Not Even Egypt’s Deadliest Terror Attack Can Faze Stock Traders

CAIRO (Capital Markets in Africa) – Holders of Egyptian stocks seem to have developed thick skin.

The benchmark index rose 0.8 percent in Cairo on Sunday even after more than 300 people were killed in a militant attack in northern Sinai on Friday.

“No one is in shock as investors have, unfortunately, become immune to such events,” said Ashraf Akhnoukh, the director of Middle East and North Africa sales trading at Arqaam Capital. Still, “there is negative sentiment triggered by the attack.”

Repeated attacks highlight the challenges President Abdel-Fattah El-Sisi faces in his efforts to restore security and mobilizing private investments needed to revive the economy after years of turmoil. Egypt is fighting a militancy that has intensified since El-Sisi as army chief led the ouster of his predecessor in 2013.

When 16 policemen were killed in an ambush last month, the gauge fell less than 0.1 percent. When two churches were bombed in April, stocks declined for two days then recovered on the third, trimming the five-day drop to 1 percent.

Sixteen members of the benchmark EGX 30 Index gained, while 10 declined and four were unchanged. Eastern Tobacco rose 3.8 percent and ElSewedy Electric Co. added 2.3 percent. The gauge has advanced 15 percent this year.

The target was a mosque frequented by Sufis, a mystical sect of Islam whose adherents are viewed as heretics by fundamentalists. There was no claim of responsibility for Friday’s assault, but initial investigations showed militants hoisted the Islamic State flag during the attack. 

“These kinds of attacks are not seen as destabilizing the regime itself, that’s why we’re not seeing a plunge,” said Khaled Nagah, head broker at Cairo-based Mega Investments.

Source: Bloomberg Business News