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Egyptian Shares Drop by Most in 22 Months as Saudi Stocks Tumble

Egyptian stocks retreated the most since the start of last year’s uprising and the government’s borrowing costs rose as clashes broke out in protest against President Mohamed Mursi’s consolidation of power.

Commercial International Bank Egypt SAE (COMI), the country’s biggest publicly traded lender, dropped 9.8 percent to 33.79 Egyptian pounds. Orascom Construction Industries (OCIC), Egypt’s biggest publicly traded company, tumbled 9.9 percent to 227.37 pounds. The EGX 30 Index (EGX30) plunged 9.6 percent, the most since Jan. 27, 2011, to 4,917.73 at the close in Cairo, trimming this year’s gain to 36 percent. Saudi’s benchmark index fell to the lowest in 10 months amid speculation about the king’s health.

Egypt’s judiciary prepared to suspend work and new clashes erupted in Cairo as critics likened Mursi’s decrees, which shield his decisions from judicial oversight, to the policies of the regime hundreds died to topple last year. Hours after mass protests last night, police fired tear gas at demonstrators in the capital’s iconic Tahrir Square.

“The decree pits the executive and the judiciary branches against each other and splits the population in two,” said Teymour El-Derini, Cairo-based director of Middle East and North Africa sales trading at Naeem Brokerage. “Buying in this market doesn’t make any sense considering the risk.”

Egypt sold nine-month treasury bills today at the highest cost in six weeks as the average yield climbed 30 basis points, or 0.3 of a percentage point, to 13.19 percent, according to central bank data on Bloomberg.

Elsewhere in the Middle East, Saudi Arabia’s Tadawul All- Share Index (SASEIDX) fell 2.1 percent to 6,524.15, the lowest since January. Saudi Basic Industries Corp. (SABIC), the world’s largest publicly traded petrochemical maker, lost 2.3 percent to 87 riyals. Al Rajhi Bank (RJHI), the largest listed Saudi lender, fell 1.1 percent to 66.5 riyals, the lowest since March 2011.

King’s Health

“The Ministry of Labour’s decision to enforce new fees on foreign workers has played an important part in the decline today,” said Mohammed Al-Omran, financial analyst and president of the Gulf Center for Financial Consultancy in Riyadh. “A more important factor that is hard to put into context is King Abdullah’s health. The fear surrounding his condition is the biggest influence on Saudi stocks today.”

Saudi Arabia’s King Abdullah bin Abdulaziz underwent a back surgery on Nov. 17 to tighten a laxity at the conjoining cord of his upper back, which the government said was successful. The king was born in Riyadh in 1924, according to the website of the Saudi Embassy in Washington. Saudi authorities usually don’t comment on speculation about the royal family.

Foreign Workers

The Arab world’s largest economy will proceed with a 200 riyal-a-month ($53) fee on foreign workers when their numbers exceed Saudi employees at a company as a push to encourage hiring nationals. The percentage of Saudi workers in the private sector is between 2 percent to 10 percent, Arab News reported, citing Labor Minister Adel Fakeih.

The Bloomberg GCC 200 Index, which tracks the biggest 200 companies in the six-nation Gulf Cooperation Council, fell 0.9 percent. Abu Dhabi’s ADX General Index, Kuwait’s and Oman’s MSM30 Index each lost 0.2 percent. Qatar’s QE Index gained 0.5 percent and Dubai’s DFM General Index (DFMGI) added 0.3 percent.

Israel’s TA-25 benchmark index climbed 1.3 percent. The yield on the benchmark 5.5 percent bonds due January 2022 fell two basis points, or 0.02 percentage point, to 3.93 percent.

To contact the reporters on this story: Ahmed A. Namatalla in Cairo at anamatalla@bloomberg.net; Sherine El Madany in Dubai at selmadany@bloomberg.net; Deema Almashabi in Riyadh at dalmashabi@bloomberg.net

To contact the editor responsible for this story: Alaa Shahine at asalha@bloomberg.net

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