A new mutated form of the novel coronavirus (COVID-19) that appears more transmissible than the original has raised alarm across the world and imposed uncertainty in Egyptian Exchange (EGX) in particular.
The EGX witnessed collective declines during last week’s trading, driven by sales of Arab and foreign investors. The benchmark EGX30 fell by 1.5%, to close at 10,683 points.
Other indices like the EGX70 EWI for small and medium stocks fell by 0.52% to 2,055 points, and the EGX100 EWI also declined by 0.91% to reach 2,974 points.
The market capitalisation decreased by 1.1%, equivalent to approximately EGP 18.5bn, during the last week. This entailed that they recorded EGP 627.2bn, compared to EGP 645.7bn in the week before.
The EGX’s decline came against the backdrop of the UK’s announcement early last week that a new strain of the coronavirus had appeared. The announcement prompted a number of countries, including Italy, Germany, the Netherlands, and Saudi Arabia, to tighten measures to prevent the spread of the new strain into their territories.
The Egyptian market closed transactions on Thursday’s trading session with a slight rise in its indices, amid a buying trend by Egyptians and Arabs with a trading volume that did not exceed EGP 1bn.
Abu Bakr Imam, head of the research department at Sigma Securities Brokerage, said that there is a state of uncertainty in the local market that prevents easy predictions on upcoming moves.
Imam added that the EGX can quickly absorb the second wave of the virus in light of its previous experience, as well as find mechanisms to deal with it.
He pointed out that the announcement of the new coronavirus strain was clearly reflected in the dealings of individual investors, who tended to sell aggressively to close buying positions on margin.