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Egypt Stocks Drop on Premier Disagreement, Protests; Saudi Gains

July 07, 2013

Egypt Stocks Drop on Premier Disagreement, Protests

A boy walks with bread through a working class neighborhood in Cairo on July 7, 2013. Photographer: Spencer Platt/Getty Images

Egypt’s stock index dropped the most in two weeks as political groups in the North African country disagreed over who should be interim prime minister and before another round of protests.

The EGX 30 Index fell 0.4 percent, the most since June 23, to 5,311.51 at the close in Cairo. Shares valued at about 525 million pounds ($75 million) traded compared with a six-month daily average of 304 million pounds. The measure surged 14 percent last week, the most since the week ended June 28, 2012, when the now deposed Mohamed Mursi was declared president. Commercial International Bank Egypt SAE, the nation’s biggest publicly traded lender, lost 1.1 percent.

Nobel Peace laureate Mohamed ElBaradei said yesterday he accepted an offer to become interim prime minister, prompting objections from the Islamist Nour Party and leading a presidential aide to say that nobody had been given the job. Supporters and opponents of Mursi are planning protests today after deadly clashes left about three dozen people dead July 5.

“Tensions and concern over possible violence are still there, in addition to the opposition from Nour Party to ElBaradei,” Wafik Dawood, director of institutional sales at Cairo-based Mega Investments Securities, said by phone.

Arab investors were net buyers of about 26 million pounds today, while Egyptian and non-Arab foreign investors were net sellers of 4 million pounds and 22 million pounds, respectively, according to data posted on the bourse’s website. Commercial International Bank retreated to 34.54 pounds, while Egyptian Kuwait Holding Co. slid 2.5 percent to 78 U.S. cents.

Yields Decline

Instability, along with violence in the Sinai peninsula, prompted the military to deploy special forces to guard the Suez Canal, the state-run Ahram newspaper reported. The military forced Mursi out after months of discontent with his leadership came to a head in days of mass protests. Adly Mansour, tapped by the military to steer the Arab world’s most-populous nation after Mursi’s removal, is seeking to chart a course to extricate the country from its crisis.

Egypt today sold 6 billion pounds at the auction of three-and nine-month treasury bills. The yields on the shorter-dated securities tumbled 63 basis points, or 0.63 of a percentage point, to 13.74 percent. The yield on the longer-dated debt dropped 55 basis points.

The declines comes after yields on the nation’s benchmark 5.75 percent bonds die in 2020 tumbled last week, declining 170 basis points to 9.07 percent since Mursi was ousted.

Al-Madina Soars

Elsewhere in the region, Saudi Arabia’s Tadawul All Share Index (SASEIDX) increased 0.6 percent as Almarai Co. (ALMARAI), the nation’s largest food producer, reported a 5 percent increase in earnings. The shares climbed 1.7 percent to 73 riyals, the highest close since February 2006.

In Kuwait, Al-Madina for Finance & Investment Co. soared 15 percent, the most in almost three years, on the first trading day after a three-month suspension. The Kuwait SE Price Index advanced 0.3 percent.

Dubai’s benchmark stock index increased 0.7 percent to 2,280.34, the highest in two weeks, and Abu Dhabi’s benchmark index gained 0.5 percent. Muscat’s MSM 30 Index and Bahrain’s All Share Index added 0.1 percent and 0.2 percent, respectively, while Qatar’s QE Index (DSM) retreated 0.1 percent.

In Israel, IDB Holding Corp. (IDBH)’s shares lost 5.9 percent to a record after Argentine businessman Eduardo Elsztain decided against further investment in the debt-strapped company.

The nation’s benchmark, the TA-25 Index (TA-25), added 0.6 percent, led by Perrigo Co. The yield on Israel’s 4.25 percent notes due March 2023 rose 10 basis point to 3.85 percent.

To contact the reporter on this story: Ahmed A. Namatalla in Cairo at anamatalla@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net

A boy walks with bread through a working class neighborhood in Cairo on July 7, 2013. Photographer: Spencer Platt/Getty Images

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