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Thursday, 28 January 2021

Egypt's stock exchange loses EGP 62.3 billion in two days

Doaa A.Moneim , Monday 16 Mar 2020
Egypt
Egypt's stock exchange (Reuters)
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The Egyptian Stock Exchange (EGX) is hemorrhaging for the second day in a row, as the capital market value has lost EGP 32.3 billion on Monday, bringing the total losses in the past two days to EGP 62.3 billion.

The EGX deterioration comes on the back of the coronavirus outbreak.

By the end of Monday’s trading sessions, the total shares that have witnessed trade suspensions reached 100 shares for 100 companies.

In fact, the total losses of the capital market have hit EGP 115 billion -- the greatest loss EGX has ever recorded.

EGX 30 dropped by 7.1 percent and EGX 70 declined by 6.6 percent, bringing the total drop of EGX 30 since the beginning of 2020 to 32.5 percent and EGX 70 to 25 percent.

Foreign gross selling recorded EGP 94.1 billion, accounting for 13 percent of the market volume, while Egyptians' net purchases registered EGP 93.3 billion, and Arabs' net purchases declined to EGP 2.7 billion.

Analyzing EGX latest performance, financial markets expert and general coordinator of the Egyptian-African Economic Council Ayman Foda told Ahram Online that the EGX tolls are record-breaking, surpassing those endured during the global financial crisis of 2008 and the years following the 25 January 2011 Revolution.

“If the EGX maintains its current performance, tolls are expected to hit EGP 100 billion by the end of the week. Moreover, the share trading price has dropped to the levels of 2006,” Foda illustrated.

Foda attributed the EGX deterioration to global and domestic challenges and the rapid spread of coronavirus.

Furthermore, Foda said, the financial market in Egypt is already fragile, lacking a vision for management and a plan to attract investments to the local market.

Dealing with the current situation, Foda urged all concerned parties to set aside EGP 5 billion from the EGP 100 billion package which President Abdel-Fattah El-Sisi has allocated to counter the coronavirus crisis.

“The sum will be directed towards establishing a fund to support the EGX performance. Any stock market reflects the resilience of a country's economy, which helps the investor to pump foreign direct investments into various sectors in the domestic market outside the EGX,” Foda explained.

He also called for a clear strategy for the Egyptian stock market that aims at recovering it and maximising its profits, and drawing up alternative scenarios if things get worse.

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