CAIRO: Egypt’s benchmark EGX 30 index ended Thursday 2.22 percent lower after deadly clashes at Port Said football match left 73 people dead on Wednesday.
The broader EGX 70 fell 3.47 percent while the EGX 100 fell 2.82 percent, bucking the upward trend the market witnessed at the end of January.
“The issue has to do with the fact that there is no political will from the current rulers. It is obvious that they do not want the country to have a smooth transition,” Monette Doss, senior analyst at Prime Group, said.
She added that lack of “political will” is seen in the process of delayed trials for those accused of killing protesters in the January uprising which toppled Hosni Mubarak in 2011.
Doss, among several experts has pointed out that the stock market and the economy will continue to reflect the political situation in the country.
With the lack of security across Egypt threatening the lives of citizens, the tourism sector will continue to take a hit, experts say.
Making up more than 11 percent of the country’s GDP, the tourism industry is needed in order to boost the country’s foreign reserves, which were last reported in December to be at $18.1 billion, and are declining at a rate of almost $2 billion a month.
“There is a state, and in this state there is a government, this government must return security to the country,” said Elhamy El-Zayat, head of the Egyptian Tourism Federation.
“I am a tax-paying citizen, the state is supposed to keep me safe and keep the country safe, [if] I cannot even walk in the street, how will tourists? Unfortunately, without security no tourists will want to come to Egypt now, we can forget about this,” he stressed.
All sectors on the market dropped on Thursday, except for telecommunications, which is currently the only booming industry. The real estate sector, along with banking, financial services and tourism, which all took a hit over the past year, fell again on Thursday after seeing some growth early this month.
Analysts have reiterated that sectors that are seen as “long-term” investments, such as real estate, would continue to suffer as the political situation remains unstable and the country’s interim de facto military rulers fail to bring back security.
“The risk factor put on Egypt doesn’t change, the concern is already there at the macro level,” said Tarik Salama, a financial consultant, referring to several credit downgrades the country continued to witness over the past year.
In Thursday’s trading session, Egyptians were responsible for about 76 percent of the activity, while non-Arab foreign investors made up 15.01 percent, and Arab investors made up 8.94 percent.
In January, after the country’s Jan. 25 anniversary peacefully passed, non-Arab foreign investors made up more than 20 percent of trading, increasing their activity noticeably since last year.
Individuals also made up 69.09 percent of trading, while institutions contributed to 30.90 percent.
With a 26.63 percent growth overall for the past month, the main index’s “shocking” surge was said to be abnormal market behavior, according to financial analysts.
“This increase was not expected to resume while the political and security situation in Egypt is unstable,” said Doss.
Over the past week, a series of armed robberies abruptly spread across the country leaving one French tourist dead after he was robbed in front of an exchange office in the Red Sea resort city of Sharm El-Sheikh.
An HSBC bank in the New Cairo district was also robbed, when unknown attackers left some customers and employees injured, taking LE 1 million from the bank.
The latest news from Wednesday was largely blamed on the ruling military council and the lack of security, attributed to ignoring calls for interior ministry reform. In an emergency session held by parliament, several MPs called on the military council to hand over power, and called for holding accountable the responsible ministers as well as the army generals running the country.
“Security has always been there, but the government in Egypt always likes to give the impression that if they let go of the country, chaos will spread,” said Salama.
“What is worrying is that people don’t follow the law anymore because it is not being applied.”
