Cairo's stock exchange dusted itself off yesterday as the bourse reverted to normal trading hours for the first time since it closed after street protests - and retail buyers flocked in.
The stock market resumed its four-hour trading session after political uncertainty kept the market shut for almost two months. It officially reopened on March 23, but for only limited trading hours, and with frequent stops in trading because of high volatility.
The EGX 30 ended 1.7 per cent higher at 5,558.64 as the market adopted a positive stance.
Shares in most of the biggest capitalised companies, including Ezz Steel and Orascom Telecom, were among the most heavily traded stocks, rising 7.5 per cent and 2.3 per cent respectively.
Mostafa Abdel Aziz, the regional trading manager at Beltone Financial, said the index was still enjoying "interest and flows from the West, particularly from the US".
International institutions had been dominant buyers in the past 10 days of trading as investors scoured the market for defensive stocks that have low price-to-earnings (P/E) ratios, one method of determining how expensive a stock is in relation to its peers.
Among Egypt's biggest companies with the lowest P/E ratios, Telecom Egypt is trading at 8.94 times earnings and Elsewedy Electric, a cable maker, is trading at 9.12 times earnings. Talaat Mostafa Group (TMG) is trading at 9.48 times earnings.
But market players said the exchange was still experiencing only half of its average daily turnover.
"Today [was] a very weak session in terms of volumes and turnover but strong in terms of performance," said Mohamed Radwan, the head of equities at Pharos Securities in Cairo.
"Most of the euphoria has happened in the past 10 days."
But he said retail investors were gaining confidence and were picking up "laggards" including Ezz Steel, TMG, Palm Hills and Sodic.
All three jumped significantly during yesterday's session.
Foreign participation is now at 30 per cent, down from averages of between 55 and 60 per cent in the past 10 days.
Egypt's market, unlike most others in the Middle East, is listed on MSCI's emerging market index, which is tracked by fund managers internationally and directs foreign direct investment into the economy.
But Jahangir Aka, a senior executive officer at SEI Middle East, which has US$416 billion (Dh1.52 trillion) in assets under management, said volumes on the Egyptian market were still negligible compared with trading on much bigger stock markets in Japan and the US.
"If you look at the depth and trading volumes, the sample is small, so any activity can swing it wildly," Mr Aka said.
The EGX 100 shed 10 per cent of its value within seconds of opening yesterday.
halsayegh@thenational.ae
