December 18, 2011, 6:25 AM EST
By Alaa Shahine
Dec. 18 (Bloomberg) — Egypt’s benchmark stock index tumbled the most in almost a month, after clashes in Cairo this weekend between security forces and protesters killed 10 people, raising concern economic growth will slow further.
Orascom Construction Industries, the country’s biggest publicly traded builder, declined to the lowest level since Nov. 23. Commercial International Bank Egypt SAE lost the most in a week. The EGX 30 Index dropped 3.4 percent, the most since Nov. 22, to 3,786.53 at 12:44 p.m. in Cairo, extending its slump this year to 47 percent. Persian Gulf shares rose, with the Bloomberg GCC 200 Index, adding 0.3 percent.
Violence flared when the military and police forces moved to end a sit-in outside the Cabinet headquarters. The clashes followed the second round of parliamentary elections, the first vote after the ouster of President Hosni Mubarak in February. The turmoil that accompanied the revolution slowed economic growth in the fiscal year that ended in June to 1.8 percent, from 5.1 percent in the previous 12 months.
“Investors were hoping for more stability amid phase two of the elections, and this weekend violence killed these hopes,” said Wafik Dawood, director of international sales at Mega Investments Securities in Cairo. The confrontation with the military “could lead to more escalation,” he said.
The exchange closed for almost two months this year amid the country’s revolution.
Budget Deficit
The cabinet is set to meet today to discuss austerity measures to reduce record borrowing costs, the state-run Middle East News Agency said Dec. 15. The government has raised its target for the budget deficit in the fiscal year through June to 10 percent of gross domestic product from 8.6 percent, Planning Minister Fayza Aboulnaga told reporters last week.
The clashes, which state-run Nile News said injured 494 people according to the Health Ministry, were reminiscent of the start of this year’s popular revolt in January “in terms of violence, weapons, and again, many unanswered and unjustified occurrences,” said Omar Darwish, an equity sales trader at Cairo-based Commercial International Brokerage Co.
Orascom Construction fell 3.3 percent to 205 pounds, while Commercial International, Egypt’s biggest publicly traded lender, declined 4.6 percent to 20.66 pounds.
Saudi Stocks Gain
Saudi Arabia’s Tadawul All Share Index advanced 0.2 percent after Saudi Basic Industries Corp., the world’s largest petrochemical company, proposed paying the highest annual cash dividend since 2005.
The company, known as Sabic, climbed 1.3 percent to 95 riyals after its board recommended a second-half dividend of 3 riyals a share after paying 2 riyals for the first six months, it said in a statement today.
Dubai’s DFM General Index increased 0.4 percent, while Abu Dhabi’s ADX General Index fell less than 0.1 percent and Oman’s dropped 0.1 percent. Kuwait’s measure added 0.2 percent. Exchanges in Qatar and Bahrain were closed for a holiday.
Israel’s TA-25 Index declined 0.7 percent. The rate on the 5.5 percent Mimshal Shiklit notes due January 2022 dropped six basis points to 4.59 percent, the lowest level since Nov. 8.
–Editors: Claudia Maedler, Shaji Mathew
To contact the reporter on this story: Alaa Shahine in Dubai at asalha@bloomberg.net
To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net
