Cement stocks fall as correction hits Cairo stock market

The Egyptian bourse hit the high on Tuesday on the back of investor interest in the cement stocks, which they expected to rise when the companies announce positive results.

The benchmark Hermes index ended down 260.07 points or 1.6 per cent at 16,250.10 points. The broader CIBC index shed 1.29 points, or 1.3 per cent, to close at 96.56 points.

“This is a case of profit taking after the recent gains,” said Dynamic Securities’ Yasser Hassanein.

“Cements took a bit of a battering but that’s normal after their recent rallies,” said another trader.

Both National Cement and Tourah Cement fell five per cent, the maximum allowed, during the day’s trade.

National Cement last traded down 0.75 Egyptian pounds ($0.12) to 14.27 pounds and officially closed at 14.44 pounds. Tourah Cement last traded down 3.41 pounds at 64.80 pounds and officially closed at 65.07.

The traders also said Media Production City tumbled rapidly after breaking through a support level of around 14 pounds as the market grew increasingly frustrated at the lack of news concerning the firm’s plans to list in Dubai.

Media Production City last traded down 0.91 pounds, or 6.6 per cent, at 12.90 pounds and officially closed at 13.09 pounds.

Meanwhile, the median overnight interbank rate on the Egyptian pound slipped to six per cent yesterday from 6-1/2 per cent on Wednesday as brokers awaited the result of a central bank reverse repo auction.

The brokers said the market remained awash with funds and they did not expect the one billion pound ($161 million) CBEZ reverse repo auction to have a significant impact on rates.

“There’s lots of liquidity in the market and we are waiting for the result of today’s auction so there is no big change in the rates,” one broker said.

Four out of the nine banks contacted by Reuters had dealt overnight money at rates between four and 6-1/2 per cent, compared to rates of between 4-1/2 and 7-1/2 per cent in the previous session.

Two banks traded one-week money, both at seven per cent, versus a range of six and 9-3/4 per cent on Wednesday.

The overnight CAIBOR rate fell to 9.1662 per cent from 9.3095 per cent on Wednesday. The one-week CAIBOR rate dropped to 9.8929 per cent from 10.0119 in the previous session.