Eastern Company S.A.E., Egypt's defensive tobacco monopoly and a cornerstone of dividend-focused portfolios, crashed 7.5% to 35.0 EGP on Thursday, March 12, 2026, dragging the EGX 30 index down 0.86% to 46,791 points, according to official Cairo Exchange data. This stunning collapse occurred despite Middle East geopolitical tensions driving Brent crude up 5.0% to $96.54/barrel, creating a sharp divergence between domestic defensive plays and cyclical commodity exporters.
Despite the benchmark index decline, market breadth remained positive with 25 stocks advancing against 16 declining and 5 unchanged out of 46 active issues, indicating weakness concentrated in heavyweights. Trading volumes reflected selective profit-taking, particularly violent in tobacco and banking sectors, as operators reassessed positions following the Egyptian pound's depreciation to 52.29 EGP/USD (+0.64%), reinforcing inflationary concerns over local purchasing power.
Sector Rotation: From Tobacco to Fertilizers
Eastern Company's (EAST) 7.5% plunge defies traditional market logic. The firm, renowned for operating margins exceeding 20% and consistent dividend distributions, typically exhibits a beta below 0.5. Thursday's wipeout erased approximately EGP 3 billion in market capitalization, likely fueled by institutional profit-taking after solid year-to-date performance, but also by fears of tobacco excise tax hikes amid increased fiscal pressure, reports Financial Afrik.
Conversely, fertilizer and hydrocarbon stocks rode the commodity wave. Abu Qir Fertilizers and Chemical Industries (ABUK) surged 6.4% to 85.0 EGP, while Misr Fertilizer Production Company (MFPC) gained 3.8% to 43.51 EGP and Alexandria Mineral Oils Company (AMOC) climbed 3.6% to 8.88 EGP. Egypt, a net fertilizer exporter utilizing domestic natural gas feedstock, directly benefits from international price spikes triggered by Gulf supply chain disruptions. "Egyptian fertilizer producers' margins expand when Brent crosses $95, as export contracts are indexed to spot gas and oil prices," explained an analyst cited by Medias24.