Egypt's Market Skids Another 3% As Unrest Grows

The market [EGX30 4971.77 -144.44 (-2.82%) ] lost 2.93 percent to close at 5116 points, underscoring Egypt's position as the worst emerging market so far this year.

Thousands of Egyptians continued their protest in Cairo’s Tahrir Square and across the country, calling on the ruling military council to speed up domestic reforms as well as the trials of former regime officials.

In a further move to appease protestors, the Egyptian Prime Minister Essam Sharaf is expected to announce a major cabinet reshuffle.

Wael Ziada, Head of Research at EFG-Hermes in Cairo, told CNBC that “with the political scene what it is at the moment, you cannot rule out volatility in the stock market” and that most of the today’s decline was “due to the political situation.”

Ziada admitted that although the situation remained unclear in the short-term, he remained positive about the longer term prospects.

Given the ongoing volatility, a swift response to demands of protestors, or striking a broader deal, may give the market an inflexion point.

“I think we will have a response from the government and the Supreme Council of the Armed Forces in the next two-three days … we might see a reshuffle”, Osama Mourad, CEO of ArabFinance Brokerage told CNBC. That, he says, would bring about a quick rebound, with telcos seen outperforming.

A stock that bucked the broadly negative trend was Olympic Financial Investments, which jumped 6.64 percent after Sweden’s Electrolux agreed to buy 52 percent of the company in cash from Paradise Capital.