Stocks steeped in red after night of violence (Photo: Reuters)
Egypt’s stocks pared steep losses on Monday after plunging 5 per cent on opening, as the worst single night of violence in Cairo since February sent investors running for the exits.
The benchmark EGX30 closed down 2.28 per cent at 3,936 points, rebounding from the 5.15 per cent fall that occurred within minutes of the start of trade.
At least 24 people were killed when Coptic Christians, angered by a recent church attack, clashed Sunday night with security forces outside the capital’s state television building.
“There was a big panic in the market, especially with small investors and retailers,” said Nael Sedky, an equity trader at Naeem Brokerage. “Foreign investors want to leave the market as soon as possible.”
More restrained losses for the broader EGX100 meant the session wasn’t halted, but dramatic falls for blue-chip stocks like Orascom Telecom and the Commercial International Bank saw their trade suspended for 30 minutes.
Local institutions later stepped in, buying shares in higher-cap firms and pruning the main index’s earlier losses. Egyptians were the day’s only net-buyers, with foreigners and other Arabs offloading their stock.
Market turnover was LE220.16 million, a marked climb on Sunday when trade fell to its lowest in nearly a decade.
“We had some big orders from local buyers after [the temporary freeze on high-cap shares] and that helped the market,” said Sedky.
From 191 traded stocks, 23 gained value and 148 declined, with all sectors either finishing in the red or stagnating.
Despite the slight revival, high-caps took solid hits. The market’s largest cap, Orascom Construction, tumbled 2.95 per cent, its performance mirrored by Citadel Capital, down 3.22 per cent, and troubled property developer the Talaat Moustafa Group, which lost 2.3 per cent.
Lower cap stocks registered the greatest losses as individual investors fled the scene. Monday’s five biggest losers were all relatively modest tourism and basic materials firms.
Violence in the streets and turbulence on the Bourse also acted to stall protests planned for later this week by stock brokers, angered by the steady fall in their salaries.
Much of their pay comes from commissions, and as trade has steadily shrunk, so have wage packets.
“People are searching to understand what happened last night. They feel this is no time to protest over small demands,” said Sedky.
While Cairo sees a moment of fragile calm, those working with the stock exchange are wary too. Any further unrest is likely to deliver yet another massive blow to an already crippled stock market.
“Most investors are waiting to see if there are more protests or clashes before they will get involved in the market,” said Sedky.