Egypt Stocks Drop After Russia Suspends Flights to Country

Egypt's benchmark stock index plunged 4.4 percent on Tuesday after steadily declining since Russia suspended flights to Egypt following the Oct. 31 Russian plane crash in the Sinai Peninsula.

U.S. and British officials have cited intelligence reports as indicating that the Russian passenger flight from the Sinai resort town of Sharm el-Sheikh to St. Petersburg was likely downed by a bomb on board. All 224 people onboard were killed in the crash, most of them Russian tourists.

Last Wednesday, the U.K. suspended flights to Sharm el-Sheikh and two days later, Russia went a step further, suspending all flights to Egypt amid airport security concerns — a move that threatened to further devastate the Egyptian tourism industry, already suffering after years of political turmoil.

The drop is caused by negative internal and external factors, said Amr Elalfy, global head of research at Mubasher Financial Services.

"Internally, you have the Russian plane, the impacted tourism, and the countries that have suspended flights to Sharm el-Sheikh," said Elalfy.

In addition, the arrest on Sunday of Salah Diab, the largest shareholder of the independent daily Al-Masry Al-Youm who was detained with his son, and also the detention the same day of leading investigative journalist and human rights advocate Hossam Bahgat, also dampened the mood in the market, said Elalfy.