Cairo (APD) - A profit-taking spree in the newly-traded shares of Egypt's fixed-line provider Telecom Egypt (TE) pulled down Egypt's bourse by the end of Thursday's trading session, analysts said.
Egypt's benchmark Hermes Index dropped almost 1% to close Thursday at 52,416.720 points. Shares in TE dropped 3.26% to last trade at LE 21.38 on its second day of trading, recording LE 457 million in turnover.
"Investors grasped the opportunity to sell today after the shares soared in its first trading session on Wednesday," explained Walaa Hazem, an associate at Cairo-based HC Securities.
On Thursday, shares in TE recorded a high of LE 22.79 during the trading session. "The stock's opening price on the first day was LE 15.15 per share, so when they sold today it was still a good profit to make," Hazem said. "The huge demand and the rush for TE shares that we witnessed Wednesday boosted the share's price but prices are going down to their fair value," he added.
In its research note issued end of November, HC Securities has set the target price for TE shares at LE 17.5 per share.
TE shares jumped as much as 62% in their trading debut on Wednesday to last trade at LE 22, beating analysts' expectations that the shares would soar only 15% in the first trading session.
Transactions in TE dominated almost 71% of Wednesday's total transactions as TE's turnover reached LE 1.25 billion out of the market's total turnover of LE 1.75 billion.
Mahmoud Mohieddin, Egypt's minister of investments, told reporters Wednesday that selling stakes in state-owned enterprises generated revenues of LE 9.1 billion during July-December period, out of which LE 5.1 billion were generated by the 20% IPO in TE. [FC]
By Eman Wahby, APD Staff Writer in Cairo
APD (Arab Press Digest) 2005
