November 25, 2012 / 10:28 AM / in 5 years

Egyptian share prices plunge on Mursi decree

CAIRO (Reuters) - Egyptian share prices plunged on Sunday, with the main market index falling by nearly 10 percent in the first trading session since President Mohamed Mursi ignited a political crisis by expanding his powers.

A car passes by with a poster of presidential candidate Mohamed Mursi, the head of the Muslim Brotherhood's political party as people stand in silence for the second anniversary of the death of Egyptian Khaled Said, in the port city of Alexandria June 6, 2012. REUTERS/Mohamed Abd El Ghany

The price falls were the biggest since March 2011, when the market reopened after the popular uprising that ousted Hosni Mubarak, with the EGX30 index .EGX30 down 9.45 percent by 0945 GMT.

“We’re not the same Egypt. Investors know that Mursi’s decisions will not be accepted and that there will be clashes on the street,” said Osama Mourad of Arab Financial Brokerage.

Many individual stocks were down by the maximum 10 percent allowed under exchange rules, including Orascom Construction Industries OCIC.CA, Commercial International Bank (COMI.CA), Orascom Telecome and Media Technology (OTMT.CA) and EFG Hermes (HRHO.CA).

“We are back to square one, politically, socially, unrest, clashes and so on,” said Mohamed Radwan of Pharos Securities.

Investors had been growing more confident about the political outlook in recent months, hoping the newly elected government would bring stability to the country after 18 months of political and economic turmoil, and the index had risen 35 percent by the end of last week since June when it became clear that Mursi had been elected president.

But Mourad said Mursi’s new decree had now made it more dangerous to do business in Egypt.

“If an investor wants to appeal something in court he won’t be able to, because all laws and regulations that come out of the presidency cannot be appealed,” he said.

Editing by Greg Mahlich

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