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Egypt bourse nose-dives on panic selling

The Hermes index tanked 3,334.65 points, or 6.9 percent to 44,840.71. points. The broader CIBC index fell 4.9 percent to 198.99 points, while the Case 30 index tumbled 7.6 percent to 5,112.99 pounds.

Most said that Egypt had fallen in line other emerging markets, leading larger investors to sell the bourse’s most heavily weighted stocks, hitting the market hard and sparking panic among retail investors.

“Foreigners have been selling in the market because of selling in other emerging markets. What the catalyst for that is, I don’t know ... The retail investors have been scared by this,” Yasser Hassanein of Dynamic Securities said.

Heavyweights EFG-Hermes, an investment bank, fell 5.93 Egyptian pounds ($1.03) to 32.97 pounds, Orascom Telecom tumbled 8.6 percent to 243.06 pounds, and Alexandria Iron and Steel fell 11.5 percent to 953.01 pounds.

One trader said the Egyptian stock market was especially prone to spiralling retail panic because many Egyptian investors were new to stocks and had borrowed heavily to enter the market.

“Before brokers take a client you have to ask how much money they have. They don’t. People are putting all their money on the market and expecting to double it,” CIBC brokerage’s Bassim Arida said. Other traders said support levels had been broken.