Cairo bourse slid 1.6% as Iran re-entry drives oil prices down

Egypt’s stock market continued to drop Sunday in line with regional markets because global oil prices hit new lows after economic sanctions on Iran were officially lifted. The bourse incurred losses worth 4.2 billion Egyptian pounds (US$536.6 million) as market capitalisation has recorded 379.831 billion pounds during the closing session of Sunday.

Regional drop

Saudi stocks tumbled more than 5 percent, while Dubai’s index slid 4.6 percent to 2,685 points, its lowest level since September 2013, bringing this year’s losses to 15 percent, after benchmark oil prices fell to a 12-year low of $29 over the weekend in anticipation of the worsening of a global supply glut with increased production from Iran.

The oil-producing Iran has said that it plans to export an additional 500,000 extra barrels of crude oil a day in the short-term, after inspections on Saturday confirmed it had fulfilled the requirement of a nuclear agreement allowing for the lifting of international economic sanctions on the country for the first time in 40 years.

Cairo Indices

Egypt’s benchmark index, EGX30 inched down 1.66 percent to 5760.19 points.

EGX50 EWI index tumbled 1.72 percent to 1012.44 points.

EGX20 sagged 1.56 percent to 5685.56 points.

In addition, the mid- and small-cap index EGX70 declined 1.51 percent to 331.33 points. The price index, EGX100 edged lower 2.02 percent 680.56 points.

Turnovers remain weak

On Sunday, the bourse’s trading volume hit 256.329 million securities, with turnovers closed at 844.363 billion pounds, exchanged through 21,435 transactions.

Also during the closing session, 179 listed securities have been traded in; 101 declined, 35 advanced; while 38 kept their previous levels.

Investors’ Activities

Local investors were net sellers Sunday seizing 92.46 percent of the total market, with a net equity of 24.070 million pounds, excluding the deals.

On the contrary, Arab and non-Arab foreign investors were net buyers controlling 2.66 and 4.88 percent respectively of the total markets, with a net equity of 1.539 million pounds and 22.531 million pounds, respectively, excluding the deals.

Bourse Chief’s Move:

The Egyptian bourse issued a press release to calm investors Sunday amid the sell-off, according to which 60 percent of the listed companies have P/E ratios of under 10, and that 11 percent of the companies had PE ratios of between 10 and 15.

Chairman Mohamed Omran also said in the release that 37 percent of the listed companies who issued coupons offered yields exceeding 10 percent.

The bourse had issued another statement last Thursday after a week of losses calling on listed companies to disclose their 2015 financial statements “so as to reflect the real situation of those companies in a way to help the investor form a realistic vision about their performance away from the cases of unexplained panic sweeping markets at some times, which is not built on a sound economic basis.”