CAIRO: Egyptian shares dipped for a second day on economic worries, with most blue-chips falling after the government said economic growth would be slower and the budget deficit wider than previously forecast, traders said.
Index heavyweight Orascom Telecom lost 0.2 percent after its chairman said the firm had made no progress in a dispute with the Algerian government and would bring the matter to international arbitration if not resolved.
Egypt’s finance minister said on Monday he expected Egypt’s budget deficit to rise to 9.5 percent of gross domestic project (GDP) in the financial year that begins next July.
He also predicted that GDP would grow by only 2.5 to 3 percent in the 2010/11 financial year. Before political turmoil erupted in January, the government had been predicting growth of around 6 percent.
"The worries are now reflected on the economic side," said Mohamed Kotb, director of asset management at Naeem Brokerage. "These figures are lower than previous forecasts, which is disappointing."
The main index fell 0.4 percent to close at 5,470 points.
Traders also said the extended market losses were also due to an announcement by the central bank on Sunday that foreign reserves had dropped to $30.1 billion at end-March, their lowest since October 2007, from $33.3 billion in February.
Egypt’s biggest listed lender Commercial International Bank fell 2.7 percent. But shares in Talaat Moustafa (TMG), Egypt’s biggest listed developer, reversed a decline and gained 1.3 percent.
Investment bank Prime said on Tuesday it had "positive sentiment" on TMG due to the firm’s strong liquidity position, low financial leverage and LE 22 billion ($3.7 billion) sales backlog, despite uncertainty regarding the long-running dispute over its Madinaty land contract.
Traders expect blue-chips to rebound by the end of the week as concerns on some construction and property stocks spur safe-haven hunting.
"These (blue-chips) are the stocks that are seen as relatively safe-haven and could trigger some buying appetite," said Chamel Fahmy of Pharos Securities.
Egypt’s biggest listed firm Orascom Construction rose 0.3 percent and its biggest investment bank EFG-Hermes 1.7 percent.
