Another rounds of losses ahead of 23 May election (Photo: Reuters)
Egypt's stocks deepened their losses on Tuesday as investors cut risk ahead of a presidential election that seems unlikely to provide a quick boost for a troubled economy.
The benchmark EGX30 dipped for its second consecutive session, losing a further 1.12 per cent to land at 5,060 points, having hit a seven-week high on Sunday. The broader EGX70 fell a yet greater 1.37 per cent.
"Investor expectations are fluctuating as elections approach and we see a war of words between candidates and their supporters," Issa Fathy, vice president of the securities division at Cairo's Chamber of Commerce, told Ahram Online.
From the 174 stocks traded on Tuesday, just 24 closed in the green while 140 lost value.
Market volume continued its mild resurgence, hitting LE365.9 million -- slightly down from Monday's total -- but a climb on the previous week's average.
The performance of investment bank EFG-Hermes put some pressure on the market, as investors moved to take profits spurred by the recent announcement of the firm's deal with Qatar-based Qinvest. Shares in EFG-Hermes slipped 3.58 per cent by the close of the session.
Fellow blue chips, the Commercial International Bank and Orascom Construction Industries, followed the market's downward trajectory, shedding 0.8 and 1.2 per cent respectively. Developer Palm Hills fell 4 per cent despite shrinking its first-quarter net loss.
Mobinil and Telecom Egypt were the EGX30's only gainers, edging up 0.05 and 0.23 per cent. Orascom Telecom Media and Technology, which saw large gains in recent weeks, remained unchanged.
The long-awaited takeover of Mobinil by France Telecom will be finalised on 23 May, the same day as Egypt's presidential elections.
Under the deal, FT will buy the majority of Egyptian tycoon Naguib Sawiris' stake in their jointly owned telecom operator at LE202.5 per share.
"There's no reason for investors to sell Mobinil shares at less than the announced price," Fathy explained.
Egyptian investors were the day's only net-buyers, snapping up LE1.6 million more in stocks than they sold. Arabs and other foreign investors, by contrast, recorded net outflows of LE6.8 million and LE5.2 million respectively.
Despite the downturn, Fathy sees little reason for concern.
"In the long term the market should stablise and losses will be compensated. I don’t expect big surprises in coming days," he said.
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