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Egypt's stocks continue falling on economic uncertainty, security concerns: Analysts

Ahram Online , Tuesday 24 Nov 2015
File Photo: Traders work at the Egyptian stock exchange in Cairo August 18, 2013. Egypt's stock market fell sharply on Sunday (Reuters)
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Views: 1620

Egyptian stocks continued to decline on Tuesday amid concerns over economic policies and rising security worries, analysts told Ahram Online.

Benchmark, EGX30, fell more than 2 percent to record 6,321 points, continuing slipping from 7,413 at the beginning of the month, a 15 percent fall since then.

Representing more than a quarter of Tuesday's total stock turnover (around LE339 million= $43.3 million), bellwethers Orascom Telecom for Media and Technology (OTMT) and Commercial International Bank (CIB) stocks dipped 6.45 percent to be sold at LE0.59 ($0.075) per share and 2.41 percent to LE41.85 ($5.34) per share respectively.

OTMT continued to slide following a statement on Sunday saying that sanctions on North Korea affect its ability to control its 75-percent-owned subsidiary there, prompting it to deconsolidate.

However, foreign investors leaving the market have negatively impacted the CIB stocks, Monsef Morsi, sector head financial at the investment arm of the bank CI Capital, told Ahram Online.

Non-Arab Foreign investors were net sellers to the tune of LE3 million ($383,000) on Tuesday and Egyptian investors were net sellers at LE19 million ($2.43 million) while Arab investors were net buyers at LE22 million.

"Foreigners are exiting due to the absence of economic vision including foreign exchange, interest rates and the political events influencing tourism," he said.

A state bank led hike in interest rates for saving certificates has prompted analysts to anticipate the flotation of the currency to save Egypt's depleting foreign reserves. The central bank then surprised the market by strengthening the pound against the dollar by LE0.1, a move that lead to increased uncertainty over the monetary policy committee's next decision under the new governor, Tarek Amer.

Egypt is currently struggling to access foreign currency, a concern seen deepening by the rising fears over the region's security threatened by a possible escalation in Syria's war, Osama Mourad, chairman of Acumen Securities and Brokerage, told Ahram Online.

With the exception of Six of October for Development and Investment Company (SODIC), leading real estate companies made losses. Talaat Moustafa Group (TMG) was down 1.8 percent to LE5.98 ($0.76) per share and Palm Hills for Development (PHD) dipped 0.47 percent to LE2.13 ($0.27) per share while SODIC inched up 0.13 percent to LE7.86 ($1) per share.

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