Reasons behind Decline of Egyptian Stock Exchange

Pharmaceutical industry company GlaxoSmithKline topped the biggest losers during Wednesday's trading on the Egyptian Stock Exchange (EGX), down 9.62% to close at EGP 23.78 per share.

Emerald Real Estate Investment (EMRI) came as the second biggest loser after its share price dropped 9.48% to close at EGP 3.63 per share.

El Ahram for Printing and Packing (EPPK) also dropped by 9.44% to record EGP 14.59, Alexandria Spinning & Weaving (SPINALEX) lost 9.17% to EGP 1.67, and Beltone Financial Holding declined by 9.04% to record EGP 1.94 per share.

International trading shares

The share of Commercial International Bank - Egypt - CIB (COMI) recorded a decline of 1.02% to close at EGP 53.46 with a turnover of 1.157 million shares at a value of EGP 61 million, through 546 transactions.

COMI recorded its lowest level in a year, which pushed the movement of stock market indices towards further declines considering it the largest relative weight in the stock exchange.

The bourse concluded the trading session with the main index "EGX30" declining by 1.85% to close at 10115 points.

The market-cap of the shares listed in the in-cabin trading recorded losses amounting to EGP 14 billion to close at EGP 630.466 billion amid a selling trend of Egyptian investors.

The total value of trading reached a turnover of 504 million shares, valued at EGP 4.4 billion on 34,000 transactions.

Out of the 201 shares traded today, 142 fell, 39 shares remained unchanged and only 11 shares rose.

Reasons for the decline

A number of financial market experts emphasized that the reasons for the stock market’s decline during the last sessions were due to the movement of the Commercial International Bank’s share, which has the largest relative weight in the index.

Experts added that the nature of Ramadan dealings and the shortening of trading hours were additional factors behind market declines.

Mohamed Saeed, managing director of ADT Consulting explained that the declines in CIB stock represented a great pressure factor on the market movement and incurred large losses during the last two sessions.

Saeed added that the coming sessions will be related to the movement of CIB shares, in addition to selling pressure on the movement of Egyptian investors and the shift of the investment policy for most dealers.