Egypt stocks take heavy losses as political and economic turbulence continues (Photo: AP)
Egyptian stocks slumped to a three-week low on Tuesday as concerns grew over a seeming parliamentary decision to withdraw confidence from the country's military-appointed government prompting aggressive sales of high-cap stocks.
The benchmark EGX30 fell 3.27 per cent to 5,052 points, its lowest close since 22 February.
The index surged almost 50 per cent in the first two months of 2012, placing it among the fastest growing worldwide.
"The intention of parliament to make a vote of no confidence has affected the market. Everyone is reassessing the situation," said Osama Mourad of Arab Finance Brokerage.
Shares saw across-the-board losses with just 13 of the 187 firms listed on the exchange finishing in the green. The financial services sector was hit hardest, but all except healthcare and pharmaceuticals took significant damage.
On Sunday evening, Egyptian MPs initiated procedures for a vote of no-confidence in the government, prompting seven government ministers in attendance to walk out of the People's Assembly.
By Tuesday it seemed that most parliamentarians, with the exception of the Islamist bloc had rolled back on their demand, but the damage to investor sentiment was apparently already done.
Market turnover was a relatively high LE581.97 million ($96.46m) with individual investors responsible for the majority of trade. Foreign, non-Arab investors sold off a net LE48.1 million in stocks as institutions moved to cut their losses.
The exchange was further weakened by the faltering performance of financial firms, said Mohamed Radwan of Pharos Securities, attributing this to a report in Al-Ahram newspaper that an accord for a $3.2 billion loan Egypt is seeking from the IMF won't be signed until April. Egyptian financial officials say the loan is vital to stave off a fiscal crisis after over a year of economic and political instability.
The country's largest listed firm, Orascom Construction Industries slipped 1.77 per cent, setting the tone for the rest of the market.
Orascom Telecom Holding (OT), the Egyptian company bought last year by Russia's Vimpelcom Ltd, plunged 4.91 per cent following its announcement Monday of $83 million in losses for the fourth quarter of 2011.
The other company spun off from Orascom's sale and still under Egyptian ownership, Orascom Telecom Media and Technology dipped too, slipping 2.03 per cent. The sector's other firm, mobile operator Mobinil, saw a more modest loss of 0.39 per cent.
Financial firms saw some of the day's heaviest losses, amid sustained anxiety over Egypt's fiscal predicament. Pioneers Holding plunged 7.29 per cent by the close of play, while EFG-Hermes lost 6.28 per cent.
Real estate companies also suffered after Palm Hills , the Talaat Moustafa Group (TMG) and Amer Group reported losses or poor earnings for 2011 over the last few days. TM finished the day down 6.43 per cent, while the Amer Group lost 7.69 per cent.
As Egyptian stocks tumbled, international markets headed in the opposite direction. European shares climbed to their highest in over seven months as encouraging data from Germany and the United States signaled a recovery in the global economy, boosting appetites for riskier assets.