CAIRO: The Egyptian stock market slid to its lowest close in almost four months on the start of the week, as banking stocks were still reeling after the government cancelled the sale of Banque du Caire, traders said. The bourse extended losses for five straight sessions since last Tuesday, shedding around 4.7 percent until yesterday's close. The index tumbled Sunday 1.02 percent to close at 9,967.36 points and continued its decline on Monday, shedding 1.41 percent to 9,827.28 points. Traders explained declines were mainly triggered by the indefinite postponement of Banque du Caire's auction. "On news of the bank's auction, investors heavily bought in banking stocks, said Moustafa Atteya, institutional trader at Pharos Securities. "People thought selling the bank would restructure the entire banking sector and [consequently] boost banking stocks on the market. Five foreign and regional banks started submitting final bids to buy up to 67 percent of Banque du Caire - Egypt's third-largest public bank - from the Egyptian government last Tuesday, in what was dubbed the largest privatization in Egypt since the sale of Bank of Alexandria in 2006. However, the government unexpectedly cancelled Wednesday the sale of the bank, saying bids were too low and did not reach the minimum price set by an evaluating committee. "When the sale got cancelled, short- and medium-term investors unloaded banking stocks, as the sector's restructuring process did not go through, Atteya explained. The postponement of the sale, he added, lowered expectations of valuations of other banks. Banking stocks received another blow when Moody's downgraded last Tuesday its assessment on five Egyptian banks from stable to negative. Most banking stocks led declines for two consecutive sessions this week. On Sunday, shares of Crédit Agricole Egypt posted their sharpest single-day drop in more than three months, plunging 6.28 percent to LE 17.90. The stock has lost about 15 percent since the government cancelled the sale of Banque du Caire. Shares of Commercial International Bank (CIB) - Egypt's largest lender by market value - slipped 3.44 percent to LE 83.71. Shares of the bank have lost about 5 percent of their value since Banque du Caire's sale was cancelled. Shares of regional investment bank EFG-Hermes also closed lower on Sunday, dropping 1.44 percent to end the day trading at LE 50.56. Blue-chip stocks also traded in the red on Sunday, with Orascom Construction Industries (OCI) shedding 0.24 percent to LE 375.72 per share. Sister company Orascom Telecom (OT) lost 0.4 percent to LE 33, while Al Ezz Steel Rebars sank 2.17 percent to LE 85.19. "The market is [generally] declining these days ahead of release of listed firms financial results, Atteya said. "Investors do not want to engage in aggressive buying until annual financial results are announced. Listed companies are due to release financial performance statements before the end of this week. "That's why, the current trend is either a sell or hold rather than buy, he clarified. On Monday, banking shares resumed their five-day losing streak, with Crédit Agricole Egypt leading declines for the second straight session this week. Shares of Egypt's third-largest bank by market value plummeted 3.74 percent to end the day trading at LE 17.52. Shares of EFG-Hermes followed the negative trend, falling 2.32 percent to LE 48. CIB also stumbled 1.81 percent to LE 81.81 percent, while National Société Générale Bank (NSGB) edged 2.11 percent down to LE 37.15. Traders recommend a buy or hold position on stock, as they are currently falling to attractive levels. "This is a buy or hold opportunity on the market, Atteya said. He expects the index to snap off its five-day losing streak before the end of this week. "The market will [recover] by Wednesday or Thursday, he added. "The index is now testing resistance at 9,800 points, and it could increase up to 10,500-10,800 points. At this level, we expect buying activities.
