Egypt indexes drop as Goldman Sachs report hits OT

CAIRO, Sept 7 (Reuters) - Egypt's stock indexes declined on Sunday, led by a 2.77 percent dip in heavyweight Orascom Telecom ORTE.CA(ORTEq.L: Quote, Profile, Research, Stock Buzz) after Goldman Sachs downgraded it, citing continuing operating difficulties in Pakistan and Algeria.

Orascom Telecom shares ended at a fresh year closing low of 47.65 Egyptian pounds ($8.81), helping drag the benchmark CASE 30 index .CASE30 0.7 percent lower to 8,342.25 points. The Hermes index .HRMS lost 0.78 percent to 723.28 points.

"The Goldman Sachs report had an impact," said Teymour el-Derini of Beltone Financial. "OT took the market down."

Goldman Sachs dowgraded OT on Friday to "neutral" from "buy" and cut its price target to 65 pounds from 100. The news had helped pull OT's GDR shares down 5.68 percent on Friday, dealers said.

Overall on Sunday, Egypt's broader CIBC index .CIBC was 0.02 percent lower at 404.74 points as local investors dominated trade.

But a surge in real estate developer Talaat Moustafa TMGH.CA helped temper market losses, gaining 12.58 percent to 6.71 pounds as it continued to recover from declines after the firm's former chairman was charged in a murder case last week.

Traders said investors were returning to the stock after the company said last week it had replaced its chairman and would meet all its project obligations on time.

"To an extent, nothing worse can happen to the stock now," said Mohamed Tawfiq of Delta Rasmala Securities.

Market heavyweight Orascom Construction Industries OCIC.CA(OCICq.L: Quote, Profile, Research, Stock Buzz) also gained, adding 2.11 percent 363 pounds as traders engaged in bargain hunting. The shares are well below a year closing high of 485 pounds set in April.

But several other big caps slipped lower, with investment bank EFG-Hermes HRHO.CA(HRHOq.L: Quote, Profile, Research, Stock Buzz) losing 3.16 percent to 47.52 pounds. Telecom Egypt ETEL.CA(ETELq.L: Quote, Profile, Research, Stock Buzz) dropped 4.34 percent to 15 pounds, and dealers said it was following OT lower. ($1 = 5.4061 Egyptian pounds) (Writing by Cynthia Johnston)