Heavy foreign selling hits Egypt stocks

MARKETS FALL: Egyptian indexes fell on heavy foreign selling. (Getty Images)

Major Egyptian stock indexes fell on Wednesday for the second session in a row on heavy foreign selling of big cap stocks and global market volatility, traders said.

Market heavyweights Orascom Telecom (OT) and Orascom Construction Industries (OCI) both declined under heavy selling pressure. OT last traded 4.66 percent lower at 44.79 pounds ($8.27), while OCI lost 2.03 percent to 357.90 pounds.

The two shares together constitute around 50 percent of the benchmark CASE 30 index, which closed 1.66 percent lower at 8,261.92 points. The Hermes index lost 1.34 percent to 722.78 points, while the broader CIBC index rose 0.36 percent to 424.09 points.

"OT's results were below expectations, plus there's a lot of volatility internationally, and foreigners were net sellers by about 104 million Egyptian pounds today, and their selling was focused on big caps," said Mohamed Kotb of Jazira Asset Management.

Orascom Telecom, the biggest Arab mobile phone operator by subscribers, reported lower-than-expected net income in the second quarter as growth in Pakistan and Bangladesh slowed and financing costs rose, hitting its shares.

OT was also hit by a report from investment bank Goldman Saches which downgraded the Cairo-based group to "neutral" from "buy" and cut the price target on the stock to 65 Egyptian pounds from 100 pounds.

"Global markets were hit badly yesterday. Egypt reacted to this global slowdown, but our declines were a bit softer than theirs," said Karim Hosny of Pharos Securities.

Commercial International Bank (CIB) saw its shares lose 1.12 percent to 46.90 pounds.

Real estate developer Talaat Moustafa's shares lost 1.54 percent to last trade at 7.01 pounds per share even after the firm said its assets were worth 34.5 billion Egyptian pounds on June 30, 74 percent on the valuation a year earlier. (Reuters)

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