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Egypt stocks tumble 1.5pct despite trouble free constitution poll

The EGX30 — Egypt's main market index — declined 1.5 per cent, with uncertainty ahead this week

Karim Hafez , Sunday 23 Dec 2012
Egypt
An interior view of the Egyptian stock market is seen in Cairo (Photo: Reuters)
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Egypt's stock market plunged Sunday although analysts had predicted a surge on Egyptians approving the draft constitution relatively peacefully.

Egypt's main benchmark index, the EGX30, fell 1.5 per cent to 5,362 points. The broader EGX70 index also saw a decline by 2.6 per cent.

Around 125 listed stocks suffered losses Sunday, headed by blue-chip stock Orascom Construction Industries (OCI) and Commercial International Bank (CIB), which tumbled 1.11 per cent and 1.3 per cent respectively.

"The slide today was quite unexpected, especially that the second phase of the referendum was trouble-free. It is very hard to expect the market's performance in the upcoming days, but it is likely to be linked with political developments," Ashraf Abdel-Aziz, head of institutional sales at Cairo-based brokerage Arabeya Online, told Ahram Online.

If the results of the constitutional referendum are contested by opposition forces and the National Salvation Front (NSF), the stock market will likely to register further losses and a shrinking trade volume for the rest of the week.

Turnover reached a meagre LE443 million Sunday, reflecting traders' reluctance to invest and their wariness regarding the political situation in Egypt.  

Egyptian investors were net sellers for the day, offloading almost LE26 million worth of shares, in line with last week's trend. Arab and foreign investors were both net buyers picking up almost LE2 million and LE24 million respectively.

"Liquidity is what really stirs the market and the prices of shares. On today's session, liquidity was just not enough to boost stock market performance," said Issa Fathy, vice president of securities at the Egyptian Chamber of Commerce.

"The stock market might witness a surge and recover from its losses by the end of tomorrow's session, especially that the NSF's statement today indicates that there will be no escalation in the street against the constitution," explained Fathy.  

Most sectors performed poorly today. The real estate sector tumbled with market giants Palm Hills Development and Talaat Mostafa Group Holding declining by 2.78 per cent and 1.33 per cent respectively.

The banking sector suffered less, building on the gains of Qatar National Bank's(QNB) takeover of Société Générale's stake in its Egyptian unit, NSGB, with NSGB declining by a mere by 0.41 per cent.

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