Egyptian EGX30 index continues to fall on fears of instability

Ahram Online , Monday 10 Jun 2013

Egyptian shares accumulate heavy losses with anti-government rallies set for 30 June looming

stocks
Traders work at the Egyptian Stock Exchange in Cairo (Photo: Reuters)

Egypt's benchmark EGX30 index fell by 2.8 percent on Monday, amid fears of political instability ahead of upcoming anti-regime protests.

The market reacted negatively to clashes that took place on Thursday in the northern city of Damanhour, which left 24 injured.

On Friday, worries of violence increased after unknown assailants set on fire the headquarters of the anti-Morsi ‘Rebel’ campaign in Cairo.

The incidents increased investors' fears of violence and instability on 30 June, when major anti-Morsi rallies are planned.

"June 30 is expected to be a big day, but it is not the only reason for investors to be worried,” Osama Mourad, an independent analyst and former chief executive of Arab Finance Brokerage told Ahram Online.

"The failure of the presidency in addressing the Ethiopian dam issue, as well as economic factors like the electricity crisis and liquidity shortage, have also affected the market," he added.

On Monday, all but one of the 30 stocks of the EGX30 fell.  Big-cap Orascom Telecom Holding (OT) lost 4.93 percent while Telecom Egypt and Commercial International Bank (Egypt) lost 2.4 percent and 4.05 percent respectively.

The real estate sector also showed heavy losses. SODIC lost 7.23 percent, United Housing & Development lost 6 percent and Palm Hills Development Company lost 6.9 percent.

Foreign investors were the only net-buyers in the session, while Arab and domestic investors closed as net-sellers.

The market might pick up amid opportunistic buying.

"When share price fall beneath their real price, the market investors normally buy," explained Mourad.

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