to recover,” he said.

“Companies are able to acquire, expand and invest to a greater extent in order to achieve profitability and growth. This will reflect on per-share earnings and in turn on prices in the market. The exchange and the economy can never be separated.”

He added: “We have an economy that hungers for investments. The major economic projects that Egypt is currently working on will lift the dust off its economy.”

–         Egypt Bourse Accepts Beltone’s Membership as Market Maker

The membership committee of Egypt stock Exchange (EGX) issued a decision on Wednesday accepting Beltone Financial Holding as a market maker, pursuant to the membership rules issued by virtue of the EGX Chairman’s decision No. 156/2014, dated 11/05/2014.
The Egyptian Financial Supervisory Authority (EFSA) had licensed Beltone to undertake the ‘market maker’ activities, as per provisions of the capital market law and its executive bylaw.

A market maker is a broker-dealer firm that accepts the risk of holding a certain number of shares of a particular security in order to facilitate trading in that security. Each market maker competes for customer order flow by displaying buy and sell quotations for a guaranteed number of shares. Once an order is received, the market maker immediately sells from its own inventory or seeks an offsetting order. This process takes place in mere seconds.

–         Egypt Bourse Decides to Reduce Listing Documents by Half

Egyptian stock exchange (EGX) will reduce the number of documents the bourse requires from large corporations or small and medium enterprises by half, the exchange chairman Mohamed Omran announced on Wednesday.

The decision will attract more companies from different sectors to list in the Egyptian stock exchange which will provide different alternatives to potential investors and will reflect positively on the capital market.

Documents required to list in the stock exchange will be reduced to 12 documents instead of 24.

–         Nile Sugar’s Shares Active on Bourse Database on October 26 – EGX

Egyptian stock Exchange (EGX)’s Listing Committee approved on Thursday the listing of Nile Sugar, a private beet-based sugar mill owned by the Sawiris family. The shares will be listed on the bourse database on October 26.

Nile Sugar will have an issued capital of EGP 904.209 million distributed on 904.209 million shares with an EGP 1 nominal value per share.

According to the company’s website, Nile Sugar was set up in 2007 to build, operate and manage a beet root sugar extraction plant and refinery. The plant is located in Nubariyah, along the Alexandria desert road, 50 kilometers from the Port of Alexandria. The sponsors of Nile Sugar are Onsi Sawiris & Naguib Sawiris. Project’s investment is EGP 1.63 billion.

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