Political delays prompt uncertainties on the Bourse (Photo: Reuters)
Egyptian stocks saw their second consecutive session of losses Monday, as delays in the forming of Egypt's new cabinet and gloomy economic forecasts prompted twitchy foreign investors to offload further stock.
The benchmark EGX30 fell 1.3 per cent to close at 4,019.5 points, deepening Sunday's marginal losses.
"Egyptians don't have the feeling of stability yet," said Ashraf Abdel Aziz, head of institutions sales at Arabeya Online Securities, adding that delays to the forming of Egypt's new cabinet was causing uncertainty among investors.
The country's freshly appointed prime minister, Kamal El-Ganzouri, said on Sunday that the announcement of the new government would be postponed until Wednesday due to difficulties in appointing an interior minister.
From 178 listed stocks only 49 gained in value while 118 fell in a session which saw total turnover of LE299.9 million.
Foreign investors were responsible for over half of the day's trade -- an unusually high contribution -- and were net-sellers of LE32.6 million in stock. Egyptians, by contrast, bought at net total of LE26.1 million.
"As the financial year approaches its end, many foreign institutional investors change their financial position. Some investors could also be adjusting their positions to accommodate their forecasts of Egypt's economic future," Abdel-Aziz explained.
Broader indices followed the main index but with little drop as EGX70 down 0.7 per cent and EGX100 fell 1 per cent.
The market saw large block trades of its two biggest stocks, Orascom Construction Industries (OCI) and Commercial International Bank (CIB) amounting to LE36.5 million and LE33 million, respectively. Put together they made up 40 per cent of the day's total trade.
CIB dropped 2.84 per cent in value to close at LE23.3 per share while OCI slid 2 per cent to close at LE215.74.
Other heavyweights plunged too, with Ezz Steel, TMG Holding and EFG-Hermes falling 2.3 per cent, 1.6 per cent and 0.5 per cent respectively.
One of the market's largest firms, Orascom Telecom, was unable to salvage matters; its shares suspended while the company is split into separate units.
Cablemake El-Swedy was one of the few high-caps to buck the downwards trend, gaining 1.5 per cent.
Abdel Aziz expects the market to stage a revival later in the week as the political picture becomes clearer.
"If stage one of the elections passes peacefully and brings some kind of calm, we could see a proper rebound for the market," he said.