September 24, 2019 / 1:28 PM / a month ago

UPDATE 2-Egypt share index falls 4.2% on protests, wiping out 2019 gains

(Adds bond and NDF prices)

CAIRO, Sept 24 (Reuters) - Egypt’s benchmark EGX30 index fell 4.2% on Tuesday as fallout from protests in Cairo and other cities over the weekend wiped out the index’s gains since the beginning of the year.

Trading was suspended on Sunday after the broader EGX100 plunged 5%, and on Monday the EGX100 fell another 1.7%.

“Investors are worried about further escalation,” said Ashraf Akhnoukh, director at Arqaam Capital.

“What happened over the weekend was very minimal, but with what happened over previous experience, everyone is being very cautious. That’s why everyone’s cutting risk.”

Egyptian dollar bonds issued by the government also extended losses in the secondary market for a second day on Tuesday. Longer-dated issues fell the most, all falling more than 1 cent to their lowest point in around a month, according to Refinitiv data.

The Egyptian pound weakened against the U.S. dollar in non-deliverable forward (NDF) markets for a second day, with one-year NDFs pricing the pound at 18.51 to the dollar versus a spot exchange rate of 16.32 pounds.

On Friday, hundreds of people protested in central Cairo and several other Egyptian cities against President Abdel Fattah al-Sisi, responding to an online call for a demonstration against government corruption.

Activists have called online for further protests this Friday.

“Today, the sell-off was again led by foreigners who were net sellers. They accounted for 27% of the total turnover,” said Allen Sandeep, head of research at Naeem Brokerage.

Bigger stocks came under strong pressure with heavy volume on Tuesday, brokers said, with heavyweight Commercial International Bank (CIB) shedding 6.3% and tobacco monopoly Eastern Company 5.2%.

The protests that overthrew President Hosni Mubarak in 2011 threw the economy into turmoil from which it has taken years to recover. (Reporting by Ulf Laessing, Yousef Saba and Saeed Azhar, Writing by Patrick Werr, Editing by Angus MacSwan)

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