In Week, Egypt Shares Gain EGP6.8bn as Constitution Referendum Begins

In a week that coincides with the start of Egyptian expatriates’ voting on a new constitution, Egyptian shares attained gains totaled EGP 6.8 billion.

The capital market reached EGP 435.642 billion last Thursday, compared to EGP 428.859 billion at the end of a week earlier.

Accordingly, the Egyptian Exchange’s benchmark index EGX 30 index surged by 2.4% this week, registering a surge of 163.74 points, ending Thursday’s transactions at 6975.04 points compared to 6811.3 points at the end of a week earlier.

The main gauge index registered its highest point on Thursday closing at 6975.04 points, where its lowest point recorded on Monday at 6801.33 points.

Egypt’s bourse halted its trading activities for one day on Tuesday, January 7, 2013 on the occasion of the Egyptian Christians’ Christmas.

Meanwhile, the mid- and small-cap index, the EGX70  inched up by 1.6% closing at 557.58 points during Thursday’s session, compared to 548.63 points at the end of a week earlier. The price index, EGX100 also soared by 4.4% concluding by 974.31 points during Thursday’s session, against 932.35 points at the end of a week earlier.

Turnovers & Traded Volumes:

Through the week, the trading volume has reached 1.059 million securities, compared to 626.1 million securities at the end of a week earlier. For the traded value, it hit EGP 3.211 billion against EGP 1.814 billion a week earlier.

Companies’ Weekly Performance Highlights:

EFG-Hermes Holding (HRHO.CA): EFG-Hermes Holding SAE jumped on a share buyback plan after Wednesday’s trades in the Egyptian investment bank were canceled on suspicion of insider trading.

On Thursday, the stock soared by the daily limit of 10 percent to 9.79 Egyptian pounds at the close in Cairo, the highest since February, after EFG-Hermes’s board approved a 1 billion-pound ($143 million) purchase of its own shares.

Yesterday’s transactions were annulled after the stock gained the most since July on volumes of 2.5 times the three-month daily average. The moves led the bourse to suspect an information leak, said an official who asked not to be identified because he isn’t authorized to speak on the matter. Investigations of insider trading are almost always settled out of court in Egypt, according to Wafik Dawood, director of institutional sales Mega Investments Securities, who spoke to Bloomberg on Thursday.

“An exceptional rally on exceptional volumes triggers a red flag for the bourse,” Cairo-based Dawood said by phone. “Usually insider trading is pretty hard to detect. In this case, the leakage was obvious.”

EFG-Hermes’s board approved returning 425 million pounds “immediately,” in the first phase of its buyback plan at 11.5 pounds a share, subject to regulatory approval. The second phase will be implemented in the second or third quarter, the bank said without giving further details. The Cairo-based firm said in May it will sell “non-core” assets and return cash to shareholders after a buyout deal by Qatar’s QInvest LLC collapsed.

The buyback is “very positive and very significant for the market as a whole,” Ahmed Abu Taleb, foreign institutions sales vice president at Cairo-based Pharos Securities, said by phone. “It shows you that there are still companies that want to invest in themselves and EFG-Hermes is a mirror for the market.”