Hermes: External Factors Weigh On The Bourse

We retain our bearish outlook for Egypt's benchmark Hermes Index, as ongoing risk aversion in global equity markets is continuing to weigh on the bourse, which has lost 11.8% since the beginning of May. The recent weakness has been largely due to foreign investors selling telecom shares, which have suffered from their heavy exposure to the global economy. Indeed on June 10, shares of Orascom Telecom, the market's heavyweight accounting for 19.2% of the index, fell round 4%, while the Egyptian Company for Mobile Services and Telecom Egypt traded down a respective 1.7% and 0.8%.

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