CASE hard hit second day in a row
Cairo’s bourse continues its downward trend with trading volumes remaining low, mainly due to the turbulent regional politics, the general feeling of a deep recession and the continuous instability in the foreign exchange market. The decline comes despite Egypt's entry into Morgan Stanley Capital International's (MSCI's) Emerging Markets Free (EMF) index.
Brokers predict, however, that the market should begin picking up as prices have sufficiently fallen, bringing the stocks to attractive investment levels.
Foreign investment in Egypt remains low as investors fear the unstable currency, with the country’s shortage in dollars in recent years, which exerts a continuous downward pressure on the pound.
The Egyptian government returned to its rigid peg policy in January, as a means of halting the slide of the pound which began in May 2000. The new policy has caused concern among foreign investors regarding the actual value and liquidity of the currency.
On Tuesday, June 5, the Hermes Financial Index ended 1.0 percent lower at 6,277.93 points. The broader CIBC index also dropped 0.50 points—0.7 percent—to close at 68.65.
Helwan Cement stocks rallied on the back of news of strategic investor interest in its stake sale, reported Reuters news agency. The Portuguese cement company, Secil, announced that it was weighing a bid for Helwan. Bidding for the 47.9 percent stake in Helwan—currently owned by the government—began in May 1, yet due to market pessimism, no firm offer has yet been made. — (MENA Report)
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