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EGX’s benchmark index plummets 4.18%, sheds EGP 7.3bn - Daily News Egypt

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EGX’s benchmark index plummets 4.18%, sheds EGP 7.3bn

Domestic and foreign instability drives the market down

Benchmark index at the Egyptian Stock Exchange (EGX) EGX-30 dropped 4.18% and shed some EGP 7.3bn on Sunday, decreasing to 6522.12 points, the lowest in almost two years.

Broader index EGX-100 decreased by 4.36%, while the small and medium enterprises index EGX-70 dropped by 4.36%. The trading day closed with 131 decliners, 6 gainers, and 31 unchanged.

Egyptian individuals and institutions were more inclined to sell while foreign and Arab institutions were buying.

Former EGX vice president Mohamed Farid told Daily News Egypt that a combination of the “domestic situation and economic uncertainty accompanied with the global terrorist attacks” have contributed to the current drop in the stock market.

On whether the savings certificates offered by the National Bank of Egypt (NBE) and Banque Misr affected the stock market, Farid said there is an inverse relationship between interest rate and the stock market performance.

“Whenever the interest rate goes up, the stock market will almost immediately decline,” he said, noting that such behaviour is natural.

During the past week, the capital market declined significantly and the expectations as to when the market would pick up are still low.

“We are in a volatile period,” Farid said. “At some point investors will stop and think [about buying].”

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