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Egyptian stocks fall on clashes, lack of govt economic plan

Egypt's main index drops 0.58 percent on Monday as investors unnerved by continued nationwide clashes and absence of clear economic programme from new cabinet

Ahram Online, Monday 29 Jul 2013
Egypt stocks fall with continuing clashes and lack of clear economic programme
An interior view of the Egyptian stock market is seen in Cairo (Photo: Reuters)

Egypt's main index was in the red once more on Monday, sliding 0.58 percent to sit at 5,286 points after continuing violence.

Clashes between loyalists of Egypt's ousted Islamist president Mohamed Morsi and other residents in Port Said on Sunday left three dead, state news agency MENA said.

On Monday morning, one conscript was killed and eight were injured in an attack targeting Al-Saha military camp in Sinai's Rafah.

"These events' impact on the market is relative, however," capital markets expert Mostafa Badra told Ahram Online. "The main factor influencing investors is the absence of a clear economic vision from the new government which would reassure investors and counter-balance these events."

Egypt's interim cabinet, led by liberal economist Hazem El-Beblawi, was sworn in less than two weeks ago, after the country's military ousted Mohamed Morsi on 3 July following nationwide protests.

The new government faces formidable economic challenges, including a ballooning budget which hit 11.8 percent of Gross Domestic Product in the first 11 months of the 2012/13 fiscal year, domestic debt which has surpassed 80 percent of GDP, foreign reserves which have fallen nearly 59 percent in over two years of political turmoil, and a local currency which has lost some 22 percent of its value against the dollar.

Egyptian and Arab investors were net buyers on Monday, while other foreigners net-sold LE4.7 million worth of shares. Turnover of listed stocks was at LE193.6 million.

The majority of EGX30 stocks declined, with property shares TMG Holding and Palm Hills Development Company dropping 0.84 percent and 0.41 percent respectively.

Orascom Construction Industries, over 97 percent of which was recently acquired by Dutch parent company OCI NV and is due to be de-listed from the main index, fell 2.1 percent.

Orascom Telecom fell 0.67 percent and investment bank Egyptian Financial Group-Hermes Holding Company slid 0.45 percent.

Commercial International Bank, however, rose 0.14 percent, along with real estate main player Six of October Development & Investment (SODIC), which gained 0.26 percent.

The broader EGX70 dropped 0.11 percent.

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