Market Report: Egypt stocks drop over worries about political situation
Egyptian bourse drops 0.74 per cent as turnover continues to stand below LE100 million
Ahram Online, Thursday 5 Jan 2012
Egypt's stocks dropped on the last session of the week as politics and holidays continue to overshadow the troubled bourse.
Main benchmark EGX30 shed 0.74 per cent to close at 3,628 points. The index totals a 0.15 per cent increase one week into 2012. The broader EGX70 index also went down by 1.15 per cent.
"The market is acting adversely on the prospects of instability expected to follow the protests planned for the coming 25 January," said Mostafa Badra, capital market expert.
Several political groups have called for mass protests on 25 January, with some planning to call for the end of the military rule and others calling for bringing the presidential elections forward. Several observers expect the protests to turn into violent clashes, as occurred in November and December of last year when peaceful protests were attacked.
Such fears are reflected in the market's turnover, which stood at LE94 million ($15.6 million).
"We saw market turnover deteriorate over the past four or five months from an average of LE500 million to below LE100 million. I think there is a big possibility turnover will see further drops," Badra added.
Market turnover is also reported to be affected by the holidays season which is ongoing until Eastern Christmas on 7 January. Accordingly, the stock market will be shut down on Sunday 8 January.
Mobinil, Egypt's oldest mobile carrier, saw its stock price fall by 1.24 per cent to close at LE77.27 per share. On Thursday, Egyptian prosecutors sent four of Mobinil's employees to a state security court on after charging them with passing phone calls that served the interests of Israel.
"The incident did not make major news today, so it is hard to link it to the stock drop," Badra said.
Foreign investors accounted for some 20 per cent of total trading, and were net buyers for the second day in a row at LE1.4 million. Egyptians were also net buyers making up two thirds of the day's trading.
Arab investors were the main sellers today, marking net sales of LE3.8 million while contributing a mere four per cent of total trade.
The red colour flooded stock charts today, with 118 shares dropping and just 30 gaining.
Major stocks such as Orascom Construction Industries (OCI), EFG Hermes and Talaat Mostafa Group dropped 1.19, 1.6 and 3.37 per cent, respectively.
Other major stocks such as Commercial International Bank (CIB) and AMOC gained mildly at 0.1 and 0.57 per cent, respectively.