Egyptian Stock Market Plunges as Businessmen assets Frozen
The indices in the Egyptian stock market dropped sharply at the end yesterday’s trading session. The traders described the last minutes of the session as “horrible”, attributing this to psychological reasons due to nearing the day during which the stock market collapsed last year.
The stock exchange retreated sharply while closing the trading session yesterday, after a period of temporary rise at the beginning of the session, during which the main index Case 30 achieved 77 points to reach 6806 points, but it quickly dropped 1702 points to close the session falling 2.54% at 6560.8 while it closed at the weekend at 6731 points.
The trading inside the counter was up to 795.551 million dollars in trading 27.956 million shares, which were carried out through 28.88 thousand buyouts on 132 companies, amid a state of panic among traders .
The last minutes of the session were “horrible” according to traders, specially after buyouts increased in a way that made the index drop about 1% in the last 15 minutes before closing the session. The traders described all the session as ” dramatic”, as the index rose 1.4% in 15 minutes and dropped with the same rate.
The traders added that the bad psychological state they are facing made the market decrease, specially amid a state of fear from the month February during which the stock exchange collapsed last year, pointing out that brokerage companies released reports in which they advised investors to stop losses- buyouts- at the level of 67000 points. When this benchmark point was hit, the investors rushed towards a heavy buyout to stop losses, fearing that the fall may continue.
Economists failed in justifying this fall or linking it to any economic incident, confirming that there is no logical reason for a negative effect on the market; they pointed out that the fall may be due to lacking any motive for rising, something that made speculators benefit from this accidental trend, and gain profits.
Egyptian Stocks Drop Sharply, Hermes Share Plunges 12 %
Traders said that the main indices of the Egyptian shares dropped about 3% on Sunday and the share of Hermes, the holding financial group, dropped more than 12 % after worried small-size investors held buyouts.
Hermes share was the most traded share in terms of the value; it closed down 12 % to 32.40 Egyptian pounds (5.69 dollars) with trading about 5.5 millions of the company stocks.
Also the share of the Egyptian company for mobile services (Mobinil) decreased 15.3 % to close at 152.01 pounds, one week after its rival Vodafone Egypt got a licence for operating a communication network of mobiles on the third generation system. Mobinil postponed submitting documents to get a licence, saying the conditions are not good.
Basim Arida of Al-Tugary Al-Dawly for Brokerage said:”It is a self-proclaimed prediction… the local media said that the stock market will retreat in February like what happened last year, something that worried individual investors… There is no logical reason for the buyout.”
While foreign investment enterprises were widely absent from Sunday trading, the trading of small-size investments accounted for about 76.4 % of the total trading during the session.
In addition to Mobinil, the decrease affected the telecommunications sector as the share of Orascom Telecom that declared on Thursday dividing its share into five shares, retreated 3.5 % to close at 370 pounds.
The traders attribute this to the fact that small-size investors considered the operations of dividing shares as a sign on the increase of cash in the market and not based on the value of the share.
Hermes standard index dropped 2.5 % to close at 57236.56 points. The more active Case 30 index dropped 2.5 % to 6560.82 points . Also, the wide Al-Tugary Al-Dawly index dropped 3 % to 274.64 points.
It is worth mentioning the Egyptian stock exchange witnessed, on Tuesday March, 13, 2006, a complete collapse and most traders lost all their money.
The Egyptian economic landscape is witnessing a serious collapse due to the ongoing crackdowns against Muslim Brotherhood businessmen, the latest of which was freezing assets of 29 top MB businessmen, raising doubts about businessmen’s freedom in their investments inside Egypt.
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