Egypt’s stock market finished Tuesday with a 1.12 per cent decline, in what analysts see as a result of a foreigner rally to sell heavyweights excluded from Morgan Stanley's index.
The benchmark EGX30 declined to 5,527.49 points after foreigners net-sold a total of LE15.4 million.
"Today's decline was due to selling pressure by foreigners on the stock market heavyweights El Ezz Steel and El Sewedy Electric," says Ashraf Abdel Aziz, head of institutions sales at Arabia Online. "Foreigners have lost their interest in these shares after they were excluded from Morgan Stanley's index."
El Ezz Steel and El Sewedy Electric were among the day's top decliners, losing 6.89 per cent and 3.17 per cent respectively.
Morgan Stanley Capital International (MSCI) on 18 May made a biannual revision of constituents for the MSCI Global Standard Indices, deleting El Ezz Steel and El Sewedy Electric from its MSCI Egypt Index.
"Foreigner reactions to the MSCI started today and that resulted in the huge selling turnover in both companies," says Abdel Aziz.
Foreign traders made a strong showing, representing nearly 48 per cent of the market -- double the average of the previous two weeks. Egyptians, on the other hand, were net-buyers, making up 46 per cent of the total.
Of 183 listed stocks, 102 declined and 73 gained in LE890.7 million worth of stock trades, with all sectors ending in the red except personal and household products, food and beverages and financial services excluding banks.
Abdel Aziz, however, sees the drop as positive.
"Today's decline was very healthy," he says, "because [it] was balanced between different shares according to their performance through the week."
"Accordingly, you'll find heavyweights like PHD and TMG declining as a natural rebound from last week's rise," he adds.
Real estate was down, with the sector's heavyweight Palm Hills Development (PHD) one of the top decliners, falling 3.95 per cent.