Mubarak transfers power to Suleiman, ignores calls for ouster
Thursday, February 10, 2011; 4:34 PM
"I decided to transfer powers of the presidency to the vice president according to constitutional guidelines," Mubarak, 82, said in a televised speech from the presidential palace in Cairo. Mubarak, wearing a dark suit and tie, pledged to die on Egyptian soil.
Mubarak is under pressure to become the second Arab leader to resign in less than a month after a popular revolt ousted Tunisian President Zine El Abidine Ben Ali on Jan. 14. The protests in Egypt, which the United Nations says have left about 300 people dead, sparked concern that contagion would grip a region that holds more than 50 percent of the world's known oil reserves.
The announcement came after the army's top military body gathered in Cairo to "safeguard the interests" of the nation as Mubarak's pledge last week to step down in September failed to quell unrest. Crowds poured into Tahrir Square, the epicenter of the protests, to hear the speech, waving national flags and chanting "the thieves have robbed Egypt, but the army is protecting you."
Egyptian dollar bonds rallied earlier on optimism the country's crisis was nearing an end, pushing the yield on the 5.75 percent security due April 2020 down 10 basis points to 6.49 percent.
The Market Vectors Egypt Index ETF rose the most in a week, climbing 5.3 percent to $18.66 on the New York Stock Exchange's Arca.
"These young people have blown the whistle, they've served a wakeup call to all of us," newly appointed Egyptian Finance Minister Samir Radwan told Sky News. "We've ignored them too long, we've taken them lightly, it's about time we took them seriously."
Suleiman, named vice president two weeks ago, has opened talks with opposition groups including the Muslim Brotherhood. The discussions are the only alternative to the "chaos" of regime change, he said yesterday, a comment interpreted by some as referring to a possible coup.
The price of oil, which rose as high as $92.84 per barrel on Jan. 31 as Egypt's crisis worsened, traded at $86.89 at 1:01 p.m. New York time.
Egypt's benchmark EGX 30 Index tumbled 16 percent in the week to Jan. 27 and may reopen on Feb. 13. The country's central bank intervened in currency markets two days ago to stem a decline in the pound.
"The one thing I worry about is a certain amount of capital outflow, especially when the stock market is reopened," said Mohamed El-Erian, chief executive officer at Pacific Investment Management Co.
The cost of insuring Egyptian sovereign debt with five-year credit default swaps today fell 17 basis points to 338, according to CMA prices.
Egypt has been one of the biggest recipients of U.S. aid since Mubarak came to power. His government has helped Israel impose a blockade on the Gaza Strip, a policy not supported by most Egyptians, and opposed Iran's nuclear program.
At the same time, Mubarak controlled a regime condemned by the U.S. for its lack of basic freedoms at home, for its widespread suppression of political opposition and for the torture of Egyptian citizens, a practice which was often carried out with impunity, according to the State Department and human rights groups such as Amnesty International.