Daily News Egypt

'Bloody Sunday' takes Egypt's bourse by storm, with 432 point dip - Daily News Egypt

Advertising Area




Advertising Area



'Bloody Sunday' takes Egypt's bourse by storm, with 432 point dip

CAIRO: The Egyptian stock market flashed the red alert at the start of this week, plummeting 5.65 percent in two days, signaling a downhill tumble that could last all summer, traders said. “The market looks really bad. It has turned bearish with the global market downturn, explained Karim Hosny, trader at Pharos Brokerage. “It plunged …


CAIRO: The Egyptian stock market flashed the red alert at the start of this week, plummeting 5.65 percent in two days, signaling a downhill tumble that could last all summer, traders said.

“The market looks really bad. It has turned bearish with the global market downturn, explained Karim Hosny, trader at Pharos Brokerage. “It plunged 423 points on Sunday, in what [could be] its sharpest single-day decline since January.

The bourse extended its losing streak on Monday, slipping 1.4 percent to 9,413.82 points, as investors abstained from buying. “The [week’s] collapse had a ripple effect on almost all CASE-listed stocks, which also declined, Hosny explained.

Egypt’s benchmark CASE 30 Index sank on Sunday a hefty 4.25 percent to close at 9526.91 points on a low turnover of LE 1.1 billion ($202.6 million), recording its biggest one-day collapse since Jan. 21.

According to sources at the bourse, Sunday’s session swarmed with panic, as investors dubbed it “Bloody Sunday. The stock movement bar glittered red all over, indicating stocks were sagging across the board, Hosny pointed out.

“The bourse fell with international markets downfall. Global markets are shaky and there is uncertainty in almost all markets, which is coupled with high inflation rates, he added. “Plus, the oil prices are rising to record highs.

According to Reuters, a global sell-off knocked world shares to a five-month low on Thursday as surging oil prices fanned concerns about inflation and slowing growth, ahead of an expected euro zone interest rate hike and a key US jobs report.

“This has led investors to hedge their loss in emerging markets such as Turkey and Egypt, Hosny stated. “There is a negative sentiment from foreigners on Egypt in general.

He clarified that foreigners were wary of the market since the government decided last May to hike gasoline and energy prices for energy-intensive industries. “Last May’s decision scared foreign investors off, and [since then] the trend has been ‘reduce Egypt, avoid Egypt’.

When foreign investors pulled out of the market, he added, retailers panicked and started selling stocks.

Index heavyweights Orascom Telecom (OT) and Orascom Construction Industries (OCI) led declines on Sunday. Shares of the region’s largest operator OT sank 8.22 percent to LE 64.23 on a turnover of LE 35.47.

“The stock slipped after its GDRs [global depositary receipts] in London fell on Friday, Hosny said.

OT has been hit by selling on its GDRs in London, which lost 3.6 percent to $59.27 at close of trade on Friday.

Similarly, construction conglomerate OCI dipped 3.98 percent to LE 361.82 on a turnover of LE 11.9 million. Its GDRs in London edged 0.6 percent down to $134.90 on Friday.

“These two stock are market leaders that directly affect the index, Hosny stated. “They are the biggest constituents on the index. When they go down, the index goes down; and when they go up, the index goes up.

Both stocks together constitute almost 50 percent of the CASE 30 index.Regional investment bank EFG-Hermes also saw its shares close in the red, shedding 4.5 percent to LE 46.03, while Ezz Steel stumbled 4.7 percent to LE 76.03. Commercial International Bank (CIB) dropped 2.66 percent to LE 77.58.

Almost all stocks closed in the red on Monday, with OT leading declines for the third consecutive day. The stock retreated 1.12 percent to LE 64.23, while CIB dipped 2.22 percent to LE 75.86.

Other big caps suffered with EFG-Hermes falling 1.2 percent to LE 46, and El Ezz Steel sinking 4.9 percent to LE 73.01.

“Even Pioneers Holding that has been performing well since [its private placement] also fell on Monday, Hosny pointed out.

The stock – which listed late June – lost 0.47 percent on Monday to close the day trading at LE 27.48. The stock managed to attract investors for eight consecutive sessions.

Hosny does not expect any market rebound soon and foresees a bearish trend all summer long. “I’ll be glad if the market retains sideways.

He advises investors to buy in “defensive stocks with high dividend yields such as MobiNil, Alexandria Mineral Oils Company (AMOC), and Egyptian International Pharmaceuticals (EPICO).

“These defensive stocks cling whenever the market goes down, he explained. “For instance, no matter how low the market goes, pharmaceutical stocks do not fall sharply because people will always continue to buy medications.

Topics: FJP

Advertising Area

Advertising Area



https://www.dailynewsegypt.com/2008/07/07/bloody-sunday-takes-egypts-bourse-by-storm-with-432-point-dip/
Breaking News

No current breaking news

Daily News Egypt Android App Available for free download on Google play
View
Daily News Egypt Ios App Available for free download on APP Store
View
Social Media Auto Publish Powered By : XYZScripts.com