Political uncertainty hits Cairo stocks

Political uncertainty hit Egyptian stocks again on Sunday at the start of a week in which Egyptians will vote in a referendum on changing the way the country chooses its president, brokers said. Regional mobile operator Orascom Telecom (OT) bucked the bearish trend on a Citigroup report suggesting the target price should be 660 Egyptian pounds ($113.79). OT last traded up 4.4 percent at 492 pounds. Citigroup in a report on OT affiliate company MobiNil, one of the two mobile operators in the Egyptian market, set a target price of 200 pounds. But the shares fell 2.4 percent to last trade at 172.49 pounds.
Brokers said investors were reluctant to move into the market until the referendum on Wednesday ends the debate over the rules for presidential elections.
Opposition groups have asked Egyptians to boycott the referendum, saying the conditions for candidates to stand for the presidency are too restrictive. Investors are worried about protests and possible violence, brokers said.
Another political factor has been relations between the government and the United States, which looked set for trouble after President George W. Bush added to the pressure for reform.
But a visit to the United States by Prime Minister Ahmed Nazif and his talks with Bush at the White House last week seemed to have reassured the market.
The benchmark Hermes index fell 0.6 percent to 35,568.97 points. The broader CIBC index dipped 2.5 percent to end at 130.90 points.
Interbank rate falls
The median overnight interbank rate on the Egyptian pound fell to 10-1/2 percent on Sunday from 11 percent on Thursday as demand dipped towards the end of a two-week central bank period, traders said.
Six out of nine banks contacted by Reuters dealt overnight money, at rates between 10-1/4 and 11-1/4 percent, compared to a range of between 10-5/8 and 11-1/4 percent on Thursday.
Two of the banks had dealt one-week money, at rates of between 10-1/2 and 11-1/4 percent.
The overnight CAIBOR rate fell slightly to 10.5595 from 10.5715 percent. The one-week CAIBOR fell to 10.7768 from 10.7798 percent.
The pound weakened slightly against the dollar at 1000 GMT to a rate of 5.7958 pounds to the dollar from a closing weighted average of 5.7954 on Thursday.