Market Report: Fears of Friday violence hobble Egyptian stocks

The main index drops 2.17 per cent as the upcoming protests prompt anxiety among investors

With the likelihood growing of unrest returning to the nation's streets, Egypt's EGX30 stock benchmark dropped 2.17 per cent on Wednesday to reach 5,320 points.
The trading board was flooded in red, with 165 out of 182 traded shares declining in value. Only 11 shares finished in the green, each showing modest growth.
"The calls for protests on Friday has caused a general atmosphere of anxiety and uncertainty among investors," says Issa Fathy, vice president of the securities division at the Chamber of Commerce.
Various political groups are planning to stage mass demonstrations on 8 July, on what is labelled 'Persistence Friday'.
Clashes have already erupted between protestors and the police in the port city of Suez after a Cairo court refused an appeal to reverse the release of police officers accused of killing protesters on 25 and 28 January.
The broader index EGX70, witnessed an even deeper plunge, finishing 2.95 per cent down.
"The EGX70 represents trading of individuals. It is obvious they're cashing out some of their investment before an expected fall on Sunday after the Friday protests," explains Ashraf Abdel Aziz, head of institution sales at Arabia Online Securities.
All sectors sustained heavy losses, with tourism, basic resources and real estate the major decliners, losing 4.79 per cent, 4.16 per cent and 3.84 per cent respectively.
Major stocks like Orascom Construction (OCI), Telecom Egypt, Orascom Telecom and the Commerical International Bank all finished in the red.
OCI's 1.86 per cent decline to a share value of LE 269.23 came despite two positive pieces of news over the past couple of days.
"This is a critical indicator. When a company such as OCI does not react to positive news, it signifies investors' trust is deeply wounded," says Abdel Aziz.
On Wednesday, OCI announced that its Saudi Arabian subsidiary has been awarded infrastructure work in the Kingdom worth US$450 million.
This came after Monday's announcement that the World Bank's International Finance Corporation (IFC) was considering debt and equity investments in the company worth $350 million.
Fathy believes good news won't have much impact on market performance until the country proves stable and secure for a significant period. "Every week there's some form of unrest in Egypt. You can't expect the market to grow in such an atmosphere," he says.
Trading volume was around the post-revolution average, hitting LE 469 million, with OCI taking up around 10 per cent of turnover.
Even Palm Hills Development (PHD), which drove the exchange upwards on Tuesday when it gained 7.29 per cent after the acquittal of its chairman on corruption charges, reversed its direction during Wednesday's troubled session. It finished down 2.79 per cent.
The Al-Mal daily newspaper reported that 210 feddans would be confiscated from PHD due to delays in building. The company later denied the report but the damage to its stock price had already been done.