Tuesday’s trading session began with a minute of silence for the 25 conscripts killed in Rafah on Monday. But the main EGX 30 index ended the day up 1 percent, to reach 5,386 points.
State media attributed the rise to improved investor confidence due to the arrest of Mohamed Badie, Supreme Guide of the Muslim Brotherhood.
However, a more technical reading showed that Egyptian investors bought into undervalued stocks after the market had plunged for several days in a row since the violent dispersal of sit-ins by supporters of deposed President Mohamed Morsi, which left hundreds dead.
Stocks in the telecom, banks, financial services, and real estate sectors saw the highest surges, ranging from 15-18 percent.
Egyptian investors were net buyers at a value of LE 79.2 million — with individual investors outshining institutions — while Arab and foreign investors mostly bought out of the market, unconvinced that the arrests or relative quiet on the streets compared to previous days were signs of renewed stability.
Meanwhile, the investment authority and ministry said that some of the biggest multinational companies present in Egypt have affirmed their commitment to continuing business operations in the country.
According to state news agency MENA, the investment authority named Electrostar, General Motors, Toyota and Shell in particular — three companies that the Financial Times said last week were halting operations due to the ensuing chaos and violence in Egypt.
Officials denied that companies like these were mulling halting operations altogether and closing their factories in Egypt, refuting earlier reports in newspapers and agencies. Company officials expressed their confidence in Egypt’s economic recovery once political stability returns to the country, the investment authority told MENA.
The MENA article mentions the same companies refuting reports of their closures, even though the FT article contained news of how their business operations were affected by the immediate aftermath of the violence. The MENA report does say that some companies closed their offices and stopped production at their factories for one or two days, as reported earlier.
Sweden’s Electrostar, the second largest home appliance manufacturer in the world, said it has resumed operations after a two-day stoppage after the sit-ins dispersal on August 14 to ensure the safety of its employees. The company employees about 6,000 workers in its Egyptian factories.
General Motors, meanwhile, denied that it had halted production at its 6th of October factory and asserted that it is operating at full capacity.
In a statement to the investment authority, MENA reported, GM affirmed its commitment to a previously announced expansion plan whereby the car manufacturer will add a new production line to its factory in 6th of October City this coming September, for a pick-up truck it will launch in the Egyptian market.
Japanese automaker Toyota said it only stopped production last Thursday in light of the violence that took place after the dispersals, adding that its production may be affected in the coming months due to the state of the auto industry.
Shell Egypt also said its offices here are operating normally and denied reports that it has closed.