Market Report: Egypt stocks fall 1.25 pct on prospect of divisive election

Ahram Online, Monday 28 May 2012

Exchange sees another round of losses and thin trading volume as investors await a fiercely fought run-off vote

Losses are milder than Sunday as investors get used to new political risks (Photo: Reuters)

Egyptian stocks slipped deeper into the red Monday as traders awaited confirmation of a presidential poll that will pit two divisive figures in a mid-June electoral showdown.

The benchmark EGX30 tumbled 1.25 per cent at 4,738.1 points, extending the 3.5 per cent loss it recorded on Sunday, the first day of trading after preliminary figures were released at the weekend.
Official results on Monday confirmed that the Muslim Brotherhood's Mohamed Morsi will compete against ex-prime minister Ahmed Shafiq in the second round of presidential elections slated for 16-17 June.
"Investors are afraid because now we have two extreme candidates facing one another. No one will invest heavily in Egypt in the coming period and until it becomes clear who is president," Amr Chamel from Cairo-based Pharos Securities told Reuters.
From 160 listed stocks, 92 lost value and 45 gained during the day's trade. Market volume was a thin LE240.735 million ($39.8m), reflecting sustained caution over involvement.
Foreign trade made up 13 per cent of the market, much lower than the day before. They remained net-sellers, albeit at a smaller margin.
Only five heavyweight stocks finished in the green, with the most famed firms seeing losses rather smaller than the day before.
The day's biggest loser was Mobinil, continuing to feel the impact of its sell-off to France Telecom. Shares in the mobile company plunged 9.64 per cent by Monday close.
Orascom Telecom also closed 2.5 per cent lower after an Algeria appeals court confirmed a fine on the firm's Algerian unit worth $1.3 billion. OT said it will appeal the verdict.
Also seeing significant losses were EFG-Hermes (down 1.6 per cent), Palm Hills (down 2.82 per cent), and the Commercial International Bank (down 2.19 per cent).
Small gains for the Talaat Moustafa Group and Telecom Egypt helped the index from a deeper fall.
"All stocks closed higher from the lows they were trading at mid session," said Naeem Brokerage in a note.
"[We] might see some of that optimism continue in the opening tomorrow."
Short link: