Sectarian clashes in Egypt sparked further trouble for the country’s embattled stock market as trade resumed Sunday.
The EGX30 opened the week in the red, losing 1.19 per cent to close at 4,878 points.
Of 178 traded stocks, only 16 showed gains while 149 declined.
The first half of the four-hour trading session was hit hard by last night’s Christian-Muslim clashes in northwest Cairo, as the EGX30 fell to 4,850 points and trade in the stocks of 14 companies was temporarily halted. The market began to recover later in the day, driven by gains in EGX70 shares.
“Leading stocks were most affected by the violent events at the beginning of the session, while speculative stocks were quick to recover,” says Ahmed El-Mabady, head of technical analysis at HA Securities.
The broader EGX70 and EGX100 indexes -- which include stocks favoured by speculative buyers -- declined by 1.06 and 0.98 percent respectively.
Trading volume was a remarkably low LE294 million, as the market seemingly stalled on political unease.
“Investors just want to maintain the status quo of their holdings in the market. Instability is shadowing every business transaction in the country, not only the stock exchange,” says El-Mabady.
Healthcare and pharmaceuticals was the only sector closing in the green with marginal growth of 0.44 per cent.
The Supreme Administrative Court ruled Saturday that the prices of new non-generic drugs in Egypt will be tied to international prices, which could translate into greater profits for some listed pharmaceutical companies. El-Mabady attributes the growth of the sector to this ruling.
Stocks in investment banks Citadel, Hermes and Beltone were among the market’s main losers, leading to an overall drop of 3.52 per cent in the financial services sector.
“Problems with management are continuing to haunt this sector,” El-Mabady explains.
Citadel Capital’s Ahmed Heikal was banned from travelling back in April on accusations of embezzling public funds. EFG-Hermes stock is continuing to lose value amid allegations of its connection to Gamal Mubarak.
El-Mabady is cautiously optimistic when it comes to the financial sector. “The beginning of a new economic cycle should be a catalyst to boost the financial services and banking sectors. We just hope that the economic and political situation cools down,” he says.
National Cement stock was the day’s highest gainer, rising 8.09 per cent on the announcement of a LE20 million increase in net profits subject to distribution.
Foreigners and Arabs continued a weeklong trend of selling, offloading the net sum of LE9.8 million. Egyptians, on the other hand, were responsible for 91 per cent of trades and were net-buyers.
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