Egypt ETF Not Liking Election Results

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 EGPT 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 credit, 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 possible outcome there remain more reasons to avoid than embrace this ETF. In the wake of Monday violence in Egypt, other ETFs with significant Africa exposure are mixed today. The Market Vectors Africa Index ETF AFK, 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 FRN, an ETF with an almost 10% weight to Egypt, is modestly higher. The PowerShares MENA Frontier Countries ETF PMNA has a 19.5% allocation to Egypt and is off 4.4% today. For more on ETFs with exposure to Egypt, please click HERE.