The Egyptian Exchange (EGX) continued to fluctuate sideways vertically and horizontally but the general performance of the market was negative. This is especially with the volume of trades in an increasing downfall last week.
As soon as prices recovered midweek, a receding wave hit most stocks by the end of the week with expectations of moving sideways this week.
All sectors of the EGX declined during last week’s sessions. The basic resources sector led the list of declining sectors by 14.6% due to the sharp decline of Ezz Steel after achieving huge losses in the first quarter (Q1) of 2019.
This is in light of the deteriorating market dynamics which became worse than expected due to the court’s decision in removing customs on iron ore and iron/steel thereby shrinking the profit margin ($303 against $329 in Q1 of 2019, along with the rise in electricity prices starting from July 1, 2019), and the appreciation of the Egyptian pound against the United States dollar.
Total sales of reinforcing steel fell by 2% quarter-over-quarter (q-o-q) and 10% annually, while average prices fell 4% q-o-q and 5% per annum during Q1 of 2019.
Mohamed Lotfy, managing director of Ostoul Securities Brokerage, said the market will bounce back at the beginning of this week’s trading and that the cross-section where the main index is currently heading would be a good opportunity for partial profit taking.
He ruled out that the stabilisation of the interest rate impacted the performance of the EGX, especially that the decision was expected, and is likely to begin the reduction in interest rates by the end of November.
Investors were advised to set up share buying centres that are currently experiencing heavy losses, such as Sidi Kerir and Ezz Steel, where they are not expected to continue to fall for a long time.
The EGX 30 index closed at 13,813.56 points, recording a decline of 1.31%. The EGX 70 index posted a 9.01% loss concluding the period at 543.49 points, while the S&P index declined by 1.51% and concluded the period at 2,140.77 points.
The EGX 30 index capped a decline by 1.63% and concluded at 16,969.32 points, while the EGX 100 index declined by 7.93% and concluded the period at 1,403.32 points.
Total market capitalisation reached EGP 738.2bn at the end of the period, representing a decrease of 1.59% during last week.
The total value traded recorded EGP 10.7bn, while the total volume traded reached 1,438m securities executed over 82,000 transactions last week. For the week before that, the total value traded recorded EGP 10.7bn, while the total volume traded reached 1,438m securities executed over 82,000 transactions.
Egyptians represented 71.7% of the value traded in listed stocks after excluding deals during the period. Foreigners accounted for 19.1%, while Arabs captured 9.3%. Foreigners were net sellers, with a net of EGP 10.7m, and Arabs were net sellers, with a net of EGP 256.8m, after excluding deals in listed stocks.
Since the beginning of the year, Egyptians represented 66.8% of the value traded in listed stocks after excluding deals, foreigners accounted for 24.1%, while Arabs captured 9.1%. Foreigners were net sellers by EGP 1,358.4m, and Arabs were net sellers by EGP 549.5m, after excluding deals in listed stocks during this year since its start.
