Egypt stocks plunge into red on foreign investment

Egyptian stocks plunged further into the red in the week\'s final trading session hit by uncertainty over the country\'s economic direction and potential difficulties in selling the tough reforms necessary to achieve a long-awaited IMF loan. The benchmark EGX30 tumbled 2.14 per cent to close the week at 5,548 points, its lowest level since mid-September, weighed by sell-offs for all but two heavyweight stocks. \"There is disturbance over the gold-mine ruling and there\'s also a lack of clarity on the IMF loan and financial restructuring [mandated by the Fund]. Investors are still seeing political risk,\" Walaa Hazem, vice president for asset management at HC Securities & Investment, told Ahram Online. On Tuesday, international gold producer Centamin was ordered to halt operations in Egypt after a court declared invalid the firm\'s right to operate the Sukari mine, its only production asset. The move prompted worries it would deter fresh investment and undermine existing contracts between Cairo and private firms. Foreign investors led the sell-offs on Thursday, offloading LE15 million more in stocks than they bought. An IMF delegation arrived in Cairo on Tuesday to restart negotiations for a long-awaited $4.8 billion loan. Previous visits have prompted stock surges, but treasury bill traders quoted by Reuters on Thursday said the government is likely to face huge challenges in selling IMF-approved reforms of subsidies to the Egyptian public. From the 177 stocks traded on Thursday, 148 lost value and just 17 gained -- a performance reflected by the broader-based EGX70 which slipped 1.38 per cent. Turnover was a mild LE530.7 million ($86.9m), around half the level seen at the height of summer following the election of Egypt\'s first post-Mubarak president. Seeing the heaviest trade was the Commercial International Bank, often a weather-vane for foreign interest, which fell a hefty 3.22 per cent. Metal producing giant Ezz Steel wasn\'t far behind, with LE37 million in trade, but tumbling 5.64 per cent. The firm\'s founder and ex-chairman, Ahmed Ezz, is currently standing trial on graft charges related to his acquisition of Ezz Al-Dekhelia, a formerly state-owned enterprise. The head of his defence team -- and onetime Mubarak lawyer -- reportedly resigned from his legal team this week. Property giants were hit hard too, with shares in Palm Hills Development falling 2.9 per cent and the Talaat Moustafa Group plunging 4.9 per cent. Despite a third consecutive session of substantial looses, the main index remains 54 per cent higher than at the start of 2012.   From Ahram Online