Egyptian stocks tumble 2pct on investor worries after Centamin verdict
An Egyptian court decision to suspend the operations of an Egyptian gold mine run by foreign company Centamin may be behind today's drop
Ahram Online, Tuesday 30 Oct 2012
Traders work at the Egyptian Stock Exchange in Cairo (Photo: Reuters)
Egyptian stocks declined on Tuesday as the mood of the market shifted, prompted by a variety of concerns related to foreign investments in the country.
The main index EGX30 plunged 2.1 per cent, recording 523.8 points, as an Egyptian court halted the operations of Egypt's largest gold producer Centamin.
Egypt's State Council said the Tuesday ruling was reached after the court decided there had been irregularities in the way Centamin had renewed its contract to exploit the country's largest gold mine.
The latest renewal was carried out by a government official, without passing through Egypt's lower house of parliament as is customary, the Council said.
Mostafa Badra, a capital market expert, said that an article in Egyptian daily Al-Masry Al-Youm sparked investors' worries by reporting that two financial organisations in Europe and the US have delayed around $1 billion worth of aid to Egypt, as they wait for the International Monetary Fund’s decision on a possible $4.8 billion loan requested by the Egyptian government.
The broader EGX70 index slipped 1 per cent in the session. Domestic investors were the only net-buyers at LE13.4 million, while foreign investors sold LE14.7 million. Badra speculated that foreign investors might have been less active because of the closure of US markets due to severe weather.
Contrary to Monday’s session, all blue-chip stocks tumbled, led by Commercial International Bank and Orascom Construction Industries which were down 3.4 and 2.3 per cent respectively.
Orascom Telecom fell 2.6 per cent; the company is considering the sale of all or part of its interests in central and southern Africa as part of a review of its operations in the region.
In property shares, the Talaat Mostafa Group, Palm Hills Developments and Six of October Development and Investment slumped 0.7 per cent, 2 per cent and 2.4 per cent respectively.
The total daily turnover reached LE523.8 million.