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Friday, 05 March 2021

Egypt’s securities issuance drops by 14.5%, financial market performance improves in 2020

The Financial Regulatory Authority made its announcement as part of its year ender report reviewing financial activities during 2020

Doaa A.Moneim , Tuesday 19 Jan 2021
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Egypt’s issuance of securities saw a drop of 14.5 percent in 2020, reaching EGP 187.2 billion, down from EGP 219.1 billion in 2019, due to the COVID-19 crisis and its related impacts on the financial markets, the Financial Regulatory Authority (FRA) announced.

The FRA made its announcement as part of its year ender report, which was released on Tuesday, reviewing financial activities during 2020, with a focus on non-banking financial performance.

According to the report, issuance of securitisation bonds increased by 9 percent in 2020 to record EGP 24.1 billion, up from EGP 22.1 billion in 2019.

On Islamic sukuk, the report revealed that Egypt issued Islamic sukuk with a total value of EGP 5.1 billion.

The total trading in the financial market’s value jumped in 2020 by 68 percent to record EGP 689.6 billion, up from EGP 409.7 billion in 2019, according to the report.

Moreover, equities trading in the financial market rose in 2020 by 37 percent to reach EGP 311.6 billion, up from EGP 226.8 billion in 2019.

The report also noted that bonds’ trading value significantly increased in 2020 by 107 percent to record EGP 378 billion, up from EGP 182.9 billion in 2019.

For Egypt’s exchange market (EGX), the report said that it recorded uneven performance during 2020, with a decline of the EGX 30 by 22 percent compared to 2019, while small and medium shares drove the increase of EGX 70 and EGX 100 by 69 percent and 42 percent, respectively.

The EGX 30 decrease did not significantly affect the capital market, which saw a drop by only 8.2 percent in 2020, gaining EGP 649.9 billion, down from EGP 708.3 billion in 2019.

On insurance and private insurance funds, the report noted that the economic slowdown in the fourth quarter of FY2019/2020 caused a decline in instalments growth of 14 percent in 2020.

As a result, insurance instalments’ values increased to 40.1 billion in 2020, up from EGP 35.2 billion in 2019.

Meanwhile, insurance companies’ investments in the Egyptian market raised in 2020 by 5.7 percent to reach EGP 107.8 billion, up from EGP 102 billion in 2019.

In addition, insurance companies’ assets’ values increased by 8.8 percent in 2020 to record EGP 128.6 billion, up from EGP 118.2 billion in 2019.

Furthermore, the estimated value of private insurance funds in the Egyptian market rose by 10 percent in 2020 to record EGP 83.4 billion, up from EGP 75.8 percent in 2019, according to the report.

Regarding microfinance activity, the report showed that the sectors’ finance balance grew by the end of the first quarter of FY2019/2020 by 40 percent to reach EGP 17.8 billion, up from EGP 12.7 billion in the first quarter of FY2018/2019.

Yet, the report pointed out that the economic slowdown in Egypt, caused by the pandemic, led to a contraction of the annual growth of this balance to 13.3 percent, reaching EGP 18.7 billion by the end of 2020, compared to EGP 16.5 billion in the end of 2019.

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