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Junkie
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Quote:
Originally Posted by roachboy
nothing makes any sense without an idea of the complexity of recent history. there is no separation between economic and political spaces; each impacts upon the other.
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Here is how you or anyone can make sense of what is happening in Egypt, it is like a daily score sheet. Watch the flow of capital in capital markets.
Quote:
The Egyptian Exchange, shut since Jan. 27 amid anti-government protests, will stay closed into next week and honor transactions that sent the EGX 100 Index tumbling on the last trading day, Al Arabiya television said.
Exchange officials, confronted by investors angry about stock losses, said yesterday they would weigh annulling trades that led the EGX 100 down 14 percent, the biggest one-day drop in more than two years. Chairman Khaled Seyam ruled out such a move, saying it would be illegal, Al Arabiya reported today.
The Market Vectors Egypt Index ETF in the U.S. rose since the Cairo exchange closed as President Hosni Mubarak bowed to protesters seeking his resignation last week and ceded power to the military after 30 years in office. Egyptian shares in London have since reversed earlier gains. Seyam and Hisham Turk, a spokesman for the bourse, didn’t answer calls and text messages to their mobile phones today.
“There are people waiting to invest as soon as the market opens,” Sven Richter, managing director and head of frontier markets at Renaissance Asset Managers in London, which oversees more than $2 billion, including investments in Egypt, said in an interview yesterday. “I would prefer those trades stayed in place and that they opened the stock exchange as soon as possible.”
Individual equity holders, who accounted for 48 percent of all trading on the Egyptian Exchange last year, jammed into a meeting in Cairo with bourse Vice Chairman Mohamed Farid Saleh yesterday, demanding changes in regulation and management before the market resumes operations. The exchange has delayed opening at least three times. Al Arabiya reported today it won’t resume operations as planned on Feb. 20.
Bill Auction
Egypt’s central bank today moved the deadline for some of its Treasury bill auctions as banks are closed.
The government will auction 5.5 billion Egyptian pounds ($936 million) in 182- and 364-day bills on Feb. 21, according to the Ministry of Finance’s website. The central bank had previously said that the auctions for these bills would be carried out tomorrow. Auctions of 91- and 273-day bills will be held as scheduled on Feb. 20 in a bid to raise 4.5 billion pounds, the ministry said.
The Egyptian Exchange had outlined rules yesterday for opening on Feb. 20. The bourse planned to halt trading for 30 minutes should the EGX 100 Index, which includes all stocks in the benchmark EGX 30 Index, rise or fall more than 5 percent, according to Turk. The exchange will shut for the day if the gauge moves more than 10 percent, he said. The EGX 100 closed at an eight-month low of 884.79 on Jan. 27 on concern protests against Mubarak’s rule would cripple economic growth.
Investor Demands
James Angel, associate professor of finance at McDonough School of Business at Georgetown University in Washington, said he’s never heard of an exchange invalidating three-week-old trades.
U.S. exchanges canceled about 20,800 trades on May 6, when a sale of futures contracts set off a chain of selling that bled into stocks and sent the Dow Jones Industrial Average down as much as 9.2 percent, according to an account of the day by federal regulators. The annulled transactions amount to a fraction of the volume on a typical trading day. Shares of Citigroup Inc., one of the most-traded securities on U.S. bourses, changed hands at least 177,000 times yesterday, data compiled by Bloomberg show.
Ezz Steel
At yesterday’s meeting in Cairo, investors argued with exchange officials, some demanding the trading suspension continue and others asking that the market open conditionally. They sought the suspension of trading of 13 companies associated with Mubarak’s regime, including Cairo-based Ezz Steel, Egypt’s biggest producer of the metal, and suggested more regulation to prevent insider trading and improve disclosure. They also called for new management at the bourse and securities regulator, the Egyptian Financial Services Authority.
In addition to Ezz Steel, investors are demanding the suspension of Ezz Aldekhela Steel Co. and Ezz Ceramics & Porcelain Tiles Co., all of which are affiliated with Ahmed Ezz, a member of Mubarak’s former ruling party who is under investigation for alleged corruption by the country’s public prosecutor.
“The bourse is a black box that still hasn’t been opened,” said Ashraf Khairy, who added he holds 2.4 million Egyptian pounds in stocks and is 400,000 pounds in debt. “We cannot trust those who presided over the corruption to implement reforms.”
GDRs Drop
The Market Vectors Egypt Index ETF, a U.S.-listed exchange- traded fund that holds Egyptian shares, has climbed 13 percent since Jan. 27. The fund, which changes hands throughout the day like a stock, rose 0.5 percent today.
Global depositary receipts of Orascom Construction Industries, the Egypt’s biggest publicly traded builder, lost 5 percent to $37.52 at 2:46 p.m. in London and are down 0.3 percent since Jan. 27. GDRs of Commercial International Bank Egypt SAE, the country’s biggest publicly traded bank, slid 4.6 percent to $6, bringing the loss since Jan. 27 to 4.2 percent. EFG-Hermes Holding SAE, the nation’s biggest publicly traded investment bank, fell 6.7 percent to $8.30 and is down 7.6 percent since the Egyptian bourse closed.
The yield on Egypt’s benchmark dollar bonds due in 2020 was little changed at 6.57 percent, according to data compiled by Bloomberg. Five-year credit-default swaps on the nation’s debt rose 8 basis points to 345 from the London close. That is down from 432.48 on Jan. 28, the day after the exchange closed. The contracts pay the buyer face value in exchange for the underlying securities or the cash equivalent should a government or company fail to adhere to its debt agreements.
EFG-Hermes Holding reduced its recommendation on six Egyptian companies yesterday, including Ezz Steel, on concern earnings may be hurt by the political changes.
‘Hurting Investors’
Ezz, whose shares tumbled 19 percent to 15.93 pounds in the week ended Jan. 27, was lowered to “sell” at EFG with a 12- month price estimate of 13.9 pounds and Cairo-based Egyptian Resorts Co., a developer, was cut to “sell” with a price estimate of 1.4 pounds. Ghabbour Auto, Credit Agricole Egypt SAE, National Societe Generale Bank SAE and Paints & Chemical Industry Co. also had their recommendations reduced.
“The suspension is hurting investors more than it’s helping them, the bourse needs to face the reopening problem in order to get on with business,” said Mohsin Adel, managing director at Cairo-based Pioneer Funds, where he helps oversee 500 million Egyptian pounds.
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Egypt Stock Exchange Rules Out Annulling Transactions, Will Remain Closed - Bloomberg
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"Democracy is two wolves and a sheep voting on lunch."
"It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion."
"If you live among wolves you have to act like one."
"A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers."
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