Egyptian bourse slips to lowest in 2018

Egypt’s stock market fell to its lowest close this year yesterday as liquidity tightened, while most Arabian Gulf markets were little changed and Saudi Arabia continued to rebound from six-month lows.

The Egyptian stock index tumbled 3.8 per cent to 14,099 points, its biggest drop since mid-2016. On Sunday it had slipped 3.6 per cent after an Egyptian criminal court ordered the arrest of the former president Hosni Mubarak’s two sons on charges of stock market manipulation.

Fund managers said Egypt’s slide was at least partly due to jitters in emerging markets globally, although MSCI’s emerging market equity index rose and credit default swaps and currency forwards do not so far show heavy pressure on the Eguptian pound.

“Our channel checks suggest the sell-off in the Egyptian market is local retail and institutions driven, on currency fears and speculation over a further round of devaluation,” said Vrajesh Bhandari, portfolio manager at Al Mal in Dubai.

“Selling is further intensified as margin calls are triggered and technical support levels break down. The country cancelled three consecutive Treasury auctions, citing investors’ unrealistic yield demands.”

Rania Yacoub at 3Way Finance in Cairo cited a “severe lack of liquidity in the market and investor worries about the emerging markets crisis”.

Qalaa Holdings, which said its investor relations head Amr El Kadi was detained in connection with the manipulation case, tumbled 8.9 per cent yesterday.

But investment bank EFG Hermes, which has said its non-executive vice chairman Yasser El Mallawany was also detained in connection with the case, closed up 0.3 per cent.

In Saudi Arabia, the index climbed 1.1 per cent to 7,730 points. High oil prices and the Gulf’s currency pegs to the dollar have protected the region from some though not all of the emerging market volatility.

Dubai’s index shed 0.1 per cent to 2,741 points in narrow trade, with decliners outnumbering gainers by 20 to 11. Deyaar gained 0.7 per cent and Emaar 0.6 per cent, while GFH shed 2.2 per cent.

In Abu Dhabi, the ADX gained 0.2 per cent to 4,884 points. Julphar rose 2.3 per cent, Agthia closed up 1.7 per cent and Abu Dhabi Islamic Bank gained 0.2 per cent.