Middle-east Arab News Opinion | Asharq Al-awsat

Egyptian stock exchange loses USD 1 billion | ASHARQ AL-AWSAT English Archive 2005 -2017
Select Page
Media ID: 55306644

Traders work at the Egyptian Exchange in Cairo
(Reuters/Mohamed Abd El Ghany)

Traders work at the Egyptian Exchange in Cairo, in this January 22, 2013 file photo.  Source: Reuters/Mohamed Abd El Ghany

Traders work at the Egyptian Exchange in Cairo in this January 22, 2013, file photo. (Asharq Al-Awsat)
(Reuters/Mohamed Abd El Ghany)

Cairo, Asharq Al-Awsat–The Egyptian stock exchange fell yesterday following fears caused by the ongoing unrest, taking the index to its lowest level since mid-June. Sales by foreign investors yesterday were the cause of the decline, causing the market to lose around USD 1 billion.

The EGX30 index fell by 3.8 percent to reach 5334.55 points, while the medium-sized companies index fell by 1.85 percent to close at 421.07.

Foreign investors sold around USD 10 million more than their purchases, equaling 17.73 percent of total sales, while purchases by Egyptians and Arabs were around USD 9 million more than their sales.

Analysts said this drop was expected in light of the escalating violence in the country, which reminded investors of the January 2011 revolution.

Egyptian Stock Exchange traded for three hours yesterday, the first day it has opened following the suspension of trading on Thursday. This followed a decision by the Central Bank of Egypt to also open for only three hours on Sunday and Monday.

The exchange’s management said it was in contact with all listed companies to monitor the effects of recent events on Egyptian businesses, stressing the importance of revealing any such developments quickly. It also said that it would try to avoid taking such precautionary measures except when strictly necessary, in order to prevent disruptions in the economy.

So far, no listed company has announced any losses caused by the unrest in the country.

Many factories suspended work last week, the largest of which was the Swedish home appliances manufacturer Electrolux. However, those factories announced that they had no intention of leaving Egypt, but were simply taking precautions in light of the security situation in the country.

Egypt declared a one-month state of emergency last Wednesday, imposing a curfew between 7 p.m. and 6 a.m. local time in 14 governorates.

The week of heightened unrest has affected the general economic situation in Egypt, with production in factories slowing due to difficulties in transporting workers and raw material on roads disrupted by protests.

Egyptian trade and industry minister Mounir Fakhry Abdel Nour said he had called for a meeting with the General Federation of Egyptian Chambers of Commerce to discuss the negative effects of what he called “terrorist activities” on trade and the possibility of supporting installations damaged by such activities.

The minister added that the recent unrest had directly affected shops, many of which were forced to close and some of which were also damaged, especially in areas affected by violence.

The minister said yesterday that an agreement was reached with the prime minister to authorize the General Federation of Egyptian Chambers of Commerce and the Egyptian Industry Union, in addition to the chambers of commerce in the governorates, to process applications for special permits for goods transport vehicles and buses carrying workers to be allowed to travel to and from industrial areas during the curfew hours.

The curfew has made it difficult for many workers to reach factories for evening shifts, which has negatively affected production levels, thus making it difficult for the factories to meet the needs of the local market and fulfill export contracts.

In a related development, the Egyptian government’s cost of borrowing rose Sunday as the yield on government debt instruments rose for the first time in seven weeks, following a fall due to increased demand last month.

Egypt sold USD 8.6 billion pounds of treasury bills at auction yesterday, with three-month notes rising 18 basis points on last week to 11.44 percent, according to the central bank.