Traders work at the Egyptian stock exchange in Cairo (Photo: Reuters)
Egypt's indices continued to drop on Tuesday, unaffected by a decision from the country's financial watchdog to remove precautionary measures in place since the 2011 revolution, as investor fears of the Gulf crisis escalated.
The Egyptian Exchange and the Egyptian Financial Supervisory Authority (EFSA) announced that emergency measures in place since the market reopened after the uprising in March 2011 would be cancelled.
The deactivation of emergency measures will come into effect after Eid Al-Fitr – the holiday that follows the holy fasting month of Ramadan – as the state is witnessing improved political and security stability, said the EFSA's statement.
However, analysts say that the positive news has been overshadowed by growing regional concerns.
"The news hasn't impacted investors as they are focusing on the critical situation in Iraq, which is prompting fears of a Gulf crisis," said Eissa Fathy, vice president of the securities division at Cairo's Chamber of Commerce.
Egypt's position in the region and close ties with Saudi Arabia have prompted fears that it will be sucked into the conflict in Iraq after Iraqi Prime Minister Nouri Al-Maliki accused Saudi Arabia of financing ISIL, the Sunni militant group which seized key areas of the country this month.
The benchmark EGX30 fell 1.66 percent to 8,167 points and the broader EGX70 dropped 1.56 percent
Turnover of listed stocks was relatively low, recording LE569 million.
Egyptians were the net-sellers of the session, for LE34.3 million, while non-Arab foreigners were the principal net-buyers, to the tune of LE24.8 million.
Almost all of EGX30's shares were in the red, with market bellwether Commercial International Bank (CIB) shedding 1.71 percent of its share price to trade at LE35.65.
Telecom Egypt (TE) was down 0.82 percent to LE13.33, Global Telecom fell 2.43 percent to LE5.22 and Orascom Telecom Media and Technology Holding (OTMT).
Property developer TMG Holding fell 2.85 percent to trade at LE8.53, Six of October Development and Investment Company (SODIC) shed 2.92 percent to trade at LE31.22 a share and Palm Hills Development Company dropped 3.33 percent to LE4.07.
The exchange and banks nationwide will be closed on Tuesday 1 July to mark the end of the fiscal year on 30 June.
The bourse also announced that trading hours will be cut short during the Islamic holy month of Ramadan – 10am to 2pm, starting Sunday 29 June.