Egypt stocks end 3-month low as more banks raise interest rates

Egypt’s stock market continued its losing streak for the third day this week, incurring losses Tuesday worth 13.4 billion Egyptian pounds (US$1.6 billion). Benchmark index, EGX30, dived 4.40 percent on Tuesday’s session to record 6824.74 points, lowest since August 17th, after falling by 2.8 percent and 2.6 percent the previous sessions.

This comes after more banks joined the race to raise interest rates for savings certificates, increasing speculation on the monetary policy. On Sunday, Egypt’s largest two state-owned banks launched savings certificates for Egyptian pounds at an interest rate of 12.5 percent, above the average 10 percent currently offered by banks.

The move created speculation for a possible floatation of the pound and a possible interest rate hike by the central bank.

The market capitalisation has recorded 425.828 billion pounds during the closing session of Tuesday.

Other factors

The drop is caused by negative international and external factors, according to Global Head of Research at Mubasher Financial Services Amr Elalfy.

“Internally, you have the Russian plane, the impacted tourism, and the countries that have suspended flights to Sharm el-Sheikh,” said Elalfy.

The arrest of prominent Egyptian businessmen Salah Diab and his son Tawfik Diab on charges of possessing unlicensed weapons days after a corruption probe was launched against them also spooked investors, according to Chairman of Egyptian brokerage firm Acumen Securities Osama Mourad.

Meanwhile, Egypt’s annual inflation rate accelerated to 10.3 percent in October compared to 9.2 percent in September, official statistics agency CAPMAS announced on Tuesday. Urban annual inflation rate reached 9.7 percent and rural inflation rate hit 10.9 percent.

Indices

EGX50 EWI index pushed down 4.22 percent to 1152.7 points.

EGX20 sank 4.55 percent to 6563.94 points.

In addition, the mid- and small-cap index EGX70 edged down 3.84 percent to 363.52 points. The price index, EGX100 plummeted 3.40 percent 790.2 points.

Turnovers still humble

On Tuesday, the bourse’s trading volume has hit 227.849 million securities, with turnovers closed at 950.085 million pounds, exchanged through 25,187 thousand transactions.

Also during the closing session,178 listed securities have been traded in; 130 declined, 10 advanced; while 34 kept their previous levels.

Investors’ Activities

Local and non-Arab foreign investors were net sellers Tuesday seizing 85.78 percent and 8.55 percent, respectively of the total markets, with a net equity of 6.382 million pounds and 32.466 million pounds, respectively, excluding the deals.

On the contrary, Arab investors were net buyers capturing 5.67 percent of the total market, with a net equity of 38.848 million pounds, excluding the deals.