Bloomberg News

Egypt’s Shares Retreat Most in Six Weeks After Soccer Clash

February 03, 2012

Feb. 2 (Bloomberg) -- Egypt’s shares retreated the most in six weeks after dozens were killed in clashes during a soccer match, the worst outbreak of violence since President Hosni Mubarak was overthrown a year ago. The currency weakened.

Commercial International Bank Egypt SAE, the biggest publicly traded lender in Egypt, slumped 3.5 percent. Orascom Construction Industries fell the most since Dec. 18. The EGX30 Index retreated 2.2 percent, the most since Dec. 22, to 4,584.39 at the 2:30 p.m. close in Cairo, paring this year’s gain to 27 percent. The Egyptian pound dropped 0.1 percent to 6.0335 a dollar at 4:42 p.m. in Dubai. It earlier fell to 6.0345, the weakest since Jan. 27.

“Yesterday’s incident brought the fragile security situation in the country under the spotlight again,” said Wafik Dawood, director of institutional sales at Cairo-based Mega Investments Securities. “It’s a reality check.”

More than 70 people were killed and hundreds injured yesterday when fans of two Egyptian soccer teams clashed after a game in Port Said. The violence, the worst in the history of Egyptian soccer, reflects the breakdown of security after the political upheavals of the past year, which has seen repeated clashes between security forces and protesters demanding that the ruling generals hand over power.

Slowing Growth

The incident aims to “scare Egyptians and extend the ruling of the military,” Egyptian lawmaker Amr Hamzawy said on his official Facebook page, adding that he will demand the resignation of the interior minister.

Egypt’s benchmark gauge tumbled 49 percent last year as the Arab Spring uprising was followed by demonstrations against the nation’s ruling military council, which took control of the most-populous Arab nation. Economic growth slowed to 1.8 percent in the year ended June 30, the weakest pace in at least 10 years. The tourism industry contracted 10.4 percent in the three months through September, while investment plunged 18 percent, government data show.

Five-year credit default swaps were little changed at 566 today, according to data provider CMA, which is owned by CME Group Inc. and helps compile prices from the privately negotiated market. The rate still ranks Egypt as the riskiest investment in the Middle East.

Bond Yields

The yield on the 5.75 percent dollar bonds due April 2020 was little changed at 6.99 percent. The rate has gained 163 basis points from a 12-month low of 5.36 percent on Sept. 19.

Stocks rallied from a 34-month low on Dec. 28 as Egypt completed parliamentary elections, the government said on Jan. 16 that an agreement with the International Monetary Fund may come within weeks and lawmakers took their oaths in Cairo.

The EGX 30 Index jumped 28 percent in January, the best monthly gain in seven years and the biggest among 72 world stock gauges tracked by Bloomberg.

Commercial International fell the most since Dec. 20 to 22.83 pounds. Orascom Construction, Egypt’s biggest publicly traded builder, decreased 2.9 percent to 243.17 pounds.

--Editors: Shanthy Nambiar, Claudia Maedler

To contact the reporter on this story: Zahra Hankir in Dubai at zhankir@bloomberg.net

To contact the editor responsible for this story: Shaji Mathew at shajimathew@bloomberg.net


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