Egypt stocks plummeted on Sunday for the second consecutive session as the regional conflict in neighbouring Yemen pushed local investors to sell.

Signs of escalation in the Yemen conflict, in which Egypt is militarily involved, including the evacuation of Egyptian expatriates in the war-torn country on Sunday, are the main reason behind investor bearishness, Mohamed Radwan, head of equities at Pharos Holding, told Ahram Online.

The benchmark EGX30 index was down 3.19 percent to 8,608 points, bringing year to date loss to 3.6 percent, while the EGX70 index fell 3.15 percent.

Egyptian investors were net-sellers to the tune of LE45 million while Arab investors were net-buyers for LE18.7 million and other foreigners for LE26.4 million.

“The market is seeing a steep correction as the recent evacuation of Egyptians and Egypt’s official position supporting the Gulf states in the conflict indicates that an escalation might be likely,” said Radwan.

The regional turbulence comes at a time when the bourse is already suffering from a lack of liquidity and investor appetite has dipped as the initial euphoria generated by Egypt’s economic conference last month has faded away, said Radwan, prompting a change of sentiment in local investors in particular.

Among the hardest hit stocks in the main index were property developer Palm Hills Development Company, which fell 5.64 percent to LE3.68, as well as TMG Holding, down 4.08 percent to LE10.04. Real estate shares SODIC and Medinet Nasr Housing slid 3.79 percent and 2.62 percent, to trade at LE13.21 and LE32.86, respectively.

Ezz Steel was down 5.15 percent to LE12.71 and South Valley Cement slid 4.98 percent to trade at LE 5.72.

In the financial services sector, Beltone Financial Holding fell 5.15 percent to LE8.94, Pioneers Holding 4.60 percent to LE9.75 and EFG-Hermes slid 3.01 percent to LE14.51.

Market bellwether Commercial International Bank (CIB) also fell 3.53 percent to LE53.36.

The downward trend is likely to continue for some time, said Radwan.

“Investors will be looking for very cheap levels to re-enter the market, and there is some room on the downside before those levels are reached,” he said.

Total turnover for the session was weak at LE418 million.

Source: Ahram Online