The Egyptian Stock Exchange (EGX) fell at the end of trading on Wednesday after the main index exceeded the level of 32,000 points, before all indices gave up their gains under pressure from Egyptian sales.
The market jump in morning trading came in the wake of the Central Bank of Egypt's decision to raise the interest rate by 600 basis points and leave the determination of the local currency exchange rate to supply and demand mechanisms.
However, the market lost the gains it had achieved after local banks announced savings certificates with very high returns, which prompted investors to choose between stocks and those certificates and move towards selling.
The main index (EGX 30) fell 3.02% to 29,743 points, and the index (EGX 70) of small and medium-sized companies fell 3.40% to 7,202.06 points, while the broader index (EGX 100) also fell at the range of 3.39% to 10177.68 points.
Egyptian investors tended to sell at a net amount of about EGP 291 million, while Arab and foreign investors tended to buy at a net amount of about EGP 186.48 million and EGP 104.49 million, respectively.
Shares Prices
Shares of Talaat Mostafa Holding Group fell 10.6% to EGP 71.51, Heliopolis Housing and Development fell 7.87% to EGP 12.29, Palm Hills fell 11.52% to EGP 4.3, and Misr City Housing and Development fell 9.9% to EGP 4.37.
The share prices of e-Finance Financial and Digital Investments fell by 12.5% to EGP 21, Ezz Steel by 4.36% to EGP 74.5, and Orascom Development Egypt by 5.4% to EGP 13.85.
Shares of EFG Holding Group also fell by 2.66% to EGP 20.15, El Sewedy Electric by 7.66% to EGP 41, CIB Egypt by 0.26% to EGP 75.8, and Beltone Financial Holding by 2.33% to EGP 3.53.
On the other hand, shares of GB Corporation rose 0.71% to EGP 11.4, and shares of Misr Fertilizer Production (MOPCO) rose 1.13% to EGP 62.4.
Mohamed Reda, CEO of Solid Capital Africa and the Gulf, told the Arab World News Agency (AWP) that “everyone was waiting for the decision to liberalize the exchange rate as part of the exceptional decisions of the Central Bank to unify the exchange rate, after a long marathon of speculation on the price of the dollar and stocks.”
Reda pointed out that the new certificates with a high return of 30%, offered by the National Bank of Egypt and Egypt, prompted investors within the stock exchange to liquidate shares to make comparisons between the market and the new savings certificates.
He explained that the process of withdrawing liquidity from the market after unifying the currency price will certainly affect the stock market, but increasing dollar flows from Egyptians working abroad, entering direct investments, and making acquisitions will strengthen the stock market.
Reda added that during the International Monetary Fund's reviews, there was talk of European monetary reinforcements and other funds to fill the financing gap facing Egypt, and the country also received a batch of funds from the Ras al-Hikma investment deal, which gave the Central Bank dollar liquidity and the ability to make the decision to float the pound.
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