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Egypt's stocks posts heavy losses after El-Sisi announcement

Egypt's bourse fell by 2.7 pct in what analysts describe as a normal correction

Ahram Online , Thursday 27 Mar 2014
The Egyptian stock market (Photo: Reuters )
Views: 1782
Views: 1782

Egypt’s benchmark index EGX30 fell by 2.7 percent on Thursday to register 8,252 points, dashing hopes that news of former army chief Abdel-Fattah El-Sisi's presidential bid would boost the market.

On Wednesday, El-Sisi resigned from the military and announced that he was determined to run in Egypt's upcoming presidential elections.

Since the 2011 uprising, Egypt's stock market has been influenced mainly by political events and the country's security situation, but lately the market hasn't responded to several incidents, including political violence. 

However, analysts don't see the market's fall as a negative reaction to El-Sisi's announcement but more in line with the old proverb, "Buy the rumour, sell the news."

"The news about El-Sisi's candidacy has been expected for some time and the market lately has made considerable profits without a strong correction," said Ashraf Abdel-Aziz, head of institutional sales at the Cairo-based Arabia Online.

He says that analysts had been expecting the market to register high losses for correction after the main index gained more than 70 percent in the last few months. "We were expecting this correction to happen at any given moment," he said.

Egypt's market fell slightly on Wednesday following Tuesday’s six-year record high. 

Daily turnover was high, at LE1.5 billion ($214 million).

Egyptian investors were net sellers to the tune of LE94.3 million ($13.5 million), while non-Arab foreigners were net buyers with LE63.6 million ($9 million). Arab investors followed as net buyers with LE30.8 million ($4.40 million).

All the shares of the main index EGX30 registered considerable losses, with the exception of El-Swedy Electric and Juhayna Food Industries, which were up 1.22 and 1.26 percent, respectively.

Market bellwether Commercial International Bank (CIB) lost 1.95 percent to close at LE37.67 per share.

In the telecom sector, Global Telecom Holding fell 2.91 percent to LE4.67 per share, while Telecom Egypt (TE) dropped 3.30 percent to LE16.98 per share.

In the sector of financial services, excluding banks, Amer Group Holding lost 6.01 percent to close at LE1.72 per share, while Pioneers Holding fell by 4.93 percent to LE12.91 per share.

Egyptian Financial Group-Hermes Holding lost 3.98 percent to LE12.78 per share.

From the real estate sector, TMG Holding fell 3.74 percent to end the day at LE8.24, while Palm Hills Development dropped 4.98 percent to LE4.01.

Out of 186 stocks traded over the day, 168 lost in vale, while only 12 gained. 

The broader index EGX70 lost 4.35 percent. 

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