Vendor on the streets of Cairo, Egypt with an enlarged US dollar advertisement in the background. Egypt is facing a renewed economic crisis due to its alliance with imperialism., a photo by Pan-African News Wire File Photos on Flickr.
Egypt stocks slump on fears of international isolation
Ahram Online, Sunday 18 Aug 2013
Foreign investors shy away from the Egyptian stock exchange as bloodshed on the streets attracts an international uproar against the interim government
Egypt's stocks slumpedas trading resumed onSundayafter hundreds of people were killed in widespread clashes between security forces and supporters of the Muslim Brotherhood the week prior, prompting an international backlash at the country's interim government.
The Bourse's main index, EGX30, fell 3.87 percent to sit at 5,334 points. Thedrop was apparently driven by thewithdrawal ofnon-Arab foreign investors who finished the session ona net selling position of LE80m. They made up nearly a quarter of the day'sLE335.5 million($48m) turnover.
Egyptian investorswere net-buyers at a justLE75 million despite making up two thirds of trading volume.
"Nothing is clear at this point, the fate of Egypt relations with the world is seriously being questioned," Mohamed Amir, a stock market analyst told AhramOnline. "We might see a real exodus of foreign investments if the bloodshed leads to international isolation."
The European Union on Sunday said it plans to review its relationship with Egypt and adopt measures toprevent further escalation of the violence. Several countries across the world, including the US and Germany as well as the United Nations have condemned the ongoing bloodshed. Last week, Denmark suspended aid to Egypt.
EGX30 fell 1.7 percentonWednesdaywhen security forces moved to clear two protest sitesin Cairo where supporters of ousted President Mohamed Morsiwere holding camp. The stock market was shutdown on Thursday as violenceescalated and a 7pm curfew was put in place.
Sunday's trade was shortened to three hours from fouras security on the streets remains volatile.
The Commercial International Bank (CIB) led the market's slump, marking a turnover of LE61million and dropping5.54 percent to close at LE35.63 per share.
Palm Hills Development, EFG Hermes and EzzSteel dropped 2.93, 4.86 and 3.09 percent, respectively.
The market embarked on an upward trend since the army ousted president Morsi on 3 July following mass protests against him,hittinga six-month high a day before the crackdown began on Wednesday. According to Amir, the slump is very likely to sharpen as the political crisis elongates.
The Egyptian government hinted on Saturday it might ban the Muslim Brotherhood; a move that would bury an already frailchance of a peaceful end to theshowdownin Egypt.
"There will be no reconciliation with those whose hands have been stained with blood and who turned weapons against the state and its institutions,"Prime Minister Hazem El-Biblawitold reporters on Saturday.