The benchmark Egyptian index suffers a broad sell-off led by declines on market heavyweights including investment bank EFG-Hermes, in which a firm owned by Dubai’s ruler sold part of its minority stake for $120 million.
The sale of a 7 percent stake was at an 11 percent discount to Tuesday’s close and indicated a 60 percent drop on the price Dubai Holding paid on its almost 25 percent stake in 2007.
EFG shares ended 8.1 percent lower at LE 25.8, while every other stock on the index also fell. Rival financial firm Pioneers Holding dips 8.5 percent.
“It (EFG-Hermes) is oversold because of this issue, says Karim Hosny from Pharos Securities. “But with a buyer found I think it will rebound from these prices.
Orascom Construction Industries (OCI), the biggest weight on the index, falls 4.3 percent, while fellow blue-chip Orascom Telecom sheds 5.1 percent.
Mobinil is the best performer on the index, down 0.1 percent, while no other firm fell less than 1 percent.
“This is a retail market driven for the greater part by technical analysis rather than fundamentals, says Angus Blair, head of research at Beltone Financial. “Egypt has had a good run so far this year and some people might want to lock in profit.
The main index has risen some 80 percent since February lows around 3,400 points. The session closes down 3.7 percent at 6,130 points.
“In a downtrend we are always anticipated that support levels will not hold … we are viewing the market as overbought, says Mohamed El Saiid, a technical analyst at HC Securities, adding that he expects a near-term support level of 5,860 points to break and the market would fall to 5,200 points. – Reuters
