EGX30 jumps 46% in 2014, hits 6-year high: analyst
Egyptian Exchange - AFP/Marco Longari

CAIRO: The Egyptian Exchange (EGX) witnessed a great performance over 2014, as the benchmark index EGX30 surged to a 6-year price high, according to Osool Securities Brokerage technical analysis head Ehab Saeed.

During 2014, the market noted significant hikes on all indexes, with some corrections that coincided with important events. In 2013, the EGX noted a mixed performance, namely right before and after the June 30 protests which led to the removal of former Islamist President Mohamed Morsi.

“The benchmark index surged to a 6-year price high to hit 9,835 points, the highest level since 2008 and around 46 percent compared to its level at 6,774 points by the end of 2013,” Saeed said in a statement to The Cairo Post.

However, the main index has recently witnessed a sharp decline due to the plunge of Gulf markets over a dip in oil prices following an OPEC decision not to cut oil output, said the analyst. He added that the index slipped to 8,100 points and then rebounded to 8,700 points, the level that was targeted for the year’s end.

“The real estate sector was the best performer during 2014; led by Heliopolis, Medinet Nasr, Sodic and Talaat Moustafa it reached record levels,” according to Saeed.

Heliopolis soared 190 percent from 24.3 EGP to 71 EGP ($10). Meanwhile, the stock faced a downward correction that dragged it towards 50 EGP. Also, Medinet Nasr and Sodic surged 150 percent and 110 percent respectively, the analyst said.

The banking sector was also a key leader during the course of the year, led by market bellwether CIB stock that had a 60 percent increase, said Saeed. “This backed the benchmark in light of the negative performance of other blue chips, notably Global Telecom and Telecom Egypt. These two stocks were the worst stocks during 2014, registering 32 percent and 26 percent plunges respectively,” he said.

Despite the positive performance of OTMT, the telecom sector was the worst performer during the year, Saeed reiterated.

“The presidential election and the Constitution referendum were the top events during 2014,” he said.

However, the amended Constitution had a dramatic impact on the investment environment in general and the stock market in particular by imposing a capital gains tax on stock market profits and dividends, according to Saeed.

He further noted that launching the Suez Canal Expansion project—aimed at digging a new 72-kilometer canal parallel to the current one to speed up transit time—was the most important project announced in 2014.

President Abdel Fatah al-Sisi launched the multi-billion dollar megaproject in an attempt to revive Egypt’s limping economy, as it is expected to boost annual revenue up to $13.5 billion by 2023.

Raising around 64 billion EGP in eight days by selling investment certificates to the public with the aim of financing the mega project through domestic finance changed the West’s outlook on the Egyptian market, and turned it into “a real promising market,” according to Saeed.

Cutting oil subsidies to chip away at the budget deficit was also one of the most important events during 2014, according to the analyst. “The current government led by [Prime Minister] Ibrahim Mahlab took advantage of Sisi’s sweeping popularity to apply the decision without arousing popular anger,” Saeed continued.

Saeed also highlighted that trading volumes and values have noted a “remarkable improvement” during the course of the year, with total trading on stocks registering a 140 percent raise to hit 15 billion EGP, up from 6.3 billion EGP in 2013.

The daily average reached 760 million EGP, compared to 320 million EGP in the previous year.

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