Market Report: Camping Tahrir, higher tension
Ahram Online, Monday 18 Jul 2011
New cabinet appointments fail to end Egyptian protests and prompt a rush for the exit by investors, pulling the main index down 1.38 per cent

The spectre of Tahrir protests rumbling on despite a cabinet reshuffle combined with a downturn in world markets to hobble Egypt's stock benchmark on Monday after several days of gains.

The EGX30 finished down 1.38 per cent at 5,174.8 points, its first drop since 12 July when it fell to its lowest level in two months.

"The Bourse's performance will continue to be shaky as long as protests persist," says Ramy El-Agamy, manager of institution sales and brokerage at NBK Capital.

All market sectors either slipped or failed to advance; from 176 listed stocks, 36 gained and 131 declined, with the broader EGX70 dipping 1.18 per cent. Total market turnover was LE400.6 million, slightly down from its post-March average.

Prime Minister Essam Sharaf's appointment of 14 new ministers was a clear attempt to quell countrywide demonstrations spurred by anger at what they see as military-ruled Egypt's slow pace of reform and justice.

But protesters' subsequent refusal to leave the Tahrir Square sit-in established on 8 July has raised the danger of a police or army crackdown, believe some, the prospect of which has driven investors away.

"We saw definite selling pressure from the political problems leading to uncertainty," says Walaa Hazem, asset manager at HC Securities. "Yesterday there were glimpses of hope but the process of is not finished and the new government hasn't yet been formed. "

Hazem notes an absence of major economic news to drive interest in specific shares but says the faltering performance of global equity markets also affected the Bourse.

European shares fell to a four-month closing low on Monday, led by banks on worries this week's eurozone meeting would fail to agree a second bailout package for Greece and concerns that the latest bank stress tests were unrealistic.

Across the Atlantic, the Dow Jones lost 0.64 per cent shortly after opening as the US faced a potential debt downgrade.

Egypt trading showed plenty of profit-taking at work too, following Sunday's 3.74 per cent surge which saw some shares gain by the current maximum of 10 per cent.

Investment bank Pioneer Holdings saw the most activity, with turnover reaching LE33.7 million and shares closing up 1.89 per cent.

Travel and leisure and the banking sector stomached the biggest losses, pulled down by TransOcean Tours, down 5.56 per cent, and high-cap Beltone Financial Holding, down 3.99 per cent.

Highest gainers were El Watany Bank of Egypt, up 6.68 per cent, and Kafr El Zeyat Pesticides, up 6.78 per cent.

Foreigners upped their market share as the working week began, choosing to offload some LE33.27 million of stock. Egyptians and other Arabs were, by contrast, net-buyers of LE23.3 million and LE9.93 million respectively.