Moody's downgrades Egyptian debt

31st Jan 2011 12:37

Ratings agency Moody's has downgraded its rating on Egypt's debt as large-scale demonstrations against the authoritarian rule of president Hosni Mubarak continue.Moody's now has a Ba2 rating on the North African country, from Ba1 previously, and changed its outlook to 'negative' from 'stable'."Today's rating action was prompted by the recent significant rise in political event risk and concern that the policy response could undermine Egypt's already weak public finances," Moody's said.The downgrade comes as tens of thousands of Egyptians protest in the country's cities, demanding an end to Mubarak's rule.London-listed shares have been volatile since opening Monday morning, with the Egyptian situation continuing to unnerve traders.Shares in TUI Travel, the operator of travel brands such as First Choice, fell back. An update on the website of Thomas Cook, also lower today, says it has cancelled flights to Luxor on Wednesday, but flights to Sharm el Sheik operate as normal. All flights to Tunisia, whose president recently fled the country in response to demonstrations, have been cancelled up to 27 February.Shares in FTSE 250 listed gold miner Centamin Egypt have also been in focus recently. After sharp falls last week the shares have rallied partially.The crisis has also been pushing up oil prices, with prices for Brent Crude moving above $100 a barrel for the first time in more than two years. Although Egypt is not an oil producer, a large amount of oil passes through the Suez Canal.