September 26, 2019 / 11:40 AM / 5 months ago

Egyptian share losses an 'unjustified reaction' - bourse head

CAIRO/LONDON (Reuters) - Recent losses in Egyptian shares are unjustified, the bourse’s chairman Mohamed Farid said on Thursday, after protests against President Abdel Fattah al-Sisi caused shares to plunge on the Cairo bourse early in the week.

FILE PHOTO: Dr. Mohamed Farid, the new chairman of Egypt's stock exchange, speaks during his interview with Reuters in his office at Smart Village in Cairo, Egypt, September 10, 2017. REUTERS/Amr Abdallah Dalsh

Anti-government protests broke out last weekend, and a call for new demonstrations on Friday has further rattled foreign investors.

On Thursday, the benchmark index .EGX30 rebounded for a second day, gaining 1.7 percent as of 1100 GMT. But the blue-chip index is still down 6 percent for the last week, Refinitiv data showed.

“It’s an unjustified reaction and not significant compared to (other) stock markets,” Farid told MBC Masr TV.

Investors are waiting to see whether protesters will defy a ban and how security forces will respond.

Protests have become rare since Sisi, who took power after removing President Mohamed Mursi in 2013 following mass demonstrations against the Islamist leader.

“The question is: if you are getting a large turnout of demonstrators and there is a big crack-down how is that going to go down? I don’t think it will go down well,” said Kevin Daly at Aberdeen Standard.

“We are all waiting to see what is going to happen after prayers on Friday, and will it run into the weekend,” he said.

Finance ministry officials met investors in London this week on a trip which had been scheduled before, according to an official and fund managers.

“Investors are focused on the intensity and perseverance of the such protests. Those factors will determine whether investors are concerned,” said another UK-based fund manager.

“But the protests are much smaller than 2011. Knowing how brutal the regime is average people will not protest unless there’s a clear agenda and there doesn’t seem to be a clear plan from the protesters,” he said.

The protests that overthrew President Hosni Mubarak in 2011 threw the economy into turmoil from which it has taken years to recover.

Reporting by Ehab Farouk, Karin Strohecker, Tom Arnold, Marc Jones and Ulf Laessing; Writing by Ulf Laessing; Editing by Toby Chopra and Chizu Nomiyama

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