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EGX jumps 5.85 per cent in the first week of 2013 - Daily News Egypt

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EGX jumps 5.85 per cent in the first week of 2013

Sharp speculation regarding the dollar has had a negative effect on Egypt’s economy

The Egyptian stock market improved considerably during the first week of 2013, reflecting a new found sense of optimism on the part of investors regarding the nation’s political scene, and the recent stabilisation of the Egyptian street. A number of investors and financial institutions, both Arab and foreign, have been buying up large amounts of Egyptian stock in an attempt to diversify their portfolios.

Egypt’s capital market increased by EGP 15.251bn, from EGP 373.1 bn to EGP 389 bn, a 4 per cent increase over the last week

Egypt’s weekly stock exchange report recorded EGP 2.3bn in turnovers and 656 million permeable sheets as a result of 105,000 transactions, compared to EGP 3.9 bn in turnovers and 675 million in permeable sheets as a result of 116,000 transactions witnessed the previous week.

The EGX 30 index rose to 5734 points, a 5.85 per cent recorded increase, whereas the EGX 70 index for small and mid-sized enterprises rose 3.94 per cent, closing at 498 points.

The EGX 100 rose 4.28 per cent, stabilising at the end of the week at 835 points. EGX 20 rose by 6.61 per cent to reach 6650 points.

Experts in the stock market pointed out that shares had been purchased on the primary and secondary indices for a number of large companies such as Orascom Telecom, Orascom Construction and Citadel Capital, in addition to a large number of shares in Egypt’s banking and real estate sectors, all of which coalesced to achieve the highest stock market gains in months.

Samir Rauf, a financial markets expert, attributed the increase in Egyptian stock market purchases to expectations that the market would improve in light of the recent stabilisation of Egyptian politics over the last several weeks.

The Fitch international credit rating agency recently praised steps taken by Egypt’s Central Bank with regards to its currency, strengthening investor confidence that the economy was going down the right path.

Sharp speculation regarding the dollar has had a negative effect on Egypt’s economy, however this could possibly dissipate by the end of the week, considering the sharp decline in the price of the dollar compared to Egypt’s pound in parallel markets (the exchange and black markets).

The Egyptian stock market has seen a number of positive indicators over the last several days, the result of a series of acquisition deals and mergers of a number large companies, that may pave the way for the recovery of Egypt’s stock exchange over the coming weeks.

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