Two staff members of Egypt's stock exchange follow a monitor at the trading hall (Photo: AP)
The Egyptian stock exchange maintained its downturn for the third consecutive day as the benchmark EGX30 dropped 0.91 per cent in calm trade.
The travel and leisure sector was the biggest loser, a drop of 3.7 per cent adding to its 52 per cent decline since the beginning of the year.
Marian Azmy, financial analyst at HC Securities and Investment, said the drop was expected: “The tourism sector in Egypt is witnessing one of the worst times in its history despite all the efforts to support it. It is only normal for the sector’s equities to dip.”
Egyptian for Tourism Resorts Co. dipped 4.6 per cent, dragging the whole sector downwards. Investors are worried that lands acquired by the company may face a similar fate of those belonging to firms like Palm Hills.
The EGX30 has lost almost a third of its value since the beginning of 2011 on the back of seismic shifts in Egyptian politics. The president of the Egyptian stock exchange has announced that several Egyptian officials will be visiting the Gulf region next week to promote investment in the troubled Bourse.
The market started the week in the green, leading many to believe it was recovering. But trading since Monday has failed to bear out these predictions.
“What happened in the first day of trading this week was a normal rebound of prices, we cannot say it was the beginning of an upward trend,” Azmy told Ahram Online.
Today the broader EGX70 and EGX100 dropped 0.54 percent and 0.67 percent respectively.
Azmy believes that political and economic instability in Egypt will prevent the market from any real growth in the coming months.
“The market will start to stabilize after the parliamentary elections in September. I think we might see growth in the market only after the presidential elections,” she said.
Of 180 traded stocks, 123 dipped while 47 showed gains. Egyptians only comprised 44 per cent of trading, ending the session as net-buyers by hitting the LE.8.8 million mark.
Only the banking and basic resources sectors closed in the green, each achieving growth of less than 0.5 per cent.
“Banking and basic resources were affected by selling sprees after 25 January due to rumours of corruption in these two sectors,” explained Azmy.
Stock in Commercial International bank’s (CIB) gained 0.58 per cent today, boosting the entire sector due to its high market capitalisation. Azmy says CIB stock should rebound in the coming sessions, recovering from the selling spree kicked off by rumours the bank was connected to the Mubarak family.
El Ezz Al Dekhela Steel and Ezz Steel, two companies affiliated with Ahmed Ezz, a former NDP official currently under arrest, closed in the green today, pushing the basic resources sector upwards. Both were severely hit when Ezz was taken into custody.
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