Egypt bourse index at 9-month low
Cairo, August 10, 2008
Egypt’s benchmark Case 30 index sank to its lowest level since October 2007 on Sunday as foreign investors sold following a central bank decision to raise interest rates on Thursday, brokers said.
The Case 30, which has lost more than 15 per cent this year, dropped an additional three per cent to 8,609.39 points.
’The fact that the central bank was raising interest rates for the fifth time this year had a negative effect on the market, especially on market leaders,’ said Hossam Abdel Rahman, a senior broker at Optima Securities.
Egypt’s central bank increased both deposit and lending rates by 50 basis point at a meeting of its monetary committee on Thursday, saying the aim was to tame inflation running at over 20 per cent.
Foreign investors were the sole net sellers of the market, pulling down big caps. ’Funds abstained from buying and wary retailers were selling,’ Abdel Rahman said.
Leading the losers was the heavily traded real estate developer Talaat Moustafa, which last traded 14.38 per cent lower at 6.85 Egyptian pounds ($1.29).
’There was rumours that the company chairman had fled the country and that made everybody uncomfortable,’ said Eissa Fathy, the managing director of the Strategic Company for Securities.
The company issued a statement to the stock exchange on Sunday asserting that ’Hesham Talaat Moustafa is at the company performing his work.’ Eissa said investors were selling the stock at any price even after the company statement.
Shares of other big caps slipped too. Orascom Construction Industries dropped 2.1 per cent to 363 pounds and investment bank EFG-Hermes lost 4.6 percent to last trade at 44.12 pounds.
The Hermes index fell 2.7 percent to 752.72 points, while the broader CIBC index shed 2.1 percent closing at 424.55 points.-Reuters