In reaction to Greece’s unfolding financial crisis, the Egyptian stock market’s EGX index plummeted by 5 percent on Sunday in the largest single-day drop in two years. The index lost a total of 360 points to close out the day at 6756.
The price index fell by 4 percent, meanwhile, with 84 company stocks losing value versus 77 gainers.
Over the course of last week, the exchange’s total market capital fell from LE468.3 billion to LE450 billion.
Purchases made by Egyptian investors failed to offset the losses, with foreign and Arab investors selling from the outset of Sunday’s session. Total trades for the day came to LE1 billion, roughly one third of which were corporate transactions.
Orascom Telecom (OT), Orascom Construction Industries and Commercial International Bank all fell by between 2 and 10 percent.
Arab stock exchanges were similarly impacted by the Greek crisis, with the Doha exchange falling by 4 percent, followed by the Dubai and Kuwait exchanges. The Saudi and Syrian stock markets, by contrast, enjoyed modest gains for the day.
The EU has agreed to lend Greece 110 billion euros in an effort to help the country pay off debts estimated at 300 billion euros.
Local finance analyst Mohamed Abdel Rehim expected financial markets to recover following implementation of the EU rescue plan. Market analyst Hamdi Rashad, for his part, expressed fears that the Dow Jones index–which fell by ten percent last Thursday–would continue its downward trend as a result of the crisis.
In a related development, OT announced it would sign a settlement agreement on Monday that would end a three-year spat with partner France Telecom (FT) over shared subsidiary MobiNil. According to the agreement, FT will appoint the majority of MobiNil’s board of directors, while OT will appoint technical and commercial managers.
The two companies also agreed not to resort to international arbitration in the event of a dispute, and to resolve differences amicably through OT’s sale of MobiNil shares directly to FT.
Translated from the Arabic Edition.