With President Obama and challenger Mitt Romney throwing barbs
at each other on a almost daily basis, it may feel as though the
U.S. is the only holding country holding a critical election this
year. That's not the case as investors in the Market Vectors
Egypt ETF (NYSE:
) well know.
The lone Egypt-specific ETF, which had almost $44 million in
assets under management at the start of trading Tuesday, is down
more than 4% on light volume early in today's session. The
culprit is obvious: Egyptians don't like their choices for the
June 16-17 runoff that will supposedly decide the country's first
freely elected president.
Ahmed Shafiq, deposed President Hosni Mubarak's last prime
minister, will be squaring off against Muslim Brotherhood
candidate Mohammed Morsi. What that boils down to is a choice
between a potential return to the old way of doing business in
Egypt or a move to an extreme religious state.
Clearly, neither choice is appealing and the market is saying
as much with the drubbing EGPT is currently enduring. To its
EGPT had been holding up quite nicely amid
serious carnage for emerging markets ETFs lately, but that good
work appears to be going by the wayside today
Further declines put EGPT at risk of violating its 200-day
moving average, a move that would further confirm EGPT's bear
market status. Down more than 25% from its most recent high, EGPT
is already in bear market territory and with an election looming
where the average Egyptian isn't likely to be fond of either
there remain more reasons to avoid than embrace
In the wake of Monday violence in Egypt, other ETFs with
significant Africa exposure are mixed today. The Market Vectors
Africa Index ETF (NYSE:
), which features an allocation of more than 18% to Egypt, is
higher by more than two-thirds of a percent while the Guggenheim
Frontier Markets ETF (NYSE:
), an ETF with an almost 10% weight to Egypt, is modestly higher.
The PowerShares MENA Frontier Countries ETF (Nasdaq:
) has a 19.5% allocation to Egypt and is off 4.4% today.
For more on ETFs with exposure to Egypt, please click
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