A sudden drop in Orascom Construction Industries (OCI) shares on Thursday led the main EGX30 stock index to nosedive by the end of trading, leading to total market losses of LE4.5 billion.
The losses were triggered when foreign investors began intensively selling their OCI shares, fearing that the company would not be able to settle its ongoing dispute with the Tax Authority.
The EGX30, which measures the performance of the top 30 companies, fell by 2 percent, losing 110 points to settle at 5,207, in total transactions worth LE372.2 million.
Foreign investors sold for LE60.4 million, while Egyptian and Arab investors bought for LE45.1 million and LE15.2 million respectively.
OCI shares, which represent about a third of the total stock exchange, fell by 4.4 percent, pushing the rest of the top 30 shares to fall en masse. Only eight companies were spared losses.
“The market is under pressure from the continuing political tension and economic turmoil,” said Tycoon Securities CEO Mostafa Adel, adding that the travel ban placed on OCI owners contradicts what the government had earlier said about reconciling with investors.
“I expect more falls due to that," Adel concluded.
The government has occused OCI of failing to pay LE14 billion in taxes on the sale of its cement company to France's Lafarge.
Edited translation from Al-Masry Al-Youm
