CAIRO: The stock market benchmark index fell 1.7 percent, a day after the appointment of a new finance minister boosted the index.
Worries persisted over whether Egypt can make a peaceful transition from military to civilian rule after elections planned later this year, dampening appetite for shares even in companies with stronger earnings prospects.
"Today, the foreigners are more on the sell side," said Mohamed Radwan of Pharos Securities. "The political situation is still putting pressure on the market ... We're still seeing protesters on the streets, we still see criticism of the new cabinet candidates. It's not all over yet."
Egypt’s main index fell by mid-session, a day after posting its biggest single-session gain since March, as investors looked beyond Sunday’s cabinet reshuffle and pondered the country’s fragile political outlook, traders said.
Declines by heavyweights Orascom Construction Industries and Commercial International Bank helped drag the index down 1 percent to 5,210 points.
Sunday’s gain, the biggest since March 27, came as the cabinet reshuffle ushered in a new finance minister, boosting hopes for an improved investment climate and suggesting the government is responding to popular demands.
Yet worries persisted over Egypt’s transition.
“The market is responding to gains yesterday, with stocks moving in tandem in a downwards direction. What’s happening is pure trading. There are no fundamentals or sentiment driving the market,” said Mohamed Swefy of Osool Brokerage.
Orascom Construction Industries and Commercial International Bank, the two heaviest-weighted stocks on the index, shed 2.1 and 2.4 percent of their value respectively.
El Kahera Housing was the biggest gainer, rising 5.9 percent, followed by Pioneers Holding which was up 2 percent and trading in the highest volume.
Traders said Pioneer’s stock is rising on its announcement earlier this month that it was looking to buy controlling stakes in Egypt-listed companies.
Mobinil inched down 0.4 percent. UBS on Monday cut Mobinil’s price target to LE 130 ($21.83) from LE 170.
