CAIRO: Profit-taking and a court ruling to fine 20 executives in cement companies for anti-competition practices sent Egyptian shares down on Tuesday, ending three sessions of in the green, traders said.
Shares in Suez Cement last traded 3.76 percent lower to LE 35.86 ($6.68), while Sinai Cement fell 4.04 percent to LE 46.55. Tora Cement skidded 9.28 percent to LE 108.35.
National Cement, the only state-owned cement firm in Egypt, was 0.79 percent down to last trade at LE 20.
“Yesterday’s ruling, combined with the decline in international cement prices, is seen to drive local prices down, said Mohamed Kotb, investment manager at Jazira Asset Management.
A Cairo court fined 20 cement industry executives LE 10 million ($1.9 million) each on Monday for violations of the monopolies law and price fixing.
The point of this verdict is to correct the way these companies do business, and not to limit their industrial and investment activities, Minister of Trade and Industry Rachid Mohamed Rachid said in a press statement. The ruling will enhance the investment environment because it will increase competition, he added.
The trial – which began in February 2008 – is the first of its kind under Egypt’s anti-monopolies law, passed three years ago to bring Egyptian law in line with international practices.
“It is the first verdict issued by the Egyptian courts in a lawsuit aimed at regulating the market and providing consumers with as much protection as possible in an effort to enhance free trade, the minister said.
The decision also affected shares in Ezz Steel, said Wafik Dawood, senior account executive at Naeem Brokerage.
“People think that if this was the case for cement, it could be happening also for Ezz which is also investigated for alleged monopoly practices, he added. Shares in the company dropped 2.44 percent to LE 24.34.
Real estate developer Talaat Moustafa lost 1.21 percent to last trade at LE 6.52, while Orascom Telecom dropped 0.89 percent to LE 52.50.
Overall, Egypt’s benchmark CASE 30 index closed 0.96 percent lower at 8,080.41 points. The widely-watched Hermes index fell 0.92 percent to 708.06 points. The broader CIBC 100 index also lost 1.40 percent to 380.28 points.
The Egyptian Competition Authority is continuing its investigations into several other cases related to monopolistic business practices in various sectors, he said.
The amended version of the anti-monopoly law passed by the People’s Assembly (PA) last June put the minimum fine for monopolistic business practices at LE 100 million. However, this does not apply to the case of the 20 cement executives since the trial began before the amended version of the law was approved.
None of the defendants were present in court but their lawyers said they would appeal the decision immediately. -With additional reporting by Reuters.
