Egypt’s stock exchange (EGX) has been unresponsive to an urgent stimulus package announced by the prime minister on Tuesday, continuing its deteriorated performance on the back of the COVID-19 outbreak.
The EGX’s total market capital losses for Wednesday recorded EGP 18.84 billion as session trades closed at EGP 493.63 billion.
Wednesday’s session saw a suspension of trades for half-an-hour after exceeding the decline benchmark of 5 percent for the EGX 100, a suspension that lasted until the end of the session.
The EGX 30 traded on 8,756 points, declining by 4.84 percent, while the EGX 70 traded on 927 points, dropping by 5.67 percent.
Egyptian trades saw the lion’s share, accounting for 62.22 percent, followed by foreign trades that accounted for 32.34 percent, while Arab trades accounted for only for 5.43 percent.
Operations by corporations were 62.86 percent, while those by individuals were 37.13 percent.
The EGX’s poor performance was despite the stimulus package launched by the government to save Egypt’s stock market from the deterioration that followed the COVID-19 outbreak, which has affected all stock markets across the world.
Speaking to Ahram Online, financial market expert Mohamed Deshnawy said that the EGX is still under pressure from the COVID-19 crisis despite all the measures adopted by the government to support the EGX.
Deshnawy attributes the poor performance to traders focusing on the negative impacts of the COVID-19 outbreak.
Deshnawy added that, because of the nature of emerging markets, the EGX performance has also deteriorated due to the shortage in liquidity and the declining number of clients.
He added that the market needs to take actions on the ground.
Moreover, the 3 percent interest rate cut that the Central Bank of Egypt introduced will also have a positive impact on listed companies in dealing with the current serious situation and pave the way for them to get loans to finance their operations, Deshnawy said.