CAIRO: Egypt s leading stock index records declines across the board as investors react to US President Barack Obama s plan to curb risk-taking by banks.
The main index shed 3 percent, its sharpest one-day drop since mid-December, to 6,657 points. The secondary EGX 70 index fell 2.1 percent.
Obama s proposal to bar banks from owning, sponsoring or investing in hedge funds for proprietary profit was announced on Thursday and further roiled global markets on Friday, when the Egyptian market is closed.
(There is) fear that the hedge funds and private equity funds will have to sell their positions here, and nobody knows exactly how much is held, said Osama Mourad, CEO of Arab Finance Brokerage, adding that trading volumes did not indicate that foreign investors were deserting en masse.
Volumes were higher than the Sunday average, when foreigners are typically less active, but not as high as the mid-week average.
Blue chip stocks came under strong selling pressure as they are seen as most beholden to international trends. Orascom Telecom (OT) fell 6.4 percent, Orascom Construction dipped 3.6 percent and Commercial International Bank lost 3 percent.
OT said on Thursday its senior lenders granted the firm a waiver allowing it to proceed with an $800 million rights issue.
One of the few gainers was Media Production City, up 10.6 percent in heavy volume. Mourad said investors see it as a defensive stock and that its gain indicates further market declines are likely.
We can easily see two or three days of downside, he said.
The Egyptian stock market will be closed on Monday for a national holiday. -Reuters