Egypt’s stock market ended lower in the last week of 2018, amid a wider sell-off streak in global markets after the US’s Federal Reserve (Fed) raised interest rates by 0.25%, stimulating cash outflows from almost every stock market around the globe.
The market also resumed its downtrend amid the anticipation of the Central Bank of Egypt’s (CBE) decision regarding interest rates.
The Monetary Policy Committee (MPC) of the CBE decided in its Thursday meeting to maintain the current interest rates unchanged.
Overnight deposit rate, and overnight lending rate, remained unchanged at 16.75%, and 17.75%, respectively. The rate of the main operation, and the discount rate were also both kept at 17.25%.
The benchmark EGX30 index went down 153.3 points, or 1.16% to 12,984 points over the week.
The EGX70 index lost 0.6% to 673.8 points, while the EGX100 index levelled down 0.86% to 1,684.18 points.
During the week, the equally-weighted EGX50 index decreased by 0.6% to 2,132 points.
Market capitalisation lost EGP 4.1bn to register EGP 740.7bn at the end of the week, compared to EGP 744.9bn a week earlier.
The Egyptian Exchange’s (EGX) indices were affected by the sharp decline in the global market, followed the Fed’s decision to increase the interest rates, during the previous week, Branch Manager of Osool ESB Securities Brokerage Saeed El Feki commented.
“We could say 2018 is a year to forget for Egyp’t’s stock market, but initial public offerings (IPOs) were in full swing,” he added.
The EGX witnessed four IPOs in 2018 with a combined value of EGP 5.6bn, up 40% from the previous year.
Over the course of the year, the EGX hosted the offering of B Investments Holdings, CI Capital Holding, Cairo Investment and Real Estate Development (CIRA), and Sarwa Capital Holding for Financial Investments.
Plus, the beginning of the New Year’s vacations and the CBE’s decision regarding the interest rates have contracted the market, El Feki said.
In company earning news, Maridive and Oil Services reported a 24.4% year-over-year (y-o-y)rise in net consolidated profits for the first nine months of 2018 (9M18).
Net profits reached $18.28m in the period from January to September, versus $14.69m in the year-ago period, including minority shareholders’ rights, the company said in a filing to the EGX.
Revenues declined to $156.33m during the nine-month period ended September, versus $164.06m in the prior-year period.
At the level of standalone business, the company logged $1.04m in profits in the nine-month period of this year, down from $4.25m in the corresponding period of 2017.
Maridive previously posted a 55% y-o-y rise in net consolidated profits for the first half of 2018, recording $17.08mn from $11.02m.
Revenues grew to $112.7m during the six-month period ended June, versus $100.5m in the prior-year period.
Meanwhile, Qalaa Holdings posted EGP 126.4m in net profits during the third quarter (Q3) of 2018.
The company’s revenue soared 40% y-o-y to EGP 3.28bn in Q3 of 2018, according to a company statement.
Also, earnings before interest, tax, depreciation, and amortisation (EBITDA) surged 43% to EGP 305.6m, compared to the year-ago period.
In the first nine months of the year, Qalaa’s revenue grew 46% y-o-y to EGP 9.4bn, while the company’s net profits registered EGP 426.6m in the same period, the company revealed.
The result of Q3 of 2018 reflects the company’s strong operational performance and its steadfast progress, Qalaa Holdings’ Chairperson and Founder Ahmed Heikal commented.
The company is continuing its growth strategy through the expansion of its subsidiaries, Heikal added.
Meanwhile, B Investments Holdings announced its investments in the renewable energy field which are focused on solar power plants.
The Cairo-based private equity firm has invested around EGP 95m into three solar power plants through its subsidiary, Infinity Solar, according to a statement to the EGX. These plants are BSEP, PHOENIX, and MMID, B Investments highlighted.
The company’s investments are part of the second phase of the government feed-in tariff programme that stipulates selling electricity to the state-run electricity firm at 8.4 cents per kWh for 25 years as of the operation date, the company added.
B Investments said previously that Infinity Solar tied up the 30MW solar power plant ‘MMID’ to the national electricity grid.
The renewable energy developer started the trial and test operations and is set to be fully operated within 45 days.
Infinity Solar will also link the 500MW solar plant ‘Bseb’ to the national electricity network in 10 days prior to the end of December. The company will link the 50MW plant ‘Phoenix’ with the national grid as well.
B Investments previously posted a 52.8% y-o-y rise in consolidated profits for 9M18.
Meanwhile, Elsewedy Electric Co will sign a deal with Arab Contractors for the construction of a $3bn hydroelectric power plant in Tanzania in four years, Elsewedy’s marketing director said.
Arab Contractors will hold a 55% stake in the project, while Elsewedy will have the remaining 45%, Reuters reported, citing Ahmed Hassouna.
The plant, expected to be one of Africa’s biggest dams, will include nine turbines with a total production capacity of 2,100MW, Hassouna noted.
In other news, Egypt Gas has backtracked on the sale of a land plot located in Smouha, Alexandria in an auction held on 24 December.
The state-run firm ascribed the decision to the under-priced offers presented by the bidders, Egypt Gas said in a statement to EGX.
In September, the company said that it would hold a sealed-bid auction on Monday, 24 December to sell its land plot.
Egypt Gas last reported a 70% y-o-y drop in losses for 9M18. The company incurred EGP 17.6m in net losses for the nine-month period ended September, versus EGP 58.9m in the prior-year period.
Revenues increased to EGP 1.6bn at the end of September, compared to EGP 1.1bn in the corresponding period of 2017.
Noteworthy, the EGX announced on Thursday that Tuesday 1 January 2019 will be an official holiday as banks operating in Egypt will be on vacation on the occasion of the New Year’s Day. Trading will resume on Wednesday 2 January, the Egyptian bourse said in a statement.
On Tuesday, the CBE announced that Tuesday, 1 January, will be an official holiday for banks on the occasion of the New Year’s Day.