Egypt Shares Gain EGP9.4 bln in Week on Interest Rate Cut

In a week, Egypt bourse has managed to gain EGP 9.4 billion backed by the Egyptian central bank’s decision to cut deposit and lending interest rates for the second successive time.

The capital market reached EGP 381.098 billion on Thursday, compared to EGP 371.647 billion a week earlier.

Accordingly, the Egyptian Exchange’s benchmark index EGX 30 index surged by 3% this week, representing an increase of 174.02 points, ending Thursday’s transactions at 5704 points compared to 5529.98 points at the end of a week earlier.

The main gauge index hit its highest point on Thursday closing at 5704 points, where its lowest point recorded on Sunday at 5586.65 points.

Meanwhile, the mid- and small-cap index, the EGX70 climbed by 2.5% closing at 488  points during Thursday’s session, compared to 476 points at the end of a week earlier. The price index, EGX100 also inched up by 2.5% concluding by 816 points during Thursday’s session, against 796 points at the end of a week earlier.

Also in a week, the EGX has recorded a volume of trades hit  715 million securities, compared to 680 million securities a week earlier; while the traded value reached EGP 2.7 billion, opposed to EGP 4.672 billion a week earlier.

Interest Rates Cut

On September 19th,  Monetary Policy Committee at the Central bank of Egypt (CBE) decided to cut the overnight deposit rate, overnight lending rate and the rate of CBE’s main operation by 50 basis points to 8.75%, 9.75%, and 9.25%, respectively. The discount rate was also cut by 50 basis points to 9.25%.

The Central Bank of Egypt’s (CBE) decision to cut interest rates for the second time in a row is seen to have a positive impact on the country’s slowing economy, and aims to boost investors’ lending, according to analysts.

Companies’ Weekly Performance Highlights

Global Telecom Holding (formerly known as Orascom Telecom Holding – (GTHE.CA) closed last week at EGP 4.36, while closed on Thursday at EGP 4.49, jumping by EGP 0.13 (3%).

On Sunday, Global Telecom denied media reports about ending Djezzy’s, its unit in Algeria, in the second half of 2014.

The company added, in a release sent to EGX that, it wasn’t informed by material developments considering this issue.

On Monday, Orascom Telecom Holding announced that it has changed its name to “Global Telecom Holding S.A.E.”.

The Egyptian Stock Exchange (“EGX”) and the London Stock Exchange (“LSE”) amended the new name of the company, “Global Telecom Holding S.A.E.”, and amend the ticker symbol on the trading screens to “GTHE.CA” on the EGX and “GLTD:LI” on the LSE with effect from September 23, 2013.

Also on Monday, Global Telecom confirmed that its Algerian unit Djezzy submitted an offer for 3G license in Algeria.

On the other hand, OT asserted that company’s financial officer didn’t gave statements about expected date for ending Djezzy’s dispute.

Also on Monday, Global Telecom announced that it will disclose its Consolidated and Standalone Financial Results (unaudited) for the fiscal period ended 30th September 2013 before the opening sessions of LSE and EGX on Wednesday, 6th November 2013.

Investors’ Activity

Local investors led the market activity all through the week, followed by Foreign and Arab investors respectively.

Local investors were the most active buyers this week earning the value of EGP 29,766,032.

Arab investors chose also to sell by value of EGP 13,081,647.

Foreign investors were most active sellers this week by the value of EGP 42,847,678.

Retail & Institutions’ Activity

Retail activity led the market all through the week as it ranged between 50.86 – 87.11 %.

While Institutions activity ranged during this week between 12.88 – 49.13 %.