EGYPT: Stock market stumbles amid nationwide turbulence
Days of unrest and protests forced a temporary suspension of trading in Egypt's stock market on Thursday, as the nation's index EGX30 hit its lowest level in more than six months.
"The situation is a direct result of the ongoing protests, as retailers panic and start reacting to political unrest," Wael Ziada, head of research at EFG-Hermes for Investment banking and securities brokerage, told the Los Angeles Times. "These type of events spread in the market like a contagion, and the situation is most likely to stay the same as long as the situation remains influx."
The index had already fallen by 6% to reach 6,138 points when trading ended Wednesday before closing at a 10.52% slide Thursday, a decrease which is the lowest since last July.
A loss of 54 billion Egyptian Pounds ($9.2 billion) was recorded during trading Wednesday afternoon and Thursday morning. According to the Egyptian exchange official website, the market dropped 6.2% after only 15 minutes of trading on Thursday, prompting a 45-minute suspension. It was the first trading suspension since 2006.
The Egyptian Pound is also reaching its lowest slide against the US Dollar, reaching 5.8472 against the greenback.
In an unprecedented protest on Tuesday, thousands of Egyptians took their dismay at what they called "oppression and tough living conditions" to streets throughout the Arab's most populous country, as they called for an end to President Hosni Mubarak's 30-year-long rule.
While Mubarak is yet to react or make any public appearances since Tuesday, some economists think that the government should start making decisions that will ease investors' fears.
"The situation is grave and there should be a political decision telling Egyptians of what is going on to contain the crisis," Issa Fathi, a board member at Egyptians Abroad Brokerage said.
The past two days saw Egyptian security forces beat and use water cannons, rubber bullets, concussion grenades and tear gas to disperse protesters. Six have so far been killed and hundreds of activists were detained.
Ongoing protests, which were inspired by similar incidents that ousted Tunisia's former President Zine el Abidine Ben Ali two weeks ago, are expected to escalate amid calls for wider demonstrations on Friday.
--Amro Hassan in Cairo
Photo: Security forces using water cannons to disperse demonstrators in Cairo's Tahrir Square on Tuesday. Credit: Nasser Nasser/Associated Press