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Egypt's stocks unexpectedly dip on new PM announcement Appointment of former irrigation minister Hisham Kandil as Egypt's premier impacts markets negatively as investors expected 'senior' politician with economics background
Egyptians stocks fell one per cent to close at 4.819 points on Tuesday, the second operative day for the market in Ramadan. The appointment of long-awaited prime ministerdid not have a positive effect on the market, which began falling in early trading and continued following that trend through the day. After weeks of speculation, President Mohamed Morsi appointed Hisham Kandil, former minister of irrigation and water resources, as his new prime minister, in a move that surprised many observers. It was widely expected that Egypt's premier would be a liberal politician with a background in economics, as some members of the Freedom and Justice Party had previously revealed, particularly as many contenders fitting this criteria had met with Morsi in the run up to Tuesday's announcement. "The market was performing well until the investors found out about the new prime minister as he was not among the expected candidates for the senior position," says Ashraf Abdel-Aziz, head of institutional sales at Arabeya OnlineBrokerage company. Abdel-Aziz affirmed that most investors anticipated that the newly appointed prime minister would be a more "experienced" politician with a greater knowledge of the markets. Total turnover was higher than recent averages at LE529 million ($88 million), approximately the highest in July. Orascom Telecom Media and Technology (OTMT) topped the market in terms of trading volume with LE106 million (20 per cent of the total trade value). OTMT shares soared by 6.38 per cent over the course of the day. Further behind was fellow high-cap Orascom Construction Industries (OCI), which saw a turnover of around LE58.8 million but its share price slipped 0.56 per cent. Out of 170 traded stocks, 47 gained in value, 97 lost and 26 remained unchanged. Egyptian investors and Arabs closed as net buyers recording net flow of LE123.89 million and LE4.13million respectively as opposed to non-Arab foreigners that closed as the only net sellers. The boarder index EGX70 lost 0.38 per cent.
