Time to despair? Clashes prompt another tumble for Egypt's blighted stock exchange (Photo: Reuters)
Egypt's major stocks tumbled deeper into the red on Sunday as clashes between protesters and security forces entered their second day, battering investor confidence in the country's already struggling economy.
The EGX30 closed down 2.45 per cent at 4,023 points, its lowest level in six weeks, and pushing the index's year-to-date losses to nearly 44 per cent. The index plunged almost 3 per cent on opening before rolling back some of its losses before the final bell.
Brokers attributed the drop to the clashes between rock-throwing protesters and security forces in Cairo's central Tahrir Square.
"These are bad times," said Khaled Naga, a senior broker with Mega Investments, adding that even after a thousands-strong demonstration on Friday went relatively peacefully, there were expectations that the market would decline.
But he added that, considering an eruption of violence unparalleled since the pitched battles of early February, Sunday's decline was "reasonable".
"We were expecting worse — maybe 5 per cent," said Naga.
Fighting in central Cairo has entered its second day, with protesters demanding the country's military rulers quickly announce a date to hand over power to a civilian government. The unrest comes days before the 28 November parliamentary elections
From the 169 stocks traded on Sunday, 151 lost value and only 9 gained. This across-the-board pasting was reflected in the broader EGX70, which plunged 3.96 per cent.
Egyptians were the day's only net-buyers, picking up the discarded stock of other Arabs and foreigners. The latter made up 26 per cent of the market -- an unusually proportion for Sunday -- and a suggestion of their eagerness to exit the market.
Higher-cap stocks took hefty losses, with shares in Orascom Construction Industries and Commercial International Bank falling 3.18 and 2.61 per cent respectively.
Egypt's three telecom firms were hobbled too, with landline monopoly Telecom Egypt the biggest loser, down 3.08 per cent.
Smaller caps in the real estate and tourism sector took the heaviest battering, with firm firms falling almost losing the financial authority-stipulated maximum of 10 per cent.
Investment bank Beltone Financial was one of the few stocks to row against the tide, finishing 3.33 per cent up. Misr Cement, which closed its factories due to strikes in late October, also made a suprising 1.19 per cent gain.
Total turnover was a thin LE201.137 million; low by the standards of just four months ago, but not signicantly below its average over the last few weeks.
Brokers said continued unrest in the capital would likely only add to the drop and expected that the market's support point — where it could bounce back — could be around 3,800 points.
But hitting that level would involve a number of days of heavy losses and so far the Egyptian market has shown a surprising ability to bounce back despite the continuing unrest and tension in the nation.
The 25 January uprising that toppled former president Hosni Mubarak and ended nearly three decades of authoritarian rule has battered the country's economy. Already, Egypt has run through almost 40 per cent of its net international reserves since December.
Foreign investment and tourism, which are two of the country's economic pillars, are reeling from the unrest, while strikes and other mass protests have forced the government to adopt populist policies that have widened the deficit and added to expenses.
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