Aug 23, 1:24 PM EDT

Egypt stock market falls to lowest level in almost 2 years


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CAIRO (AP) -- Egypt's stock market fell to its lowest level in almost two years on Sunday, as global markets sag and investors sober up from a buying binge surrounding a much-hyped economic conference last spring, analysts said.

The main EGX 30 stock index kicked off the trading week by closing at 6784.09, its lowest level since December 2013. The 5.43-percent drop came after a steady fall last week, and as other Middle Eastern markets also tumbled, and it follows an overall global slowdown. Dubai's stock market closed nearly seven percent lower after a further slide in oil prices.

"It's a global sell-off; there's lack of foreign investments, given the macro-economic headwinds," said Amr Elalfy, global head of research at Mubasher Financial Services. "But there were also great hopes and expectations surrounding the economic development conference last March, but people are realizing now that most of them have not yet materialized and that these reforms take time."

Led by general-turned-politician President Abdel Fattah el-Sissi, Egypt is trying to send the message that it's making the necessary reforms and is open for business. Another issue for foreign investors is the valuation of the pound currency, which they see as overvalued.

In an auction Sunday, the central bank did not ease its current rate, keeping it steady at 7.73 against the dollar. A weaker pound could boost foreign investment and exports. Elalfy said both that and delays in setting up a legislature, absent for three years, were clouding over investor sentiment.

"The central bank has not been very clear as far as setting the monetary policy," he said. "There have been some limited measures, but maybe the devaluation has not been enough yet. Also the delay in forming a parliament is actually creating some doubt about economic policies, and how they will be implemented later on."

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