Cairo bourse plunges as Brexit shock rocked global markets

Egyptian stock market plunged on Sunday in response to Britain’s decision to leave the European Union, underperforming other major Middle East markets as investors worried that global instability could further cut capital inflows into Egypt.

Egypt’s main index EGX30 edged down 5.54 percent, to 6852 points, its worst drop in months.

During Ramadan, the trading sessions start at 10 a.m. Cairo Local Time (8:00 GMT) and end at 1:30 p.m. (11:30 GMT), reducing trading hours by one hour.

Other indices; Mid- and small-cap index EGX70 sank 2.67 percent, to 338 points.

Naeem brokerage said in a note that the economic impact on Egypt of Brexit would not be very serious, because weakness in the British pound and euro could actually benefit the current account balance of the import-driven Egyptian economy, and 16 percent of the country’s external debt was denominated in euros.

But initially at least, investors focused on the risk that the global market turmoil would make it even harder for Egypt to attract fund inflows. That would worsen the hard currency shortage which is plaguing local industry and possibly making more depreciation of the Egyptian pound inevitable.

Market Caps

Market capitalisation incurred heavy losses worth 16.3 billion Egyptian pounds ($1.8 billion), to record 376.368 billion pounds during the closing session of Sunday.

Turnovers humble

The bourse’s trading volume reached 94.495 million securities, with turnovers, closing at 383.667 million pounds, exchanged through 13 thousand transactions.

Also during the closing session, 168 listed securities have been traded in, 123 declined, 11 advanced; while 28 kept their previous levels.

Investors’ Activities

Local and Arab investors were net sellers; while non-Arab foreign investors were net buyers.