[2008-05-16]  Egypt index tumbles, Orascom leads falls
Egypt's main stock index posted its sharpest single-day drop in almost 23 months on Thursday as investors dumped shares of Orascom Telecom after it said a share buyback offer was oversubscribed.
Shares of Orascom tumbled 6.43 percent to 74.50 Egyptian pounds ($13.90) and the index shed 4.66 percent to 10,169.27 points.
Orascom said shareholders offered to sell more than three times the amount of shares it said it would buy back in a tender offer.
"People had extra shares they wanted to sell," said Karim Hosny, account officer at Pharos Securities in Cairo. "With these market conditions of course they were selling."
Shares of Orascom Construction Industries extended losses to a ninth consecutive session, dropping 1.54 percent to 361.05 pounds.
Orascom Construction's earnings will hit by a tax announced earlier this month on free zones, where Orascom has fertiliser operations, said Tarek Shahin, analyst at Beltone Financial.
Shares of monopoly fixed-line operator Telecom Egypt plunged 7.26 percent to 17.51 pounds after it reported its second straight decline in quarterly profit.
Telecom Egypt said its net profit fell 4.8 percent to 557 million Egyptian pounds, falling short of expectations.
"Results were way below expectations," said Teymour el-Derini, trader at Beltone Financial.
Egypt's Hermes index dropped 4.30 percent to 88,102.07 points and the broader CIBC index shed 4.17 percent to 503.21 points.
Source: © Guardian News and Media Limited 2008