Egypt's stock exchange struggled for the second day in a row with global economic uncertainty brought about by the US debt downgrade.
The benchmark EGX30 shed 2.04 per cent to reach 4,701 points on Monday, its lowest level since the second quarter of 2009, when the market felt the effects of the economic crisis sweeping the world at the time.
"The market was not prepared for more problems, it's already suffering from domestic hardships," explained Ashraf Abdel Aziz, head of institutions sales at Arabia Online Securities.
Other Middle East stock markets managed to cushion themselves from the worst impact of the US crisis today, with Saudi Arabia, Kuwait and Qatar dropping 0.33 per cent, 0.2 per cent and 0.76 respectively. Israel's main index actually gained 1.49 per cent.
Egypt's Bourse has been struggling in the aftermath of January's uprising, with the EGX30 losing 34 per cent of its value since the beginning of the year. The exchange was frozen after its 27 January session for a period of five weeks in the aftermath of the turmoil which forced Egypt's former president to step down.
The market has been fluctuating since it reopened on 24 March, with no clear indication it will recover soon. The bad news from the United States has only added to the uncertainty.
"Some big stocks are going through serious troubles, which isn’t helping the market to mediate the adversity," said Abdel Aziz.
He pointed to stocks such as Mobinil which lost 7.16 per cent of its value on Monday, closing at its lowest price in almost three years. The mobile provider has been struggling with an Islamist-led boycott campaign that the company expects to cost it "hundreds of thousands of subscribers", throwing a heavy shadow on its 2011 prospects.
Orascom Development holding (OHD), the 14th largest stock on the market, dropped 6.77 per cent in today's session. The real estate and hotels developer has seen its share value deteriorate over the past two months after reporting a 98 per cent drop in its 1Q2011 bottom line compared to last year.
OHD blamed its struggle on the turmoil in the regions, especially Egypt, the group's biggest market.
All sectors finished in the red, with tourism seeing the severest slump -- 5 per cent -- driven by OHD. Real estate also dipped 3.85 per cent, pushed down by losses for with giants Palm Hills and Talaat Mostafa group which lost 5.53 per cent and 2.42 per cent respectively.
Abdel Aziz said some sectors have been severely hit by politically driven uncertainties as well as corruption claims.
"Real estate, basic resources and tourism sectors have witnessed the sharpest decline since the beginning of the year but they will be the fastest to recover when things get better," he predicted.
He believes that any future market recovery across all sectors will be dependent on two issues.
"If the US debt problems don’t develop into a world crisis and the political climate in Egypt stabilises, with elections going smoothly on schedule, we could witness a real comeback for the Bourse," he said.