Egypt Shares Post Monthly Gain of EGP22.9 bln on Interest Cut

In September, the Egyptian bourse has reported gains EGP 22.9 billion. The capital market hiked by 6.4%, closing at EGP 377.733 billion by the end of September sessions, compared to EGP 354.745 billion by the end of last August sessions.

The Egyptian Exchange’s indices reported remarkable performance during September.

Through September – the main index, EGX30 jumped by 6.7% to end at the level of 5621 points. For the mid- and small-cap index, the EGX70 soared by 10.11% to close at 486 points; while, the price index EGX100 surged by 8.62% to conclude at the level of 811 points.

EGX’s upward trend was bolstered by the Egyptian central bank’s decision to cut deposit and lending interest rates for the second successive time.

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.

Turnovers & Market Summary

In September, EGX’s traded volume reached around 3.024 million securities worth around EGP 14.8 billion, exchanged through 520 thousand transactions. Noting that, through last August the traded volume had reached 1.761 million securities worth around EGP 14.4 billion, exchanged through 311 thousand transactions.

Elsewhere, the traded volume for the EGX of SMEs – NILEX through September has amounted to 26.6 million securities worth EGP 53.9 million, exchanged through 7751 transactions.

For EGX’s Over-The-Counter – OTC trading, the shares had seized 68.78% out of the total traded value; while traded value of the bonds represented 31.22% in June.

Investors Activities:

Local investors led the market activity through September, seizing 86.08% of the total market; while non-Arab foreigners and Arabs seized 10.11% and 3.81%, respectively of the total market, after excluding the deals.

Excluding the deals, the non-Arab foreigners were net sellers in September, with a net equity of  EGP 86.49 million; while Arabs were net buyers, with a net equity of EGP 49.95 million, after excluding the deals.

It is worth noting that the non-Arab foreigners were net sellers since the beginning of 2013, with a net equity of EGP 1.603.15 billion; while Arabs were net sellers, with a net equity of EGP 271.58 million, after excluding the deals.

Also in September, institutions had seized 50.82% of the EGX’s transactions; while individuals had 49.18%.

Institutions were net sellers, with a net equity of EGP 51.16 million through April, after excluding the deals.