CAIRO - Egypt's main index shed 59.7 points on Sunday as Arabs were driven by a profit-taking sentiment, kicking off the year 2011 down 0.84 per cent, traders said. Arabs made net sell-offs worth LE78.8 million ($13.6 million), they added. Locals and non-Arabs made net purchases worth LE35.1 million and LE43.7 million respectively. The North African country's benchmark index EGX 30 ended 2010 roughly 15 per cent higher than the previous year, according to the Egyptian Exchange. The EGX 70, which measures 70 of the country's small and mid caps, jumped by 2.74 per cent to 741.31 points. Volume hit LE575.7 million, according to the Egyptian Exchange. Commercial International Bank (CIB) plunged by 2.13 per cent to LE46.39 per share, they added. Orascom Construction Industries fell by 0.72 per cent to LE285.04 per share. Orascom Telecom, the largest Arab mobile operator by subscribers, shed 1.39 per cent to LE4.26 per share. Heliopolis Housing climbed 3.57 per cent to LE25.82 per share. Globally, US Treasuries are seen to struggle to replicate last year's relatively strong returns in 2011 if the economy grows as much as some expect, as riskier assets could continue to outperform the government debt, Reuters reported. US government debt may be poised to see a strong first quarter, however, after a dramatic rise in yields since November, if economic indicators disappoint or eurozone problems again attract market focus. US government bonds returned 5.33 per cent in 2010, the best performance since 2008, according to data by Bank of America Merrill Lynch. Much of the earlier gain were pared late in the year, however, with losses of two per cent in December alone. Returns also significantly lagged riskier assets including commodities, stocks and corporate debt. "Commodities beat out everything," said Brian Yelvington, analyst at Knight Capital Group in Greenwich, Connecticut. "I wonder if that is indicative of us getting commodity price inflation versus the good kind of inflation that the Fed wants to engineer involving employment and wage pricing." Treasuries lagged as investors priced in higher inflation and growth expectations when the Federal Reserve announced in early November it would buy $600 billion in bonds in its second round of quantitative easing. The programme is designed to ward off deflation and has helped encourage investment in riskier assets. High yield corporate bonds returned 15 percent on the year while investment grade bonds yielded nine per cent and stock markets rose more than 10 per cent. Commodities prices surged across almost every class, led by an 83 per cent increase in cotton and 82 per cent jump in silver. Gold returned 30 per cent. New tax cuts and tax extensions also caused investors to reprice government debt in thin trading conditions in December as investors anticipated higher growth but also focused on the rising debt burden of the US government. As traders return to their desks next month, they will be looking to see if new data backs up their more bullish economic projections. "The sell-off over the last couple of months has happened on the expectation of future inflation. However, this seems too preliminary given the data that's come out over the past few months," said Yelvington. Disappointing releases could send yields lower, while eurozone concerns could again spark a safe-haven bid for Treasuries.
