Reuters – Egypt’s main index dropped 2.3% to its lowest close since 11 February. The benchmark has fallen 14.7% from 26 March’s five-year closing high.
The sell-off came after Abdel Fattah Al-Sisi said he would run for president; investors, most of whom favour Al-Sisi, had bid up the market ahead of the announcement and took profits afterwards. The market is still up 10.9% year-to-date.
“Investors are bearish in the short term,” said Mohamed Radwan, head of equities at Pharos Securities in Cairo. “The most hammered stocks are the retail favourites, while the blue chips are suffering as well.”
Telecom Egypt fell 9.4%, Citadel Capital slid 9.2% and property developer Talaat Moustafa dropped 8.5%.
“Local institutions are selling on fears of further declines in the market,” added Radwan. “The [Al-Sisi presidential candidacy] announcement was the trigger for people to think the market was over-bought.”
A gradual weakening of the Egyptian pound to multi-month lows against the US dollar in recent days has also hurt market sentiment, reviving talk that Egypt may eventually have to depreciate its currency further to stimulate growth.