Egypt Stocks Continue Slide as Iran Re-entry Drives Oil Prices Lower

Egypt stocks continued to fall on Sunday in line with regional markets as global oil prices hit new lows after economic sanctions on Iran were officially lifted.

Egypt’s main EGX30 index was down 1.66 percent at the end of the session to reach 5,760 points as local investors, who account for over 81 percent of trade, dumped a net LE23.9 million worth of shares, according to bourse data.

Market bellwether Commercial International Bank dropped 1.59 percent to trade at LE31.03 a share while the second largest listed share TMG Holding fell 2.21 percent to LE5.30 a share.

Blue chip Global Telecom Holding fell 3.01 percent to LE1.61 a share, while state-owned landline operator Telecom Egypt saw its share price drop 1.91 percent to LE5.65.

Saudi stocks were down close to 6 percent at the time of writing, while Dubai’s index tumbled 6 percent in the first hour of trade after benchmark oil prices fell to a 12-year low of $29 over the weekend in anticipation of the worsening of a global supply glut with increased production from Iran.

The oil-producing Iran has said that it plans to export an additional 500,000 extra barrels of crude oil a day in the short-term, after inspections on Saturday confirmed it had fulfilled the requirement of a nuclear agreement allowing for the lifting of international economic sanctions on the country for the first time in 40 years.

The EGX30 had reached a low of 5,531 points at the beginning of the day’s session before rebounding.

The Egyptian bourse issued a press release to calm investors on Sunday amid the sell-off, according to which 60 percent of the listed companies have P/E ratios of under 10, and that 11 percent of the companies had PE ratios of between 10 and 15.

Chairman Mohamed Omran also said in the release that 37 percent of the listed companies who issued coupons offered yields exceeding 10 percent.

The bourse had issued another statement last Thursday after a week of losses calling on listed companies to disclose their 2015 financial statements “so as to reflect the real situation of those companies in a way to help the investor form a realistic vision about their performance away from the cases of unexplained panic sweeping markets at some times, which is not built on a sound economic basis.”

Foreign investors were heavy sellers of Egyptian and other emerging market stocks last week, prompting local Egyptian investors to follow suit.