Thursday, May 30, 2013

Ethiopian Nile move drives Egypt's EGX30 downward

An interior view of the Egyptian stock market is seen in Cairo (Photo: Reuters)

EGX30 falls 1.2 percent Wednesday following Ethiopia's contentious decision to divert course of Blue Nile, raising concerns about move's impact on Egyptian water security

Egypt stocks tumbled on Wednesday in the wake of Ethiopia's recent move to begin construction of a major dam on the Blue Nile, one of the Nile River's two main tributaries, raising fears regarding the move's potential impact on Egypt.

The main EGX30 index declined by 1.2 percent to reach 5,338 points in a session that saw total daily turnover of some LE339.9 million.

Egypt's foreign ministry on Wednesday summoned Ethiopian Ambassador Mahmoud Dardir to express its displeasure with Ethiopia's decision to divert the course of the Blue Nile, one of the Nile River’s two major tributaries, as part of its project to build a series of new dams for electricity production.

Egypt's broader-based EGX70 index, meanwhile, fell by 0.8 percent for the day.

Commercial International Bank was the only blue-chip share to register gains – 0.03 percent – with foreign investors picking up some LE3.2 million worth of company stock.

Market bellwethers Orascom Construction Industries (OCI) and Orascom Telecom (OT), meanwhile, fell by 2.1 and 0.8 percent.

Property shares Talaat Mostafa Group, Palm Hills and SODIC all slumped on Wednesday as well, falling by 1, 2.6 and 2.4 percent respectively.

Domestic investors ended the trade session as net sellers, offloading some LE8.5 million worth of shares.