Motivated by a bearish sentiment, foreign investors pulled Egyptian stocks down on Tuesday, ending a four-day winning streal, traders said. The country's main index shed 192 points on declines in big caps, they added. Arab and non-Arab investors made net sell-offs totalling LE2.8 million and LE52.2 million ($9.2 million) respectively, while Egyptians made net purchases worth LE55 million. Orascom Construction Industries, Egypt's largest builder by market value, shed 2.98 per cent, closing at LE238.09 per share. Orascom Telecom, the largest Arab mobile operator by subscribers, dipped by 3.43 per cent to LE5.35 per share. EFG-Hermes, the country's largest investment bank bt market valye, slid 3.54 per cent to LE30.21 per share. Shares in developer Talaat Moustafa plunged by 7.45 per cent, marking the day's biggest decline, to LE7.58. The North African country's benchmark index EGX 30 fell by 2.93 per cent, ending the day's trading at 6,355.05 points. The EGX 70 index, which measures 70 of the country's small and mid caps, shed 2.13 per cent to 546.03 points. Volume hit LE818 million, according to the Egyptian Exchange. In a related event, Morgan Stanley Capital International (MSCI) has maintained the UAE and Qatar stock markets as frontier markets in its 2010 annual market classification review. MSCI said in a statement carried by Reuters that both the UAE and Qatar would need to move away from the frequent use of dual account structures, such as separate custody and trading accounts, which are incompatible with general emerging market standards. "The use of segregated accounts by institutional investors results in the significant operational burdens of having to transfer shares from one account to the other prior to trade," the MSCI said in a statement. The firm also cited stringent foreign ownership limits in both GCC markets for its decision to maintain frontier status, although MSCI said it was encouraged by plans in the UAE to increase foreign ownership limit levels in order to facilitate equal foreign access to the local equity market. MSCI said tough market conditions may have slowed down implementation of the plan, but hoped that the UAE regulator would provide a roadmap of when implementation would occur. The two GCC markets will remain under review for a potential reclassification to emerging markets as part of the firm's 2011 review, the MSCI added. Meanwhile, world stocks fell for the first time in two weeks as investors took some profits on a cooler assessment of China's weekend decision to give its currency more flexibility. A reading from Germany's Ifo institute pointing to a moderately improved business climate had little impact. Financial markets, however, were also cautious ahead of Britain's budget later in the day, which is expected to contain massive spending cuts and tax rises to combat rising debt worries. MSCI's all-country world index was down 0.4 per cent, looking set for its first loss since June 7. In the period in between, the benchmark has gained more than seven per cent. Investors have been tentatively embracing riskier assets over the past fortnight as their worst fears about a euro zone sovereign debt collapse have eased. Stocks outside the United States got a particular boost on Monday following China's announcement it planned a more flexible currency regime. This boosted hopes that a stronger yuan would lift purchasing power for imported goods and raw materials, giving the global economic recovery a much-needed shot in the arm. Investors took a more considered view of the impact on Tuesday and grew sceptical about how much Beijing would actually allow the yuan to rise. "People gave much more weight to the currency move than it deserved," said Koen De Leus, economist at KBC Securities. The FTSEurofirst 300 was down 0.3 per cent after rallying for nine sessions in a row. Earlier, Japan's Nikkei closed down 1.2 per cent, a day after bouncing to a one-month high. The euro also retreated from a one-month high against the dollar, tracking a pullback from riskier assets. Upward momentum seen on Monday in the euro and other higher-risk currencies including the Australian dollar petered out as investors acknowledged Beijing's vow for a more flexible yuan policy would not lead to a sharp appreciation in the currency. The euro traded at $1.2316, unchanged on the day after hitting the day's low of $1.2285 in earlier trade. The single currency pulled back from $1.2490 hit on Monday, its strongest since May 24. Eurozone government bond yields were flat.
