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Sunday, 12 July 2020

Egypt’s exchange loses EGP 11.5 bln, regains EGP 2.3 bln this week due to coronavirus fears

Doaa A.Moneim , Thursday 2 Apr 2020
Cairo
Traders are seen working below the Egyptian Exchange bell at the stock exchange in Cairo (Photo: Reuters)
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Although the Egyptian Exchange (EGX) regained EGP 2.3 billion of its capital market, the net EGX’s losses over the week recorded EGP 11.5 billion after a determined performance to offset its losses following governmental and banking initiatives to invest in the EGX in an effort to reverse the harsh impacts of the COVID-19 crisis.

The EGX capital market opened at EGP 539.915 billion by the beginning of the week, and closed at EGP 528.405 billion by the end of Thursday's trading sessions.

On Thursday, Egyptians' purchases dominated the trades by 69.72 percent, while foreigners' purchases accounted for 19.96 percent amid the dominance of institutions' purchases with 81.49 percent.

Financial markets expert Mohamed Deshnawy told Ahram Online that the performance of the EGX over the week continued to deteriorate due to COVID-19 fears that reflected on the stock markets globally.

He added that the EGX has unfortunately not been able to respond to all the procedures that Egypt’s government and banking system have adopted to boost it.

President Abdel-Fattah El-Sisi announced on 22 March that Egypt's central bank will allocate EGP 20 billion ($1.28 billion) to support the stock exchange during the economic slowdown caused by the coronavirus pendamic.

Deshnawy illustrated that the main sectors that have been affected over the week include the banking, tourism, real-estate, and financial services sectors.

He expects the manufacturing, pharmaceutical and hospitals sectors will witness a boost in next week's trades.

On the other hand, financial markets expert Ayman Foda said foreigners' sales in the EGX deteriorated, recording EGP 1.28 billion over the week.

He added that domestic institutions' net purchases registered EGP 1.32 billion this week, driven by the initiatives of the CBE, National Bank of Egypt and Bank Misr to invest in the EGX.

Nonetheless, Foda expected the EGX performance to improve next week due to the imminent launch of the CBE's EGP 20 billion investment initiative and the CBE’s three percent cut in interest rates.

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