©2010 Bloomberg News
May 25 (Bloomberg) — Egypt’s EGX 30 Index headed for a so- called bear market as investors sold stocks on concern tensions on the Korean peninsula will escalate and Europe’s worsening debt crisis will hurt the global economic recovery.
Orascom Construction Industries, the biggest publicly traded builder in Egypt, dropped to the lowest level since November. Orascom Telecom Holding SAE, the largest mobile phone company in the Middle East, slumped to the lowest level in more than four months. The 30-stock benchmark index retreated 5.6 percent to 5,964.59, the lowest intraday level since Dec. 1, bringing the drop from the April 27 peak to 22 percent.
The MSCI Emerging Markets index declined 3.6 percent, set for the lowest close since Sept. 4. The North Korea Intellectuals Solidarity group said on its website that the country’s military was put on alert for combat. The euro dropped to the lowest level against the yen since November 2001 and fell against the dollar.
“We are seeing a global retreat from risk, which is affecting all markets,” said Simon Kitchen, senior economist at Cairo-based EFG-Hermes Holding SAE. “Investors are seeking safety in U.S. treasuries and the U.S. dollar and yen. As the Middle East equity market most open to foreign investors, the Egyptian market has slumped.”
Egypt’s benchmark index has retreated 13 percent since the end of March on concern an uncoordinated response to the credit crisis in Europe would scupper a global recovery. The euro declined after the International Monetary Fund urged Spain to do more to overhaul its ailing banks, adding to speculation Europe’s financial institutions may face more losses…..HERE’S MORE