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Egypt’s markets see unexpected drop

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Stock indices register a slump for second working day since constitutional referendum, after hitting three-year high last week

Dealers are seen at the Egyptian stock exchange market in Cairo. Only seven stocks rose, 156 fell and nine remained unchanged Photo by Mohamed Omar

Stock market indices recorded an unexpected drop on Sunday, the first day after the passing of the new draft constitution, and after having hit a three-year high on 14 January, the first day of draft’s referendum.
(DNE File Photo)

Stock market indices recorded an unexpected drop on Sunday, the first day after the passing of the new draft constitution, and after having hit a three-year high on 14 January, the first day of draft’s referendum.

This is the second slump since 6 January, with the first fall registered on 16 January, one day after the two-day referendum.

The main index, the EGX-30, deteriorated by 1.96% to close at 7003.2 points after reaching its highest level since 2011 last week, breaking through 7200 points.

Financial analyst at HC Trading Company Mohamed Saeed attributed the drop to parallel declines in international and emerging markets.

Egypt was spared such downward trends at the beginning of the year, Saeed said. “Surviving a fall in the early days doesn’t mean we will [always] be separated from international market movements,” he added.

Saeed denied any link between the referendum’s passing of the constitution and the market decline, noting that investors usually buy and sell shares intensively before major events, “and when the event is occurring, they become cautious.”

The EGX-70 Index, which encompasses small and medium sized companies, also witnessed a 1.49% decrease, recording 555.94 points.

Meanwhile, the broader EGX-100 Index slumped by 1.44%, registering 945.14 points. The capped index EGX-20 significantly dropped by 2.04%, closing at 8224.89 points.

According to a report issued by the Egyptian bourse earlier this month, its main index hiked by 43% in the second half of 2013.


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