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Egypt bourse takes dive on external, internal political instability

Foreign investors drove main EGX30 index down 2.9 percent on mounting fears of Egypt-Ethiopia diplomatic crisis and approaching anti-Morsi Rebel Campaign rallies 30 June

Ahram Online, Wednesday 5 Jun 2013
Egyptian Stock Exchange
Traders work at the Egyptian Stock Exchange in Cairo (Poto: Reuters)
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Egypt stocks plummeted Wednesday as Arab and Foreign investors sold on fears of the country's worsening tensions with Ethiopia and domestic political instability.

The benchmark EGX30 index plunged by 2.9 percent to reach 5,071 points, its lowest level in eight weeks, as investors responded to the fallout of a Monday televised debate, in which leading Egypt political figures openly plotted against Ethiopia while unknowingly being broadcast live.

The discussion revolved around Ethiopia's decision last week to divert the flow of the Blue Nile as part of construction work for its new hydroelectric Renaissance Dam that Egyptians fear will cut their share of vital Nile River waters.

"The catastrophic incident frightened investors, who also have growing fears about the planned demonstrations of 30 June," said Osama Mourad, former chairman and CEO of the Arab Finance Brokerage Company.

Organisers of Egypt's anti-government Rebel campaign and their supporters have announced intentions to hold mass rallies in Egypt and overseas on the first anniversary of President Mohamed Morsi's accession to power, 30 June.

Arab and foreign investors were net sellers, unloading a combined net of LE1.9 million in a session during which 149 out of 179 listed stocks bore losses and saw turnover for listed stocks reach LE365.7 million.

The EGX30 index was entirely in the red, with Orascom Telecom Holding (OT) recording one of the sharpest drops, at 5.07 percent.

Investment bank EFG-Hermes Holding Company slid 4.23 percent.

In real estate, Palm Hills Development Company dropped 4.83 percent Six of October Development & Investment (SODIC) 4.35 percent. TMG Holding fell 2.18 percent.

Blue chips Orascom Construction Industries (OCI) and Commercial International Bank, however, registered lower losses, at 1.5 percent and 1.12 percent respectively.

The broader EGX70 index also declined, by 2.8 percent.

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