Egyptian Stock Market Tumbles Due To Anti-Mubarak Demonstrations

Egypt-ProtestThe Egyptian stock market dropped the most since May, 2010 after 100,000 protested against the Mubarak government.

The benchmark EGX 30 index fell 5 percent, the greatest drop since May 25, to 6,455.07 at 10:33 a.m. in Cairo, extending its decline this year to 9.6 percent. In addition, the Egyptian pound reached a 6 year low of 5.830 against the US dollar after closing at 5.816 on Monday. The Egyptian markets were closed for yesterday’s holiday.

The protests, larger than usual in Egypt, were inspired by a popular revolt that forced Tunisia’s President into exile on Jan. 14. The risk of Tunisia’s revolution spreading to other Middle Eastern countries “is not negligible,” according to Barclay’s Capital Analysts. The cost of insuring Egyptian government debt increased 27 basis points on Tuesday to 329. This is the highest since June 2009.

The average yield on 182-day treasury bills rose 1.9 % to 10.2 percent.The average yield on Egypt’s 91-day bills advanced 3.2 % to 9.49 percent yesterday.