Market Report: Egypt stocks slip 0.8 per cent on appointment of new police chief

Egypt's stocks slipped into the red Wednesday as a controversial appointment to the position of the country's security chief prompted a fresh bout of investor caution.

The benchmark EGX30 dropped 0.76 per cent to close at 3,993.73 points, a performance mirrored almost exactly by the broader EGX70.

The main index started the day firmly in the green, rising to 4,035 points, but around noon took a downturn.

"The news about the new formation of the ministry, especially the name of the Minister of Interior, raised concerns that unrest might return to the streets," said Mohamed Metwally, a trader at Prime Securities.

The newly appointed Minister of Interior, Mohamed Ibrahim, last served as head of the Giza security governorate and is said to be responsible for a violent crackdown on Sudanese refugees occupying a public garden in Mohandessin in 2005.

Ibrahim's track record has raised fears of protests against his appointment, which could lead to a resurgence of violence on Cairo's streets, Metwally said.

He also pointed to large transactions made by foreign investors, saying their shift on position for major stocks also caused the day's drop.

Two block trades were carried out on Orascom Construction Industries (OCI) and Commercial International Bank, amounting to LE35 million and LE32 million respectively.

OCI and CIB are the market's two largest shares and made up one third of the day's LE415 million total turnover. They dropped by 1.61 per cent and 1.52 per cent, respectively.

Foreign investors made up 44.68 per cent of the day's trade, net selling LE46.9 million. Non-Egyptian Arabs were also net-sellers but made up a meagre 3.33 per cent of overall trading.

Egyptians were the only net-buyers, scooping up LE55.9 million worth of stocks in a renewed show of confidence.

"Egyptians have got used to market fluctuations -- their heavy participation in trading reflects profit hunting more than anything else," Mewally explained.