Egyptian Stocks Slump Amid Increasing Violence Before Elections
Egyptian shares fell the most in six weeks as violence flared in at least two cities in the build up to the start of parliamentary elections.
Talaat Moustafa Group (TMGH) Holding, the country’s biggest publicly traded property developer plunged 5.6 percent after announcing results. Orascom Telecom Holding SAE (ORTE) fell to the lowest level in more than seven years. The benchmark EGX 30 Index (EGX30) retreated for a fourth day, losing 2.7 percent to 4,180.82 at the 2:30 p.m. close in Cairo, the biggest loss since Oct. 3.
“We’re seeing increased downward momentum this week because some investors are starting to realize stability isn’t increasing as we’re approaching elections,” said Wafik Dawood, director of institutional sales at Cairo-based Mega Investments Securities. “In fact, we’re seeing more violence in the Delta and in Upper Egypt.”
Egypt’s main equities index has lost 42 percent this year, making it the world’s third-worst performer, as the country’s economy ground to a halt and political instability increased in the aftermath of the uprising that toppled President Hosni Mubarak in February.
One person was killed and three others were injured yesterday as security forces clashed with protesters who have been blocking a main road to the northern port of Damietta. In the southern city of Sohag, feuding clans clashed last week using fire arms. In Sinai, Egypt’s natural gas pipeline that runs to Israel and Jordan was also attacked last week for the seventh time since February, causing disruption of gas exports.
Egypt is due to hold on Nov. 28 the first poll for the lower house of parliament after Mubarak’s departure. Voters will choose parliament’s upper house members in January. Parliament is due to convene in March to select a committee that will write a new constitution, according to a timeline set the by the country’s ruling military council. The council hasn’t announced a date for the presidential election.
Talaat Moustafa fell the most since April to 3.22 Egyptian pounds. The company said nine-month profit dropped to 493.7 million pounds ($83 million) from 863.6 million pounds a year earlier. Orascom Telecom lost 2.5 percent to 3.12 pounds after reporting a $975,000 loss in the third quarter, compared with a $939.2 million profit a year earlier.
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