DUBAI: Egypt’s bourse posted its biggest percentage loss in seven months Monday, as local investors continued to book profits on positions built in anticipation of former army chief Abdel-Fattah al-Sisi’s run for president.
The main Cairo index tumbled 3.6 percent to 7,805 points, dropping for a third session in a row, as all but two of its 30 constituent stocks closed in the red and trading volume surged again after declining Sunday.
The market has dropped 8 percent in three days. It is still up 15.1 percent year-to-date, having surged on hopes that Sisi – seen by many investors as the best guarantor of stability – would run in the May election.
When Sisi finally announced his candidacy last week, investors started booking profits. The move was amplified by an earnings report by EFG Hermes, which swung to a net loss in 2013 due to one-off charges.
“In this case I think we need to rely on some technical guidance,” said Chamel Fahmy of Cairo-based HC Securities and Investment. “Most technical analysts see 7,800 points as a key support level.”
Also among Monday’s sellers was private equity firm Actis, which sold shares in Commercial International Bank “in the open market to a group of international investors,” CIB said. The bank’s shares fell 4.2 percent.
Actis, which bought into Egypt’s biggest listed bank in July 2009 – when it traded at less than a half of Monday’s closing price – sold shares equivalent to 2.6 percent of the bank, but retains a stake of 6.5 percent and a seat on the board, CIB said.
In the Gulf, Oman’s index fell 0.8 percent largely because of Raysut Cement, which dropped 3.5 percent as its shares went ex-dividend.
NBK Capital last week reiterated its “sell” recommendation on the stock, saying Raysut had direct exposure “to the massively oversupplied UAE market” and also to very volatile export markets such as the Horn of Africa and Yemen.
Shares in telecommunications operator Omantel fell 0.3 percent to 1.50 rials as the government started selling 71.25 million shares to Omani individual investors at the price of 1.35 rials per share, as part of its privatization drive.
Bahrain’s benchmark rose 0.9 percent as Ahli United Bank started recovering from its ex-dividend slump, adding 2.0 percent.
Moody’s Investors Service changed its outlook on Bahrain’s banking system from negative to stable Monday, saying that it expected banks’ capital metrics to remain broadly stable.