CAIRO: The Egyptian Stock Exchange (EGX) indexes closed Tuesday on a collective decline, losing 4.8 billion EGP ($671 million) in capital due to Egyptian investors’ intensive sales, while Arab and foreign investors mostly purchased.
The benchmark EGX30 index dropped by 1.66 percent, totaling 8,167 points, the small- and mid-cap EGX70 dropped by 1.86 percent hitting 583 points and the broader EGX100 fell by 1.09 percent to total 1,025 points.
Egyptian and foreign investor sales caused the market to lose 4.8 billion EGP, dropping to 476.5 billion EGP compared with 481.3 billion EGP a day earlier.
During Tuesday transactions, Egyptian investors’ net sales went up to 737 million EGP while Arab and foreign investor net purchases registered 724 million EGP and 13 million EGP respectively.
Orascom Telecom and Talaat Moustafa Group topped the losers, with 2.4 percent and 2.2 percent declines respectively.
Ahmed Thabet, head of the technical analysis department at Mirage Brokerage Company, told Mubasher that the intense sales along with President Abdel Fatah al-Sisi hinting austerity measures were the major factors of the collective decline.
During a graduation ceremony at the Military Academy, Sisi announced that he refused to ratify the 2014-15 draft budget because it featured a 300 billion EGP deficit, about 12-14 percent of GDP, Al-Borsa business daily reported Tuesday.
Tuesday’s collective decline is the largest decline since the beginning of the month, he said, pointing out that Sisi’s refusal to endorse the draft budget due to the rise in the deficit has caused fear among investors.
But for Wednesday’s trading session, Thabet predicted the EGX will continue to decline, especially with the absence of market motivators. He said the benchmark EGX30 will roam between 8,120 and 7,950 points.