Egypt's main index dipped once more on Monday with a sell-off by foreign and local institutions of both the market's most heavyweight and most liquid stocks.
Orascom Telecom Media and Technology Holding continued to slide on fears concerning the deconsolidation of its North Korean subsidiary mobile operator Koryolink, tumbling 6.06 percent to close at LE0.62 a share.
The company said in a statement to the Egyptian Stock Exchange on Sunday that sanctions against North Korea had affected its ability to operate there, prompting it to deconsolidate.
"We discounted this Korean subsidiary since day one, knowing the risk, but the market overreacted," Ahmed Abu Taleb, Vice President Sales at Cairo-based Pharos Securities, told Ahram Online in a telephone interview.
Market bellwether and Egypt's largest private lender Commercial International Bank (CIB), a major outperformer until recently according to Abu Taleb, slid down by 4.08 percent to close at LE42.37 a share.
There are concerns around the interest rate increases on three-year deposits with Bank Baraka announcing 13.5 percent interest yesterday, Abu Taleb said.
"This will decrease the net interest income for banks mainly and could lead to a margin compression but this is in the long or medium term fundamental analysis."
Higher interest rates on three-year deposits reaching 13.5 percent may be a factor, says Abu Taleb, as "it creates an environment of more cash and less equities so international investors feel there is higher risk and less valuation and they tend to sell CIB."
Non-Arab foreign institutions were net sellers to the tune of LE56.3 million according to bourse data while their local counterparts were net-sellers at LE26.5 million.
CIB will remain pressured, pulling the market down in the next couple of sessions, said Abu Taleb.
Orascom Construction dropped 1.9 percent after reporting third-quarter earnings saying it would distribute a total cash dividend of $0.36 per share in 2016, implying a yield of 5.1 percent based on its NASDAQ Dubai closing price of $7.0 per share on 22 November. The Dubai-listed shares rose 0.7 percent, however.
Orascom Construction Ltd. saw its share price drop 1.97 percent to LE66.09 after reporting third-quarter net income of $24.5 million and revenue of $1.145 billion on Monday. The company, which is also listed on NASDAQ Dubai, said it would distribute a total cash dividend of $0.36 per share in 2016.
"Fundamentally other blue chips are looking much better than CIB valuation-wise so we could see them outperforming it," he said.
The index is unlikely to see a rebound before the 6,200 point level is reached, estimates Abu Taleb.