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Market Report: Egypt's bourse falls by 4.77 per cent amid fears that it might be shut Egypt's bourse benchmark EGX30 fell by 4.77 per cent and further decline is expected
"It is possible the market could be shut again," was the first comment of Taymour El-Derini from Naeem Holding Ahram Online asked him about his expectations for Egypt's stock market, recalling what happened in January of this year when trading was suspended for more than a full month. The benchmark indices EGX30 lost 4.77 per cent on Tuesday, at 3,732.81 points, on the back of police violence and big demonstrations in Tahrir Square and other places all over Egypt. Added to Monday's losses, Egypt's bourse tumbled by around 9 per cent in two days. Trading was suspended for one hour but this didn't put the brakes on the market's decline. "Trading today was supposed to be halted for 30 minutes; it was actually stopped for an hour," said El-Derini. However, El-Derini expects further decline. "We are far from the bottom - the market has another 16 to 20 per cent to lose," he believes. All sectors were in the red; apart from five sectors which remained unchanged, no sector displayed a positive trend. Of 181 listed stocks today, 173 lost, four gained and four remained unchanged. Talaat Moustafa Group (TMG) is the only share of EGX30 that gained, increasing by 0.63 per cent after an Egyptian court ruled on Tuesday that TMG's land contract for its Madinaty construction project is valid, signalling an end to a long-running legal battle over the US$3 billion scheme. Orascom Construction Industries (OCI), the highest market cap, lost 4.43 per cent. "OCI is holding up the market - it's a great company that has just reported great results. But if OCI starts going down seriously then the market will plunge," warns El-Derini. Other blue chips like Telecom Egypt, Orascom Telecom and Commercial International Bank (Egypt) were at 3.47, 5.42 and 5.06 respectively. Like yesterday, low-cap stocks took the biggest hit with many losing more than 9 per cent. Egyptians and Arabs were net buyers while foreigners were net sellers. Individuals, mainly Egyptians, were net buyers while institutions were net sellers. "A lot of fund managers have to sell because of what's happening politically. Every fund has its own set of rules regarding when it has to sell," explained El-Derini. The EGX70 lost 6.43 per cent and the EGX100 lost 5.54 per cent.
