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Egypt's stock exchange tumbles to new low

CAIRO: Egypt s bourse rang the distress bell for two consecutive days this week – plunging 4.21 percent – after shares of both Orascoms dragged the benchmark stock index to a year low. On Tuesday, Egypt s benchmark CASE 30 Index shed a heavy 3.6 percent to 9,191.81 points, its lowest close since November 8, …


CAIRO: Egypt s bourse rang the distress bell for two consecutive days this week – plunging 4.21 percent – after shares of both Orascoms dragged the benchmark stock index to a year low.

On Tuesday, Egypt s benchmark CASE 30 Index shed a heavy 3.6 percent to 9,191.81 points, its lowest close since November 8, 2007, on a moderate turnover of LE 1.1 billion ($203.1 million).

Shares of Orascom Telecom (OT) – Egypt s largest mobile operator – posted their sharpest daily drop in at least a year on wary of its growth plans in Canada. The stock plummeted 7.19 percent to LE 54.61.

A lot of investors are worried about OT s decision to venture into Canada, said Mohamed Radwan, a trader at Pharos Securities.

The firm – which operates in six developing markets – said last week it was part of a consortium that won a license for a wireless spectrum in Canada. The company explained it eyed countries with large populations and low penetration rates.

The negative trend in OT pulled most of the index heavyweights and blue-chips down, Radwan explained.

Shares of sister company Orascom Construction Industries (OCI) also closed in the red, stumbling 3.23 percent to LE388.88. Both stocks together constitute almost 50 percent of the CASE 30 index.

Shares of El Sewedy Cables – Egypt s largest maker of electrical equipment – sank 5.98 percent to LE 146, their first decline in five sessions, while shares of Al Ezz Steel tumbled 3.84 percent to LE20.76.

Shares were falling across the board, Radwan added.

Shares of regional investment bank EFG-Hermes also slipped 2.73 percent to LE 46.71.

Muddying the water were declines in European and US stocks, which triggered selling in Egypt, Radwan explained.

The negative mood in global equity markets negatively impacts the market here, he added.

Appetite for emerging markets was thin on Tuesday, as foreign investors sidestepped these markets.

The bourse extended losses on Wednesday, with the index retreating 0.63 percent to 9,134.08 points, sinking to a fresh closing year low. The market has been witnessing this bearish trend for almost two months, Radwan pointed out.

He cited record high inflation rates that peaked as a result of the government s decision in May to hike gasoline and energy prices for energy-intensive industries. Stocks have been falling since then, he explained.

Selling pressure resumed on Wednesday, with shares of OCI losing 0.23 percent to LE 388. Commercial International Bank (CIB) – Egypt s largest lender by market value – dipped 2.54 percent to LE 72.50. Shares of Al Ezz Steel – Egypt s largest steel company by sales – fell 0.49 percent to LE 75.

Bucking the downtrend were shares of index heavyweight OT that bounced back from its previous year-low after falling to attractive levels. The stock climbed 1.24 percent to LE 56.35. The turnaround in the stock helped soften the market s slide on Wednesday. Investment bank EFG-Hermes also closed in the green, gaining 0.41 percent to LE 46.90.

Shares in the Egyptian Financial and Industrial Company (EFIC) inched 0.69 percent higher to LE 355 after posting a 69 percent rise in pre-tax profit for the first half of the year.

Topics: FJP

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https://www.dailynewsegypt.com/2008/07/30/egypts-stock-exchange-tumbles-to-new-low/
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