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Egypt stocks hit red Wednesday as more violence looms

Cairo-based market expert says stocks likely to be further negatively impacted amid growing fears of weekend clashes

Ahram Online, Wednesday 24 Jul 2013
Egyptian Exchange
The Egyptian Exchange bell is seen at the stock exchange in Cairo (Photo: Reuters)
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Views: 871

Egypt’s ongoing political turmoil niggled investors as the stock market closed in the red Wednesday. Fears of continued instability were heightened after an explosive device went off at a police station near the security directorate in Mansoura, the capital of Daqahliya governorate in the Nile Delta, killing at least one conscript and injuring more than 25 late Tuesday.

The main EGX30 index tumbled 1.7 percent, recording 5,359 points, “The kick-off trading on Wednesday wasn’t bad, as not all investors knew about the Mansoura incident,” Ashraf Abdel-Aziz — head of institutional sales at the Cairo-based Arabia Online Securities — told Ahram Online.

The broader EGX70 index dived three percent in a session that saw significant daily turnover of listed securities worth LE419.1 million.

Abdel-Aziz added that more significant worries were generated among foreign and domestic investors when Egyptian Armed Forces commander-in-chief Abdel Fattah El-Sisi called for nationwide rallies Friday to furnish the army and police with a popular mandate to crack down on "violence and terrorism."

El-Sisi's statement follows a series of violent clashes across the country amid ongoing protests by Islamist currents, particularly the Muslim Brotherhood, calling for the reinstatement of Mohamed Morsi, ousted as president by the army 3 July.

“Several confrontations are expected in the next days, which will have negative impact on the trading,” Abdel-Aziz commented.

Egyptians and foreign investors were net-sellers of some LE4.8 million and LE1.1 million respectively.

Only Orascom Construction Industries (OCI) was a gainer rising 0.8 percent as many investors preferred buying shares that stood at LE250, waiting to sell them at LE255 to the Dutch-listed company OCI NV.

In June, OCI — the largest listed company in terms capital, representing 15 percent of the total market’s capital — received the Egyptian financial watchdog’s approval to launch its proposed tender offer for OCI’s outstanding ordinary listed shares.

OCI NV will offer all shareholders of OCI to convert an exchange offer, as well as a cash alternative of LE255 per share. The offer launched Thursday 27 June and will conclude Sunday 28 July.

Market bellwethers Commercial International Bank and Orascom Telecom dipped 0.8 and 2.6 percent respectively.

Listed real estate developers Talaat Mostafa Group, Palm Hills Development and Six of October Development and Investment Company plunged 3.2, 4.4 and 4.7 percent respectively.

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