Egypt Shares Fall Most in Month After Deadly Clashes in Cairo; Comi Drops

Egyptian shares tumbled the most in almost a month after clashes in Cairo this weekend left 10 dead, raising concern economic growth will slow further. Saudi Arabia’s measure (SASEIDX) rose for a third day on Sabic (SABIC)’s dividend plan.

Orascom Construction Industries, Egypt’s biggest publicly traded builder, declined to the lowest level since Oct. 10. Commercial International Bank Egypt SAE (COMI) lost the most in a month. The EGX 30 Index (EGX30) dropped 3.5 percent, the most since Nov. 22, to 3,782.74 at the 2:30 p.m. close in Cairo, extending its slump this year to 47 percent. Persian Gulf shares rose, with the Bloomberg GCC 200 Index (BGCC200) adding 0.2 percent. The Tadawul All Share Index strengthened 0.2 percent, adding 1.2 percent over the past three days, the longest streak of gains since the four days ended Oct. 10.

Violence in the Egyptian capital flared when the army and police moved to end a sit-in outside the Cabinet headquarters. The clashes followed the second round of parliamentary elections, the first vote after the ouster of President Hosni Mubarak in February. The turmoil that accompanied the revolution slowed economic growth in the fiscal year that ended in June to 1.8 percent, from 5.1 percent in the previous 12 months.

“Investors were hoping for more stability amid phase two of the elections, and this weekend violence killed these hopes,” said Wafik Dawood, director of international sales at Mega Investments Securities in Cairo. The confrontation with the military “could lead to more escalation,” he said.

The exchange closed for almost two months this year amid the country’s uprising.

Budget Deficit

The government has raised its target for the budget deficit in the fiscal year through June to 10 percent of gross domestic product from 8.6 percent, Planning Minister Fayza Aboulnaga told reporters last week.

The clashes, which state-run Nile News said injured 494 people, citing the Health Ministry, were reminiscent of the start of this year’s popular revolt in January “in terms of violence, weapons, and again, many unanswered and unjustified occurrences,” said Omar Darwish, an equity sales trader at Cairo-based Commercial International Brokerage Co.

Orascom Construction fell 3.8 percent to 204.08 pounds, while Commercial International, Egypt’s biggest publicly traded lender, declined 4.9 percent to 20.59 pounds.

Saudi Stocks Gain

Saudi Arabia’s gauge rose after Saudi Basic Industries Corp., the world’s largest petrochemical company known as Sabic, proposed paying the highest annual cash dividend since 2005.

“The Saudi market is gaining on Sabic’s dividend,” which is stirring optimism about upcoming earnings releases at other Saudi companies, said Dubai-based Ibrahim Masood, who helps manage about $400 million at Mashreqbank PSC. (MASQ)

The Riyadh-based company advanced 1.1 percent to 94.75 riyals after its board recommended a second-half dividend of 3 riyals a share after paying 2 riyals for the first six months, it said in a statement today.

Dubai’s DFM General Index increased 0.4 percent, while Abu Dhabi’s ADX General Index (ADSMI) fell less than 0.1 percent and Oman’s dropped 0.1 percent. Kuwait’s measure added 0.2 percent. Exchanges in Qatar and Bahrain were closed for a holiday.

Israel’s TA-25 Index climbed less than 0.1 percent. The rate on the 5.5 percent Mimshal Shiklit notes due January 2022 dropped six basis points to 4.59 percent, the lowest level since Nov. 8.

To contact the reporters on this story: Alaa Shahine in Dubai at asalha@bloomberg.net; Mourad Haroutunian in Riyadh at mharoutunian@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net; Shaji Mathew at shajimathew@bloomberg.net

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