After the Black Monday, EGX faced many fluctuations.
On 13 and 26 August, it recorded a market cap loss of EGP 16 billion and EGP 6 billion, respectively,
However, on 14 and 27 August, it recorded a market cap gain of EGP 13.5 billion and EGP 13.2 billion, respectively, according to data from EGX.
Continued profits projected till end-2024
Corporate Governance Manager at EGX Ahmed Elsayed and Investment Manager at Geos for Trading and Contracting Hussam Eid expressed confidence that EGX will continue to generate profits through the end of 2024.
This positive outlook is attributed to the fact that many companies are currently trading at prices lower than their financial results warrant.
Eid anticipated that the main index would reach new highs in the last quarter of the year, due to the ongoing positive performance and sustained trend towards purchasing and cash inflows.
Moreover, he noted that companies listed on the EGX across various sectors reported significant profit rates in the first half (1H) of 2024, leading to increased purchasing activity by Egyptian and foreign investors.
However, Elsayed described the market disturbance experienced on Black Monday as an unwarranted panic, which was short-lived.
Black Monday drop
On 5 August, the Black Monday, global stock markets experienced significant losses.
Tokyo’s Nikkei 225 fell by 12.4 percent, marking its largest one-day percentage drop since October 1987.
The S&P 500 dropped by three percent, its worst day in nearly two years.
The Dow Jones Industrial Average declined by 2.6 percent or 1,033 points, while the Nasdaq Composite fell by 3.4 percent.
Additionally, the EGX saw losses, with a market cap decline of EGP 56 billion and the EGX30 index dropping by 2.33 percent to 28,506.6 points, causing global economic concerns.
Eid noted that stocks rebounded shortly after the initial decline, attributing the Black Monday drop to fears of a global economic crisis that led to declines in global stock markets, including the EGX.
EGX indices fell by over 1,500 points early in August but later improved due to economic stability and increased purchases by Egyptian institutions and foreign investors.
As a result, all indices reached support levels, with the main index reaching 17,000 points and surpassing its resistance level of 12,000.
Elsayed acknowledged a cultural aversion among Egyptians toward investing in the EGX, often perceiving it as a market with high risks of loss.
However, he emphasized that risk can be mitigated through diversification, focusing on promising companies and investing through funds managed by specialized professionals.
Furthermore, Elsayed and Eid highlighted ongoing challenges for the EGX, including a decade of weakened performance due to the lack of new company offerings and geopolitical tensions.
Eid suggested that the government should introduce incentives such as tax benefits, reduced transaction costs, and lower registration fees for Egyptian exchanges to enhance market attractiveness.
Both experts recommended reactivating the offering programme and listing new and promising companies to stimulate investment.
Egyptian stock market performance
In July, the EGX reported a total traded value of EGP 598.3 billion and a trading volume of 11,895 million securities over 1,306 thousand transactions.
In addition, stock trading represented 10.66 percent of the total market value for the month.
Egyptians accounted for 88.0 percent of the traded value in listed stocks, foreigners 5.8 percent, and Arabs 6.2 percent.
Foreign investors were net sellers with a net of EGP 1.4 billion, and Arabs were net sellers with a net of EGP 1.4 billion.
Since the beginning of 2024, Egyptians have represented 85.8 percent of the traded value in listed stocks, foreigners 7.2 percent, and Arabs 7.0 percent.
Meanwhile, foreign investors have been net buyers by EGP 1.7 billion, while Arabs have been net sellers by EGP 6.6 billion.
Short link: