(AFP Photo)
By Sara Aggour and Doaa Farid
Egypt’s benchmark index EGX-30 rose for the second consecutive day, rising by 1.09%, reaching 5647.6 points at the end of the trading day on 23 September, which is its highest level since February.
Alaa Mostafa, a professor of finance, attributed this to the Central Bank of Egypt’s (CBE) decision on Thursday to lower interest rates. “The high volume of liquidity in the banks encouraged the investors to use it to trade in the stock,” he said.
“The liquidity must be invested in the bourse,” Mostafa said.
Mostafa also pointed out that the government’s actions to restore security have reassured investors: “There’s a positive progress in the security situation.”
The Monetary Policy Committee at CBE cut the overnight deposit rate, overnight lending rate and the rate of CBE’s main operation by 50 basis points on Thursday.
A member of the stock market’s board of directors said on Sunday that the latest agreement with Kuwait, in which Egypt will receive a deposit of $2bn, played a role in the stock’s gain on Sunday by 1.02%.
The governor of CBE, Hisham Ramiz, announced on Saturday that Kuwaiti aid will arrive on Tuesday.
On 13 August, stocks reached their highest level in seven months before dropping significantly on 14 August after the violent dispersal of two sit-ins supporting ousted President Mohamed Morsi.
The small and medium enterprises index, EGX-70, also surged 0.68%, reaching 483.71, a minimum of a 3.29 points increase from the preceding day. The broader EGX-100 index increased by 0.73% and registered 809.67 points at the end of the trading day.
The EXG20 Capped Index also jumped by 1.05%, reaching 6604.91, compared to 6601.84 on Sunday, 22 September.
The Egyptian stock market has been witnessing a notable rise since the second week of September. The increase since 19 September has been steady with no drops.
