The Egyptian Stock Exchange (EGX) has witnessed a notable decline on its first trade day this week, with the benchmark index declining by 5.42%, and the market shedding EGP 15.4bn. This is the most notable decline in almost three years.
The small- and medium-sized enterprises index, the EGX-70, also dropped by 6% while the broader index, the EGX-100, declined by 4.31%.
In the middle of the trading day, the EGX suspended trade on 55 stocks after they dropped by more than 5%.
Egyptians and Arabs were more inclined to sell, while foreigners sought to buy stocks. Individuals also preferred selling, compared to institutions that opted to buy. The capital market has been influenced by a global decline in stock markets.
Despite the poor performance of the Egyptian capital market since the beginning of 2015, this year has seen the largest number of initial public offerings (IPOs) and propositions from major companies since 20
07, prior to the outbreak of the global finance crisis.
Earlier this month, EGX Chairman Mohammed Omran said consultations with several government agencies, including the Suez Canal Authority, are taking place to discuss ways of utilising the stock market as a reliable source of funding. The stock market is to be used within several channels of funding packages for the development of the Suez Canal Project.