(AFP Photo)
EGX 30, Egypt’s benchmark index, closed on Tuesday after a rise of 4.94%. The market surge comes one day after the Egyptian army promised to provide a roadmap for the country if the president and opposition cannot arrive to a solution.
“The military statement which was issued yesterday is one of the main reasons of today’s rise,” said Ashraf Abdel Aziz, a market expert, claiming that the session was bolstered by Egyptian investors who were reassured by the army’s remarks.
On Monday afternoon the Supreme Council for the Armed Forces announced a 48 hour deadline by which President Mohamed Morsi and his opposition must resolve their differences; it stated that after the deadline it would intervene and implement a roadmap for the country.
The trade volume on Tuesday had its highest rise in the past four months, reaching EGP 510m.
Index EGX 70, which includes small and medium-sized companies, soared by 5.74 %, while the broader EGX 100 increased by 4.4 %.
Commenting on the statement, Abdel Aziz said “investors felt a little more comfortable and calm after the 48 hours ultimatum was announced.” He also attributed the rise to “a market rebound after weeks of losses.”
Meanwhile, Mostafa Badra, an economic and market expert said that today the stock market “was celebrating.”
“Stock usually reflects what is happening in the Egyptian street, and today stocks responded swiftly to the Egyptian society, especially after the military declaration,” he said.
Badra asserted that Tuesday’s market rise also was attributed to the beginning of the new fiscal year 2013-2014, when many people have liquidity to buy more shares and to push up the market.
“Today’s volume of transaction was big, and prices of shares plummeted to EGP 5, 4 and 3 compared to EGP 10; that motivated the buying process,” said Badra.
“Egyptians represented the net buyers today because they were optimistic for a better economy…, while foreigners were the net sellers.”
