Egypt's stock market shares have plunged by 22 billion Egyptian pounds, which is over $3bn, in Sunday trading as low oil prices dragged down regional economies.

Oil prices have shed nearly half their value since late June, including a four percent tumble on Friday that left benchmark US oil prices at $57.81 a barrel, their lowest level since May 2009, when the US was still in recession.

Stock broker Yasser Rashad said there was an immediate dip at the start of Sunday's session over fears that share prices would continue to drop for the rest of the week.

Wael Ziada, head of research at regional investment giant EFG Hermes, said the drop was a knock-on effect caused by the steep decline in oil prices. The markets in Egypt and Gulf Arab countries "are correlated in terms of their performance because the investor base intersects."

The benchmark EGX30 index closed 5.23 percent down, with 170 stocks declining and just five showing gains.

Relying on aid

Egypt is a net importer of oil products, therefore "we should benefit from the decline in oil prices," Ziada said.

However, Egypt relies heavily on aid from Gulf countries to keep its economy afloat. Any net benefit for Egypt from the decline in oil prices hinges on the willingness of the nation's main Gulf benefactors - Saudi Arabia, the United Arab Emirates and Kuwait - to continue to help Egypt despite their declining oil revenues. The three have pledged to continue to help Egypt's ailing economy.

The three oil-rich nations have pumped billions of dollars into Egypt's emptying coffers since the overthrow last year of President Mohamed Morsi. The three view Morsi's Muslim Brotherhood, an Islamist group, as a threat to their security.

A Bank of America Merrill Lynch Global Research report published last week said that "although GCC support may be somewhat less forthcoming at current oil prices, enough is likely to be provided to muddle through for now."

Besides Saudi Arabia, Kuwait and the Emirates, the Gulf Cooperation Council also includes Bahrain, Qatar and Oman.

Last month, an International Monetary Fund official said that Egypt's economy had begun to recover after nearly four years of political turmoil. 

Source: Associated Press