Egypt’s markets: worse and worse

Egypt’s markets tumbled again on Tuesday morning following another day of protest which culminated in the Egyptian cabinet offering its resignation to the ruling military council. Egypt’s headline EGX index fell 1.3 per cent in early morning trading, dropping to its lowest point since March 2009, when it hit 3389 points. It is currently trading at 3749.5.

Monday had already seen big losses on Egyptian markets – the EGX fell 3.6 per cent – as protests against the military-led government erupted in Tahrir Square over the weekend, fueling investor fears that election scheduled for November 28 would not bring calm or certainty to the country.

Egypt’s equities have been falling for almost a year and have yet to recover any of the huge losses incurred when markets re-opened in March 2011. Egypt’s headline Case 30 index has shed 44.7 per cent of its value since the start of the year, down from over 7,000 points at the start of 2011 to 3389.

It’s not all market doom and gloom: both the Egyptian pound and the country’s debt yields also worsened on Tuesday, but their movements were again minimal, most probably due to government interventions in both markets via state-owned banks buying government debt and the central bank supporting the currency in forex markets.