Egypt index up, but Egyptian Resorts down

Egypt's benchmark index rises 0.3 per cent for the second day on optimism the detention of former President Hosni Mubarak in a graft probe has won the country's military rulers respite from protests. But news that a land sale deal to real estate firm Egyptian Resorts has been scrapped weighs on volumes. Traders say the news will cause foreigners to dump shares in Egyptian property firms for fear of copycat cases. Shares in Egyptian Resorts stumble 9.6 per cent, posting the biggest percentage loss on the main index.

Egyptian Resorts said the tourism development authority had retracted its approval for selling a land plot allocated to the company's Sahl Hasheesh resort on the Red Sea. The firm said it would challenge the decision. "This news is extremely negative, which will lead to flight of foreign investment outside of Egypt and will in turn negatively impact the stock market," says Hashem Ghoneim, vice chairman of Pyramids Capital. Shares in Citadel Captial sink 9.2 per cent after media reports had said Chairman Ahmed Heikal was banned from travel, unnerving investors. The company denied the news on Thursday. Index heavyweights, Orascom Telecom and Orascom Construction Industries, and other telecom stocks gain mainly boosted by Mubarak's 15-day detention, traders say. Orascom Construction rises 0.7 per cent and Orascom Telecom advances 0.4 per cent. Mobinil gains 2.4 per cent, and landline monopoly Telecom Egypt rises 1 per cent.