Main market indexes see drop on Wednesday

The leading stock exchange index EGX 30 slightly dropped on Wednesday by 0.03 percent.

This trend confirms the worsening outlook pronounced by a number of investors on the economy and the country’s future in the past few weeks, pushing some financial experts to announce investors were losing confidence.

In the wake of the euphoria following the massive demonstrations of June 30, the EGX 30 rose by 4.6 percent. It gained a further 7 percent following Morsi’s removal on July 3. The consecutive massive financial and in-kind support from the UAE and Saudi Arabia eased the pressures on the Egyptian pound and foreign reserves, reassuring investors.

However, the stock exchange has followed a bumpy trajectory since the unfolding of these latest events. The EGX 30 Wednesday is on the same level as it was July 4, but that period has seen important variations in the index over the period as a new cycle of violence unfolded around the country.

On Tuesday, EU foreign affairs chief Catherine Ashton met with a number of actors, included ousted President Mohamed Morsi. This visit can be interpreted as a further sign of the international pressure on the new regime to limit repression on the supporters of the former president. The prospect of a smooth political settlement between the Muslim Brothers and the new regime appears less and less likely, however.

The other indexes follow a similar trend on Wednesday, with the EGX 70 index down by 0.27 percent and the EGX 100 down slightly by 0.23 percent.