While Egypt's stock market is up overall, it has so far underperformed other Arab markets. At exchanges in Dubai and Abu Dhabi in the United Arab Emirates, for example, indices were up 18.5 percent and 14 percent respectively as of Feb. 21, while the EGX 30 rose by just 2.7 percent. Still, advances outnumbered declines, albeit by a low ratio of two to one. Market performance will likely continue to be lukewarm, with low trading volumes dragged down by an unclear political outlook and the absence of a coherent, integrated economic plan.

Investors have been changing positions within a tight trading range, with small-cap stocks mostly leading the pack. For instance, Canal Shipping Agencies shares jumped 34 percent to LE 12.42, while Ezz Ceramics increased 26.2 percent to LE 3.52. Orascom Telecom Media & Technology Holding (OTMT) stock was also up 14.3 percent to LE 0.64 after the firm said it would extend its Lebanon contract for another month. France Telecom (FT) has yet to exercise its call option on OTMT's 5 percent stake in Mobinil, which slipped 1.4 percent to LE 139.01. Meanwhile, Telecom Egypt (TE) firmed up 1 percent to LE 14.7 on reports indicating that Egyptian telecom regulatory officials are still discussing the legal status of TE's 45 percent stake in Vodafone Egypt once TE acquires an integrated telecom license.

Defensive stocks fared well with Delta Sugar shares up 13.5 percent to LE 12.95 and continued advances for Juhayna Food Industries, whose stock was up 11.2 percent at LE 8.72.

Despite CBE's approval of the NSGB and BNP Paribas deals, banking stocks showed a mixed performance. Housing & Development Bank shares jumped 16.8 percent to LE 17.03 and Commercial International Bank (CIB) stock dropped 4.5 percent to LE 34.97. CIB recently posted net earnings of LE 2.2 billion, up 38 percent year-on-year, thanks to 46 percent higher net interest income and 24 percent higher non-interest income and despite 90 percent higher provisions. Non-performing loans at Egypt's largest private-sector bank stood at 3.6 percent and had a healthy 120 percent coverage ratio.

Despite a weakening Egyptian pound, U.S. dollar-denominated stocks were down. Maridive & Oil Services slipped 1.7 percent to $1.15, while Egypt Kuwait Holding Co. eased 0.8 percent to $1.28. Other underperformers included Naeem Holding (down 6.1 percent to $0.31) and Arafa Holding (down 4.3 percent to $0.22).

Investors will continue to eye the pound's performance vis-à-vis foreign currencies. With the Central Bank of Egypt reducing the amounts of U.S. dollars it makes available in its weekly auctions, it's anyone's guess at what level the Egyptian currency will find a floor. Investors in general and foreign ones in particular are likely to remain cautious.

Amer Group
With Egyptian tourism taking a hit, real estate developer Amer Group, which specializes in family-friendly resorts, has relied on growth in other Arab countries, signing agreements to develop Porto Agadir on Morocco's Atlantic coast and a new Porto project on the Dead Sea in Jordan. After paying a cash dividend of LE 0.09 per share in December 2012, the stock has been trading between LE 0.59 and LE 0.69. In the period from mid-January to mid-February, a total of 80 million shares worth LE 50 million of company stock was traded, ending down 1.6 percent at LE 0.63.

© Business Monthly 2013