Egypt’s stock exchange indices all tumbled on Wednesday as violence prevailed following the ministry of Interior’s dismantling of weeks-long sit-ins staged by supporters of ousted president Mohamed Morsi demanding his reinstatement.
The benchmark EGX30 index, which encompasses the market’s 30 blue-chips and has recorded a sox-month high on Tuesday’s trading, dropped 1.7% to reach 5549 points, the biggest decline in a week.
Meanwhile the EGX70 index, encompassing small and medium sized companies, slumped by 2.7% to reach 429.4 points as a result of escalating events. The broader EGX100 fell 2.4% to reach 737 points and the EGX20 lost 1.7% to reach 6.435 points.
Tens of people were killed and hundreds were injured as the Ministry of Interior broke into sit-ins in Nasr City and across from Cairo University, dispersing pro-Morsi protesters who have camped in the two sites for more than a month. Clouds of tear gas were visible and gunshots were heard since the early hours of the day.
The chairman of the Egyptian Stock Exchange Mohamed Omran refused to suspend the trading despite escalating events, according to statements on the official news agency MENA. However, 19 stocks were suspended thorughouyt the day, according to Al-Borsa newspaper, after declining more than 5% each.
Wael Zeyada, the head of research at EFG-Hermes, said “one should expect this drop to persist as long as violent continue to be present in the Egyptian streets,” Zeyada added.
Even thought the earnings of several corporation are now being announced, Zeyada anticipated that there revenues will not prevent this drop from happening. “These revenues results will be overshadowed by the political events,” he added.
Ali Abdel-Kader the director of trading at Sigma company for stock trading told Alborsa newspaper on Wednesday that the market will face waves of declining with fear and anxiety of investors, and the losses will not exceed EGP 200m.