Stocks in Egypt slide as downgrade action scares investors
Egypt's stock market continued its plunge on Wednesday amid week-long economic volatility. Standard and Poor's downgraded Egypt's credit-rating to B-minus and cut the ratings of three major Egyptian banks including Banque Misr (BM), the Commercial International Bank (CIB) and the National Bank of Egypt (NBE); since then the stock market have been in constant decline.
Egypt's main benchmark index, the EGX30, fell by 0.34 percent. The broader EGX70 index, meanwhile, slightly rose by 0.16 percent. Out of 165 traded stocks, only 51 registered; 79 shares suffered losses. Trade volume reached a meagre LE311 million, reflecting the poor performance of the Egyptian stock market this week.
"This is almost half than yesterday's turnover rates; market fluctuations seem to have affected investors' confidence in the market," Issa Fathy, vice president of the securities division at Cairo's Chamber of Commerce, told Ahram Online.
Egyptian investors were net sellers for the day, offloading LE15 million worth of shares. Arab and foreign investors, meanwhile, were net buyers, picking up almost LE5 million and LE10 million, respectively, which is usually the trend in times of economic and political uncertainty.
"But the stock market can be expected to recover tomorrow and until the end of the year, as the market will be stimulated by a heavy buying and selling activity due to brokerage companies settling their financial situations at year's end."
Most sectors performed poorly today. The real estate sector tumbled with market giants Palm Hills Development and Talaat Mostafa Group Holding (TMGH) both declining by 0.85 per cent and 1.62 per cent respectively.
The banking sector also declined, and is expected to plunge further after three banks were downgraded, with Commercial International Bank (CIB) stumbling by 0.32 per cent and the National Societe Generale (NSGB) by 0.32 per cent.