CAIRO ? Egypt's benchmark index plunged on Tuesday, with a temporary suspension of trading failing to cool a frenzy of selling by investors panicked by escalating violence and protests in the capital that have thrust the nation into its worst political crisis since former President Hosni Mubarak's ouster.
The EGX30 index closed 4.78 percent lower, or at 3,676 points, continuing its slide after trading was suspended for nearly an hour on the Egyptian Exchange after the broader EGX100 index fell by over 5.4 percent. Underscoring market unease with the political situation, the country's five-year credit default swaps ? the cost of insuring Egypt's sovereign debt against default ? widened by 25 basis points to 563 basis points, according to Markit.
State television reported that the day's losses on the exchange amounted to 12 billion pounds ($2 billion).
The slide Tuesday was the market's third consecutive day of declines and reflected the worries about the country's political future as thousands gathered in central Cairo protesting against the country's military rulers. The escalating tension came just days before the scheduled Nov. 28 parliamentary elections ? the first since Mubarak left office in mid-February.
Traders put the support point for the benchmark index at 3,800 points, but the market blew past that level with little difficulty early in the day, building on Monday's 4 percent slide and dragging its year-to-date decline down to more than 48 percent.
"We passed the support point, so the only thing that will stop further declines in the market is fixing the political situation in the country," said Khaled Naga, a senior broker with Mega Investments. "We have to wait and see what happens."
The suspension of trade was a safety measure set up by market authorities in the weeks after the uprising against Mubarak. The measures were intended to guard against what many, at the time, feared would be the market's collapse after its reopening more than two months after the start of the Jan. 25 uprising.
The violence and continuing demonstrations prompted the civilian Cabinet to offer its resignation late Monday. But the move failed to appease the activists who see the civilian government as little more than subservient to the military rulers.
While far from presenting a united front, the activists massed in Cairo's Tahrir Square ? the epicenter of the uprising that toppled Mubarak ? are demanding that the military rulers either immediately hand over power to a civilian administration or set a fixed date for a transition to civilian rule.
Firmly entrenched in Tahrir Square, the activists issued a call for a million-man rally on Tuesday ? a move that had thousands streaming into downtown Cairo and raising the specter of further clashes and violence, even as officials called for restraint from all sides.
The threat of continued trouble only builds on already growing political uncertainty that has battered the country's economy and placed tremendous pressure on the country's currency. The Egyptian pound was trading at about 5.996 to the U.S. dollar by early afternoon local time, according to currency Web site, XE.com.
The government has struggled to keep the pound from breaking the six pounds to the dollar level for months, with economists attributing at least a portion of the net international reserves that have been spent going to support the currency. Egypt's net international reserves fell from $36 billion in December to about $22 billion by the end of October, according to Central Bank of Egypt figures.
Naga said the stock market has lost about 180 billion pounds ($30.25 billion) since the start of the year ? with most of that linked to the unrest in the country versus the overall global financial concerns linked to the Eurozone debt crisis and broader fears of recession. He said Monday's losses were about 7 billion pounds.
The Tuesday losses marked the 10th consecutive trading session in which the market ? one of the worst performing emerging market indices in the world ? suffered a slide as a result of Egypt's tenuous political situation.
Rami Sidani, the Dubai-based head of Middle East and North Africa investments for British asset management firm Schroders, said there is a "very negative sentiment" over Egyptian stocks at the moment. The uncertainties surrounding the country's political future have triggered a panicked sell-off on the Egyptian exchange, he said.
"There is no discrimination between one company or another," said Sidani. "Investors are just selling across the board without taking into consideration the value of the underlying assets."
The declines came as several markets elsewhere in the region extended slumps of their own following Monday's rout on Wall Street.
The Dubai Financial Market dropped 0.3 percent to close at 1,351 points Tuesday, its lowest level in more than seven years. Saudi Arabia's main index was trading down 0.8 percent at 6,103 points by mid-afternoon.
___
AP Business Writer Adam Schreck in Dubai contributed to this report.
paterno oakland raiders carson palmer al davis edmund fitzgerald vincent brown vincent brown
কোন মন্তব্য নেই:
একটি মন্তব্য পোস্ট করুন