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Egypt Shares Slump to Lowest Since 2009, Bonds Fall on Violence

Nov. 21 (Bloomberg) -- Egypt’s stocks tumbled to the lowest level since March 2009, the country’s 2020 dollar bonds plunged and its default risk soared amid deadly clashes between protesters and security forces.

The benchmark EGX 30 Index lost 4 percent to 3,860.99 at the 2:30 p.m. close in Cairo. The yield on the 5.75 percent dollar notes due April 2020 jumped 57 basis points, or 0.57 percentage point, to 6.72 percent at 5:16 p.m. in the capital, the highest level since March. The cost of protecting government debt against default for five years surged to the highest since March 2009.

“What we’re seeing today is a fear-induced reaction reflecting a worst-case scenario that may involve the delay of elections and a prolonged period of economic instability,” said Wael Ziada, head of research at Cairo-based EFG-Hermes Holding SAE. “The military council has assured that the elections will happen on time. It now needs to outline clear timeline for the transfer power of a civilian government.”

The death toll in the clashes that continued for a third day rose to 22, Health Ministry spokesman Mohammed el-Sherbeeny said in a telephone interview today. Security forces fired tear gas at protesters who have occupied Tahrir Square in the capital Cairo since Nov. 18, state television footage showed. Protesters want the ruling military council to set a time-line for presidential elections.

Parliamentary elections are due to start Nov. 28. A date for presidential elections hasn’t been set by the military council. Egypt’s ruling military council has issued a draft law on political corruption, state-run Nile News reported today, without saying how it got the information.

Yields Surge

About 65 million shares exchanged hands today, compared with a six-month daily average of 81 million shares. Orascom Telecom Holding SAE, North Africa’s biggest mobile-phone company by users, lost 3.9 percent to 2.95 Egyptian pounds, the lowest close in more than seven years.

Five-year credit default swaps surged 63 basis points to 533, according to data provider CMA, which is owned by CME Group Inc. and compiles prices quoted by dealers in the privately negotiated market.

The Egyptian pound earlier weakened to as low as 5.9901 a dollar, the lowest intraday level since January 2005. It lost 0.1 percent to 5.9888.

To contact the reporter on this story: Ahmed A Namatalla in Cairo at anamatalla@bloomberg.net

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

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