Egypt’s Main Gauge Hits 6-month High on Rate Cut – Closing

Egypt’s stock market has ended its first day of trading for this week higher posting gains of EGP 5.7 billion backed by the Central Bank’s first interest rates cut in four years. The CBE’s interest rates cut is expected to help boost Egypt’s economic growth.

The main gauge closed above 5530 pt, headed for the highest close in more than 5 months.

The Egyptian Exchange’s indices were wavering in green notes during the closing session of Sunday.

Egypt’s benchmark index EGX30 soared by 2.88% to close at 5530.46 p; while the EGX20 jumped by 2.75% to end at 6414.8 p.

Meanwhile, the mid- and small-cap index, the EGX70 pushed up by 1.34% to conclude 434.86 p.  The price index EGX100 surged by 1.46% to finish 743.52 p.

The capital market has closed at EGP 364.077 billion on Sunday.

Higher Traded Volumes & Trades

Through the closing session of Sunday, the trading volume has reached 128.474 million securities. For the traded value, it hit EGP 393.976 million, exchanged through 16.871 thousand transactions.

Also during the closing session, 162 listed securities have been traded in; 14 declined, 125 advanced; while 23 keeping their previous levels.

Investors’ Activity

Egyptians’ buying transactions backed EGX’s closing gains as they were net buyers seizing 77.84% of the total market, with a net equity of EGP 21.823 million, excluding the deals.

Meanwhile, the non-Arab foreigners and Arabs were net sellers seizing 12.09% and 10.07% respectively, of the total market, with net equities of EGP 5.554 million and EGP 16.269 million, excluding the deals.

Rates Cut

The central bank cut the benchmark deposit and lending rates to address “downside risks” to the economic growth outlook and reduced the rates by 50 basis points to 9.25% and 10.25%, respectively. The cut will probably boost banks and other financials, Cairo-based EFG-Hermes Holding SAE said in an e-mailed report today. The Egyptian economy is facing its worst economic slump in two decades, with the median of 17 economists estimating growth this year of 2.1%.

“The interest rate cut shows movement on the central bank’s part to stimulate the economy and it’s being well-received by investors,” Teymour El-Derini, director of Middle East and North Africa sales trading at Cairo-based Naeem Brokerage, said by phone. “The political tension remains but it’s going to take something drastic to bring this market down as sentiment is high.”

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