Egypt stocks slide amid waning investor confidence

Ahram Online, Wednesday 20 Mar 2013

EGX30 falls 1.55 percent after this week's crackdown on prominent business figures throws future of Egypt's investment climate in doubt

Staff at Egypt
Staff at Egypt's stock exchange market (Photo: AP)

The Egyptian Stock Exchange ended Wednesday in the red, as a recent crackdown on prominent business figures raised questions about the future of the country's investment environment.

The benchmark EGX30 index fell 1.55 percent to 5,162 points, extending its losses since the beginning of 2013 to a total of 5.5 percent (300 points). Turnover, meanwhile, remained weak on Wednesday, recording a meagre LE222 million.

"Investors are scared, since the behaviour of the authorities in Egypt has become extremely unpredictable and erratic," Eissa Fathy, vice president of securities at the Cairo Chamber of Commerce, told Ahram Online.

On Sunday, Egypt's prosecution-general froze the assets of 21 Egyptian and foreign businessmen, only to see the order reversed by a criminal court on Wednesday.

The on-again, off again asset freeze is the latest blow to Egypt's business community after Orascom Construction Industries (OCI), the largest listed firm in the country, saw founder Onsi Sawiris and chairman Nassef Sawiris banned from travelling abroad following accusations of tax evasion.

OCI saw its share price fall 2.05 percent to LE230 by the close of Wednesday's trade session.

Meanwhile, EFG Hermes – Egypt's largest investment bank – shed 3 percent for the day on some LE16 million in turnover.

Notably, EFG-Hermes CEOs Yasser El-Malawany and Hassan Heikal were among those whose assets were briefly frozen this week. The men face charges of engaging in insider trading and stock manipulation regarding the 2007 sale of El-Watany Bank of Egypt to the National Bank of Kuwait.

Commercial International Bank (CIB) was the most active share in Wednesday's session, generating LE29 million in turnover. Its shares shed 0.88 percent for the day, closing at LE31.49.

Ezz Steel, Palm Hills Development and Orascom Telecom Holding, meanwhile, fell by 1.93, 1.85 and 2.16 percent, respectively.

Out of 166 shares traded on Wednesday, 119 lost value while only 20 gained.

Non-Arab foreign investors, net-selling to the tune of LE12 million, accounted for roughly one third of the day's trade volume. Egyptian investors, for their part, represented net buyers at LE15 million.

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