CAIRO: Egypt saw its stock market plunge into a bear market on Monday as the country's political turmoil increased into uncertainty as Muslim Brotherhood candidate Mohamed Morsi claimed victory in the presidential run-off completed Sunday evening. According to reports from the exchange, dollar bonds dropped markedly after the military junta in the country took near complete control over the country, including many of the powers of the newly elected president and all of the legislative branch. Three-month bill yields jumped to a record, Bloomberg news agency reported. The benchmark EGX30 Index (EGX30) slumped 3.4 percent to 4,267.87 at the 2:30 p.m. close in Cairo, the lowest level in almost five months. The gauge retreated more than 20 percent from the peak of 5,452.03 on March 7, signaling a bear market to some investors. Orascom Construction Industries (OCIC) lost the most in more than eight months. The yield on the 5.75 percent dollar bonds due April 2020 climbed 12 basis points, or 0.12 percentage point, to 7.02 percent, the highest in four weeks, according to data compiled by Bloomberg. The turmoil on the stock market comes as the military council issued a new constitutional declaration that ostensibly sees it continue its iron grasp on the country, making it the sole authority over the country's political, social and economic affairs, including the budget and personnel. It also took control of a new constituent assembly to draft a new constitution, granting itself the power to name the 100-member committee. The junta can also object to any articles drafted in the new constitution it believes are “counter to national security interests." The market is down “on the back of the military's announcement, which puts Egypt in an open-ended transition period," said Wafik Dawood, director of institutional sales desk at Cairo-based Mega Investments Securities, Bloomberg quoted. Activists and political leaders in the country say the new declaration is tantamount to a military coup and have vowed to take action to end the military's rule over the country. For its part, the military junta did say on Monday that it will hand over some power to the president on June 30.
