Market dips Monday in Egypt

EGX30 slips by 1.5 pct as market struggles to overcome ongoing uncertainty over fate of Egypt's looming constitutional referendum The Egyptian Stock Market ended the day in the red as President Mohamed Morsi's recent decisions continue to be contested by political opposition forces. Egypt’s benchmark EGX30 index fell by 1.5 per cent to 4,976 points. The broader-based EGX70 index saw a more modest decline of 0.54 per cent. A presidential decision to implement new tax increases was ratified on Sunday, then revoked shortly afterward early on Monday, adding to the general sense of incertitude currently plaguing Egypt's political scene. The drop also comes in line with the absence of political consensus regarding Egypt's draft constitution. On Friday, several opposition forces rejected the president's calls for dialogue as demonstrators continued to congregate outside the presidential palace in Cairo. Several opposition groups have called for a boycott of the upcoming 15 December constitutional referendum, while close to 250 diplomats have announced their refusal to participate in supervising expat polling. Ninety-eight listed stocks suffered losses on Monday, led down by heavyweight shares Orascom Construction Industries (OCI) and Commercial International Bank (CIB), which fell by 1.52 per cent and 2.7 per cent respectively. "What’s happening this week is very similar to last week's scenario, when the stock market tried to overcome difficulties at the beginning but was simply unable to sustain growth due to the weak state of the economy," Issa Fathy, vice president of securities at the Egyptian Chamber of Commerce, told Ahram Online. "With calls for a million-man march scheduled tomorrow against the constitutional referendum, the stock market is likely to continue its decline," added Fathy. Turnover continued to bleed for the third week in a row, hitting a record-low LE234 million on Monday and triggering fears of the market’s inability to attain its pre-revolution levels. "These are turbulent times for the stock market, which is being affected by a mixture of political and economic factors," said Fathy. "Political stability is most definitely a prerequisite for its recovery." In line with the trend since Morsi’s controversial 22 November decree, Arab and foreign investors were net buyers for the day, picking up a total of LE5 million and LE12 million in stocks respectively. Egyptian investors, meanwhile, were net sellers, offloading almost LE18 million of shares. The real estate sector performed very poorly, with market giants Talaat Mostafa Group Holding (TMGH) and Palm Hills both declining by 1.76 per cent and 1.48 per cent, respectively. From Ahramonline