Market Report: Egypt stocks plunge on global and domestic turmoil

A sluggish world economy comes on top of political woes to push Egypt's troubled Bourse to a new 2-month low

Egypt's EGX30 stock benchmark picked up at the end of the trading day after bottoming out at 4,939points at around one o'clock.
But that wasn't enough to save it from heavy losses.The Bourse dropped 2.82 per cent of its value on Tuesday to reach 4,971 points, its lowest level in two months.
The struggling exchange, which has plunged 30.39 per cent since the beginning of 2011, is reacting adversely to Egyptian political unrest as well as economic turbulence in Europe and the United States.
“The Bourse rebounded at the end of the session after the SCAF [Supreme Council of the Armed Forces]statement, and investors are feeling stability again,” says Ashraf Abdel Aziz, head of institution sales at Arabia Online Securities.
The statement from Egypt's ruling military gave a guarantee that the role of Islamist groups would be limited during the drafting a new constitution.
The midweek session reflected continued anxiety about political instability. “The main reason for consecutive drops was the ‘no' answer from the SCAF to Egypt's protests," adds Abdel Aziz.
The broader EGX70 witnessed a sharper decline of 3.53 per cent, adding to a total 19 per cent decline since the beginning of this year.
Aside from the million man march planned today in Tahrir Square, Egypt has been swept with what could be generously described as unease over the past 24 hours.
A pipeline carrying natural gas to Jordan and Israel had hardly been repaired from damage sustained during a bomb attack on 4 July when it was targeted again in the early hours of Tuesday.
The morning's episode was the fourth in a string of attacks on natural gas pipelines that supply Israel.
Up north reports circulated that protesters had shut down the stock exchange's branch in Alexandria, Egypt's second largest city. Bourse officials denied the news but later reports confirmed that hundreds of citizens had tried to block operations.
Out of 189 traded shares 177 finished in the red, while only 8 increased by meagre amounts. All sectors, except for chemicals, which grew 0.1 per cent, ended down.
Foreign markets have added to the Bourse's woes, demonstrated by a strong tide of foreigner sales, which amounted to 38 per cent of the total LE605 turnover.
All major market indicators across the world continued to trade in the red Tuesday. US stocks suffered their worst day in nearly a month on Monday as concerns grew about the stalemate in US budget talks and growing debt problems in the eurozone.
Euro indicators also plummeted as investors worried the debt crisis that forced bailouts for Greece, Ireland and Portugal could spread to larger economies like Italy, which has one of the world's largest public debts.
Markets in the region were no different, with 10 exchanges in the Middle East finishing in the red, including Saudi Arabia, Qatar, Dubai and Abu Dhabi.
Shares in the Commercial International Bank (CIB) were most affected at the beginning of the session, losing 9 per cent of their value and pulling the whole market down.
"Commercial International Bank is one of the basic shares, which brought the main index down due to its large trading volume of 4.8 million shares," says Abdel Aziz.