CAIRO: Egypt's main index extended Sunday's heavy decline, slipping 2.04 percent to a fresh two-year low as foreign investors exited the local market on continued concerns over US growth and European sovereign debt. The index, which tumbled 4.2 percent on Sunday, is at its lowest level since April 2009. Stocks popular with foreign investors suffered some of the biggest declines on Monday. Orascom Construction Industries (OCI) saw the heaviest traded volume on the Egyptian Exchange, dropping 2.5 percent. Orascom Telecom dipped 3.8 percent and EFG-Hermes 4.6 percent. "There is a market panic given the global drop seen yesterday in the US," said Khaled Darwish of Cairo Capital Securities. "Egypt, like other markets, follows suit." Some traders see a rebound by the end of the week as investors are drawn by knocked-down stock prices. "The market is likely to extend losses for the coming sessions but we may see a rebound by the end of the week," said Darwish. "The price of stocks will be low enough by that point to attract investors." The EGX30 ended at 4,701 points. Most Gulf markets edged lower on Monday on lingering investor concerns about slowing global growth but declines were stymied after the European Central Bank said it was buying bonds of euro zone strugglers Italy and Spain. The Saudi market, the largest Arab bourse, was trading lower after recovering slightly on Sunday, following its drop to a five-month low on Saturday on a US downgrade. The index was trading 0.7 percent lower at 1208 GMT. The US rating downgrade by Standard & Poor's sent regional bourses to lows of at least several months on Sunday, with an uncertain debt situation in Europe weighing. "The downgrade is not a major issue for US, it can survive with such a rating but the bigger issue is the outlook on global growth," said Marwan Shurrab, vice-president and chief trader at Gulfmena Investments in Dubai. "The GDP numbers in the last week show slowness in growth and the recovery is not going as expected," he added. Dubai's index ended slightly lower, giving up modest earlier gains. It lost 0.8 percent, after slumping to a 20-week on Sunday. Abu Dhabi's index rose from Sunday's 10-week low, ending up 0.4 percent. Property stocks supported, with Surouh Real Estate and Aldar Properties both closing 0.8 percent higher. In Qatar, the index dropped 0.8 percent to close at 8,215 points. Bargain-hunting helped limit declines in Oman, whose benchmark ended 0.8 percent lower. "Overall the risk reward ratio is turning positive with the market pricing in for most of the uncertainties," said Kanaga Sundar, head of research at Gulf Baader Capital Markets in Muscat. "The market is going beyond fundamentals right now and is looking more at risk aversion. Already our market has underperformed for the current year and we may see institutions bottom-fishing for blue-chips," he added. The main drag was heavyweight Bank Muscat which fell 0.9 percent. Oil and gas industry services firm Renaissance Services slipped 2 percent.
