CAIRO: Egypt s main stock index dipped sharply in early trade before paring some losses to close down more than 2 percent on Thursday, eclipsing two days of gains as it followed global markets lower, traders said. Regional and international volatility has buffeted the Egyptian market in recent weeks and months, with the wholesale exit of foreign investors leaving many companies undervalued. The market opened lower based on New York trading, but then people bought back in on a renewed fundamental view of the market, said Hashem Ghoneim, chief executive of El Nour Securities. A second broker said investors were reassessing the effect any slowdown in global demand may have on Egyptian growth. The fundamentals are deteriorating, and many sectors are affected by the global situation, said Mohamed Seddieq from Prime Securities, citing construction, steel and cement stocks as particularly vulnerable. Before the crash, everything was undervalued. Right now everyone is changing his assumptions, Seddieq said. Heavyweight Orascom Construction Industries (OCI) dipped 1.48 percent to LE 197.00 ($35.61), after EFG-Hermes downgraded OCI s long-term fair value appraisal by 26 percent to LE 310.40. However, the investment bank kept a buy rating on the stock, saying further falls would make the share price attractive. Other big cap stocks also suffered, with Orascom Telecom shedding 5.76 percent to LE 35.98 and EFG-Hermes down 3.07 percent to LE 23.69. Ezz Steel slipped 0.45 percent to LE 11.08, and Commercial International Bank ended 1.33 percent higher at LE 32.65. The benchmark CASE 30 index closed 2.08 percent lower at 5,243.20 points, after earlier trading as low as 5,085.60 points, while the rival Hermes index dipped 1.76 percent to 473.13 points. The broader CIBC index, which gives equal weight to 100 smaller cap companies, gained 2.25 percent to 299.77 points. Two brokers said strong performances from textiles companies including Nile Cotton Ginning, up more than 13 percent, and garment retailer Arafa Holdings, up 5.63 percent, as well as gains in smaller construction firms, had boosted that index without affecting the benchmark s decline. Local investors remain the driving force in the market, with net buying to the value of LE 40 million, with much of that activity coming from retail investors.
