CAIRO: Egypt’s benchmark index EGX30 tumbled by the biggest daily amount in five months, hurt by the Greek debt crisis and Algeria’s announcement it is prepared to buy all of Orascom Telecom’s Algerian unit.
The index falls 5 percent, its biggest daily decline since Nov. 30 to 6,756 points, its lowest level since March. All index 30 constituents barring one close in the red.
"Today’s sell-off is simply tracking global market sentiments amid the Greek crisis," says Osama Mourad of Arab Finance Brokerage.
Governments around the world tried to calm markets after fears about Greece’s debt crisis spread further. The cost of protecting European bank debt against default reached levels not seen since the height of 2009’s economic crisis.
Index heavyweight Orascom Telecom slid 4 percent, touching its steepest intra-day loss since December.
Investors are concerned that the Algerian government is not prepared to pay as high a price as Orascom would have secured ahead a deal that was working on with South Africa’s MTN gone through.
Blue chip Orascom Construction shed 4.5 percent and Commercial International Bank dropped 6.5 percent.
Traders say investors believe a move by the European Central Bank to support Greece and other debt-laden Eurozone countries may boost shares this week.
"The Egypt market will recover early this week due to the European support of the Eurozone and its markets," Mourad says.
"The market will open flat tomorrow, then will move to positive territory and recover on Tuesday."