Egypt Stocks Drop to 10-Month Low as Anti-Mursi Protests Loom
Egyptian shares fell to the lowest in more than 10 months on investor concern anti-government protests will gain momentum as President Mohamed Mursi marks the first anniversary of his election.
The benchmark EGX 30 Index lost 2.9 percent to 4,775.92, the lowest level since July 30, at the close in Cairo. The gauge tumbled 12 percent in the last seven days, the longest losing streak since November 2011. Commercial International Bank Egypt SAE, the country’s biggest publicly traded lender, fell 4.1 percent and EFG-Hermes Holding SAE plunged to the lowest in eight years. Benchmark dollar bonds dropped.
A group of mostly secular activists calling for the resignation of Mursi said it collected 13 million petitions for the cause, Al Arabiya.net said. The group known as Tamarrod, the Arabic word for rebellion, is vowing nationwide demonstrations on June 30, the one-year anniversary of Mursi taking office, setting up a possible confrontation with his Islamist backers.
“There’s more noise around the demonstrations this time and growing opposition to the government,” Hassan Kenawi, equities trader at Cairo-based HC Brokerage, said by phone. “We expect the sell-off to continue until there’s news to act as a positive catalyst for the market.”
The yield on the government’s $1 billion of 5.75 percent Eurobonds due in 2020 increased 12 basis points, or 0.12 of a percentage point, to 8.55 percent at 4:11 p.m. in Cairo, the highest level on a closing basis in more than two months.
Commercial International declined to 31.02 Egyptian pounds. EFG-Hermes, the country’s biggest investment bank, plunged 6.3 percent to 7.33 pounds, the lowest since May 2005.
Tamarrod posters bearing a red X on a picture of Mursi have grown increasingly visible around Cairo. The posters ask people to participate in the protests to “topple the Brotherhood rule,” referring to the country’s biggest Islamist organization from which Mursi hails.
The pound was little changed at 6.9908 a dollar after the central bank sold $38.8 million at a currency auction to local lenders. The currency has lost 11 percent since the start of the dollar sales in December.
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