Beirut (APD) - The CASE 30 Index of the Cairo and Alexandria Stock Exchanges (CASE) closed Thursday at 6,084.95 points, 0.77% up from its previous close on Wednesday.
Although the market concluded the week on a positive note, share values had generally suffered over the past five days and the entire month to date.
On Monday, the CASE 30 had plunged to 5,965.96 points, its lowest value since the notorious Black Tuesday of the regional bourses on March 14 when the index had nose-dived to 5,892.73.
Since May 2, the index had lost all the ground it had gained in three weeks of recovery following March 14 and in another positive phase in the second half of April.
Overall, the decline drove the CASE 30 from a high of 6,775.25 points on May 2 down by 10.19% until Thursday. The trend left analysts concerned.
"This downturn comes at a time leading companies are posting excellent interim financial results," Tarek Khayyat, financial analyst at the Egyptian financial research firm Prime Securities told APD.
"This idiosyncratic behavior of the market cannot be explained by fundamental analysis of the market any more. The only explanation that we can give is through technical analysis which sees a long-term downtrend that could continue for a period of two years. This implies a long-term sell signal," Khayyat said.
Fundamental analysis is based mainly on the financial performance of leading companies in the market.
"Standalone net profits of Egyptian Financial Group Hermes Holding Company (EFG-HERMES) skyrocketed by 745% to LE 33.05 million in Q1 2006 compared with LE 3.91 million in Q1 2005 while its consolidated net profits jumped by 392% to LE 208.5 million for the same period," Khayyat added.
The Dubai-based al-Bayan daily reported on Friday that 20 companies listed on CASE had achieved substantial growth in their interim net profits.
Among the good performers were important telecoms companies, Telecom Egypt (TE) and Egyptian Company for Mobile Services (MobiNil). TE achieved a growth of 43.7% in its standalone net profits which reached LE 536.2 million in Q1 2006 while first quarter net profits of MobiNil increased by 21.3% to LE 310.5 million.
Companies with exceptional year-on-year growth in their first quarter results included Delta Industrial Company (IDEAL), which reported a 90% profits surge to LE 51.4 million, and Olympic Group for Financial Investments whose net profits skyrocketed by 94.1% to LE 46.8 million.
In an example for longer term performance, net profits of Abu Qir Fertilizers Company climbed by 21.9% to LE 474.83 million in the nine months since the start of the fiscal year on July 1, 2005.
Factors with a possible market impact this month include the fact that foreigners are withdrawing from the market and Arab investors are declining to buy, Khayyat said.
The crisis over allegations of forgery in Egyptian presidential elections also played a role by creating a phobia in the market especially among small investors, he told APD. [TS]
By Shikrallah Nakhoul, APD Staff Writer in Beirut
© APD (Arab Press Digest) 2006
