Egypt stocks see their third day of losses (Photo: AP)
Egypt's major stocks dived deeper into the red on Monday as tensions between the government and new parliament reminded investors of the deep political uncertainty that remains in the country more than a year after its uprising began.
The benchmark EGX30 tumbled 1.45 per cent to 5,223 points, deepening Sunday's losses. The broader EGX70 index dropped below 500 points, losing 2.22 per cent of its value.
"The drop is a normal price correction," Walaa Hazem, asset manager at HC Securities told Ahram Online, adding that the market's recent surge had stretched it too far.
"The gains the market witnessed since the beginning of the year were rightly justified by cheap share prices and the relative political stability," Hazem explained.
"But the market kept on surging the past few weeks with no proper reason."
The EGX30 reached its highest level in over six months on 7 March when it climbed to 5,452 points -- some even expected it to climb to 5,600 points, a major milestone.
Egypt's stock market saw its value climb almost 50 per cent in the first two months of the year, putting it one of the world's fastest growing in 2012.
But the last few sessions have put paid to the idea of a full market recovery. Hazem believes it is still too early for the market to return to its pre-uprising levels.
"The risk in Egypt is still existent, especially related to political uncertainty," he said. "At the beginning of the year, the prices were so low to justify the risk bu now they are not."
Egypt's political direction is still unclear as the country's awaits the writing of a new constitution and the election of its first freely-elected president in modern times.
Even the fate of the current cabinet, led by Prime Minister Kamal El-Ganzouri, is unclear after the parliament said Sunday it planned a vote of no confidence in his administration.
Turnover during Monday's session reached LE633 million (around $106m), with 161 shares losing value and only 18 gaining.
Palm Hills Development (PHD), Egypt's second largest real estate developer, saw its share price drop 5.6 per cent to close at LE2.03.
The company announced on Monday net losses of LE331.3 million ($55 million) for 2011, compared with profits of LE526 million the previous year, as sales revenue plunged 67.6 per cent.
Other high caps, such as Orascom Construction Industries (OCI), Talaat Mostafa Group (TMG) and Orascom Telecom Holding (OTH) shed 1.1, 3.63 and 1.38 per cent respectively.
ASEC Company for Mining tumbled a whopping 7.45 per cent following last week's announcement of net losses of LE97 million for 2011.
Ceramics maker Lecico also saw its stock plunge 7.6 per cent, making it the day's second biggest loser, following its announcement of net losses of LE22.5 million for 2011 which it reported last Thursday.
Orascom Telecom Media Technology (OTMT) was the day's highest trader, seeing LE66 million in turnover. Its share price, however, saw no major fluctuations throughout the four-hour session.
Egyptian investors dominated Monday, making up 73 per cent of total volume.. Non-Arab investors, responsible for 16 per cent of deals, were the day's main net sellers and offloaded LE70 million in stocks.