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Egypt's stocks plunge amid currency woes, global decline in markets

Ahram Online , Tuesday 3 May 2016
Egypt
Egypt's stocks (Reuters)
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Egypt's stocks plummeted Tuesday amid reemerging currency woes and a overall decline in global and regional markets.

Egypt's benchmark index, EGX30, fell 3.11 percent to 7,531 points as daily stock turnover reached EGP 695 million.

"A major factor in the decline of Egypt's stocks witnessed Tuesday is the return of a gap between the official and unofficial currency value," Ihab Saied, head of research at Cairo-based Osool for securities brokerage, told Ahram Online.

A growing currency black market in Egypt has widened the gap between the official value of the Egyptian pound, set by the central bank through weekly auctions, and the unofficial value.

A central bank move to devalue the Pound by more than 14 percent in March had temporarily closed down on the gap between the two values.

Reuters reported that the central bank sold $119.6 million at EGP 8.78 per dollar on Tuesday, far from the black market rate of around 11.05 per dollar that was quoted on earlier in the day.

Last week, traders on the black market quoted an exchange rate of 10.40/10.50 to the dollar, the news agency added.

The decline in the Egyptian stock market comes amid a present slide in global stocks, Saied said.

Institutions comprised 50 percent of all trade in the Tuesday session and were net sellers to the tune of EGP56.2 million.

Blue chip Commercial International Bank (CIB) dipped 2.32 percent to EGP 43.4 per share, and Orascom Media and Technology Holding (OTMT), decreased 2.7 percent to EGP 0.69 per share.

Edita Food Industries was the only stock to gain value in the main index, rising 1.48 percent to EGP 33.5 per share.

Steel manufacturer Ezz Steel saw the second sharpest drop in the main index, falling 6.78 percent to EGP 8.02 per share. Financial services firm Pioneers Holding suffered the sharpest decline Tuesday, dipping 7.11 percent to EGP 9.06 per share.

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