Egypt’s tycoon Sawiris may have caused a drop in EGX- Analysis

The Egyptian Exchange (EGX) lost more than 460 points, equivalent to 2.54 percent in the last two sessions, which might be a result of the recent remarks by Egypt’s billionaire Naguib Sawiris.

Sawiris, the second richest man in Egypt, revealed last week that he has invested half of his $5.7 billion net worth into gold in anticipation of an overvalued stock market crash.

The chairman of Orascom Telecom Media and Technology (OTMT) is expecting the fall of stock markets globally to drive the price of gold up from around $1,300 per ounce to near $1,800.

A survey by Mubasher of the opinions seven leading market analysts and experts regarding the effects of Sawiris remarks on the Egyptian stock exchange saw the majority of them believing it had negative effects of traders and investors sentiment.

However, the effect is thought to be temporary and expected to vanish in coming days, especially in a time in which the main index (EGX30) is rising to new all-time highs.

Mohamed Sharawy of Pioneers Holding noted that the remarks by Sawiris may have affected the Egyptian market, noting that it is contradicting as the businessman did not invest in gold trade as many would assume, but rather in a gold mining company.

Sharawy believes that news regarding the awaited government initial public offerings (IPOs) will help drive the market up.

Hesham Hassan of Acumen agreed with this view but noted that it is normal that the market witnesses a correction movement after its historic gains.

The head of Research in El Marwa for Securities and Brokerage, Mohamed El-Naggar added that Sawiris has justified the stagnation of his stocks by the overvaluation of the stock markets, expecting the main index to return next week to targeting the 19,000-point level.