After Putin summit, Trump says peace deal is best way to end Ukraine war    Schneider Electric Expands Youth Partnership with Enactus to Drive Inclusive Energy Transition in Egypt    China's Jiangsu Zhengyong to build $85m factory in Egypt's Ain Sokhna: SCZONE    Egyptian pound ticks up vs. US dollar at Thursday's close    Egypt condemns Israeli plan to build 3,400 settler homes in West Bank    Fitch Ratings: ASEAN Islamic finance set to surpass $1t by 2026-end    Egypt, Namibia explore closer pharmaceutical cooperation    Egypt, China ink $1bn agreement for Sailun tire plant in SCZONE    Renowned Egyptian novelist Sonallah Ibrahim dies at 88    Egypt's Electricity Minister discusses progress on Greece power link    Egypt's FM discusses Gaza, bilateral ties in calls with Saudi, South African counterparts    Egypt prepares to tackle seasonal air pollution in Nile Delta    27 Western countries issue joint call for unimpeded aid access to Gaza    Al-Sisi says any party thinking Egypt will neglect water rights is 'completely mistaken'    Egyptian, Ugandan Presidents open business forum to boost trade    Egypt's Sisi, Uganda's Museveni discuss boosting ties    Egypt's Sisi warns against unilateral Nile measures, reaffirms Egypt's water security stance    Egypt, Colombia discuss medical support for Palestinians injured in Gaza    Egypt, Huawei explore healthcare digital transformation cooperation    Global matcha market to surpass $7bn by 2030: Nutrition expert    Egypt's Sisi, Sudan's Idris discuss strategic ties, stability    Egypt's govt. issues licensing controls for used cooking oil activities    Egypt to inaugurate Grand Egyptian Museum on 1 November    Egypt, Uganda strengthen water cooperation, address Nile governance    Egypt's Sisi: Egypt is gateway for aid to Gaza, not displacement    Korean Cultural Centre in Cairo launches folk painting workshop    Greco-Roman rock-cut tombs unearthed in Egypt's Aswan    Egypt reveals heritage e-training portal    Sisi launches new support initiative for families of war, terrorism victims    Egypt expands e-ticketing to 110 heritage sites, adds self-service kiosks at Saqqara    Palm Hills Squash Open debuts with 48 international stars, $250,000 prize pool    On Sport to broadcast Pan Arab Golf Championship for Juniors and Ladies in Egypt    Golf Festival in Cairo to mark Arab Golf Federation's 50th anniversary    Germany among EU's priciest labour markets – official data    Paris Olympic gold '24 medals hit record value    A minute of silence for Egyptian sports    Russia says it's in sync with US, China, Pakistan on Taliban    It's a bit frustrating to draw at home: Real Madrid keeper after Villarreal game    Shoukry reviews with Guterres Egypt's efforts to achieve SDGs, promote human rights    Sudan says countries must cooperate on vaccines    Johnson & Johnson: Second shot boosts antibodies and protection against COVID-19    Egypt to tax bloggers, YouTubers    Egypt's FM asserts importance of stability in Libya, holding elections as scheduled    We mustn't lose touch: Muller after Bayern win in Bundesliga    Egypt records 36 new deaths from Covid-19, highest since mid June    Egypt sells $3 bln US-dollar dominated eurobonds    Gamal Hanafy's ceramic exhibition at Gezira Arts Centre is a must go    Italian Institute Director Davide Scalmani presents activities of the Cairo Institute for ITALIANA.IT platform    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



Political unrest expected to weigh heavier on the market
Published in Daily News Egypt on 01 - 12 - 2012


By Mahmoud Abdelhayy
EGX30 plummeted more than nine per cent on Sunday, 25 November. (DNE/ Mohamed Omar)
The Stock Exchange suffered a strong hit last week as clashes broke out in response to President Mohamed Morsy's decree granting himself sweeping new powers.
The main index EGX30 witnessed last Sunday the third biggest one-day decline ever as it plummeted more than 9 per cent. Over the entire week, the index sunk more than 11 per cent.
Analysts stated that the decree would have a negative impact on market performance. “We are back to square one, political and social unrest, clashes and so on,” Mohamed Radwan of Pharos Securities told Reuters.
Osama Mourad of Arab Finance Brokerage said “We're not the same Egypt. Investors know that Morsy decisions will not be accepted and that there will be clashes on the street," adding that the new decree has made it more risky to do business in Egypt.
“If an investor wants to appeal something in court he won't be able to, because all laws and regulations that come out of the presidency cannot be appealed,” he continued.
“The decree pits the executive and the judiciary branches against each other and splits the population in two." “Buying in this market doesn't make any sense considering the risk," Taymour El-Derini, Cairo-based director of Middle East and North Africa sales trading at Naeem Brokerage told Bloomberg.
A Bloomberg report showed on Monday that Egypt's benchmark stock index lost its rank as the world's best 2012 performer after political unrest pulled the index down in the worst drop since the 2011 revolution.
On Tuesday the index eased as a spokeswoman told Bloomberg that The International Monetary Fund's board will require no major change in economic outlook or policy in the next meeting when it considers approving a $4.8 billion loan to Egypt.
A Reuters report revealed that last week's decline in the Egyptian stock market underlined a major risk, it is facing heavy sell-off transactions by jittery local individual investors, despite that the longer-term economic condition looks positive.
Many analysts said the current political conflict might not impact Egypt's improving economic picture, as investment and growth are getting better since the turmoil of 2011 revolution.
“If the political side of things starts to dissipate, which is possible in Egypt because you've seen volatility there, then you'll see a lot of people who missed the early-year rally come in to buy,” said Akber Naqvi, hedge fund portfolio manager at Dubai-based Al-Masah Capital.
Fadi Al-Said, Dubai-based head of investments at ING Investment Management, said the Egyptian market, which remains up 33 per cent since the end of 2011, had risen too fast this year, so he would not rush to buy.
But he added: “Having said that, there are some companies that corrected well and it's a good opportunity to dip your toes in – with the perception that if things get worse, it's a chance to buy even more at lower prices.”
When asked about his expectations for the market next week, Ahmed El-Otify, investment manager at the Roots Holding Company for Financial Investments, stated, “This is very hard question to answer as the current political condition is vague.”
“What will happen after today's march, shall we see any announcement about the constitution?" he wondered.
“Orascom Construction Industries' delay in getting approval from Egyptian Financial Supervisory Authority about splitting construction and fertilizer activities would have a negative impact on the index”, he added.
On the other hand, he stated that “We are waiting for positive news like NSGB or EFG-Hermes deals”.
Finally, El-Otify advised investors not to be hasty in making decision, adding that it is the perfect timing for institution to buy stocks”
“Market performance will depend on the consequences of today's march, if it goes peacefully the index will witness a slight retreat but if it doesn't, the index will suffer severe decline," said a financial analyst at EFG-Hermes, Wael Ziada.


Clic here to read the story from its source.