CAIRO: Dozens of local retailers organized a protest outside the headquarters of the Egyptian Exchange (EGX) headquarters the Sunday morning, calling for the removal of its chairman Mohamed Omran, blaming him for a market plunge over the past two weeks that shrugged off the positive drivers from the economic summit held in Sharm al-Sheikh earlier this month.
The Egypt Economic Development Conference held March 13-15 resulted in anticipated investments of $72.5 billion, Prime Minister Ibrahim Mahlab announced.
Despite the “unpredicted success” of the economic conference, the EGX neglected all positive drivers, losing roughly 45 billion EGP in less than 10 sessions, Osool Securities Brokerage technical analysis head Ehab Saeed told The Cairo Post.
The benchmark slipped 4.9 percent during the course of the week to close at 9,052 points, compared to 9,518 a week earlier. Also, the small and mid-cap index EGX70 plunged 7.16 percent to hit 502 points, and the broader index EGX100 dropped 6.45 percent as well, recording 1,028 points.
Equities shed nearly 20.4 billion EGP ($2.67 billion) in five sessions, with market capitalization sinking to 499.9 billion EGP at the close of Thursday’s session, compared to 520.3 billion EGP a week earlier.
Abu Bakr el-Hawary, a lawyer investing a small-size portfolio in the EGX, filed a legal claim to the Attorney General, holding Omran “responsible for losing more than 75 percent of his portfolio.”
Other disappointed traders submitted their complaints via the hotline of the Cabinet, said Hawary. Omran did not respond to multiple requests for comment.
In the claim, Omran is accused of “failure and plotting along with managers of public investment funds against Egypt’s president… leading the market to slip four times since his [the President’s] election until being inaugurated.
“Intended transactions aimed at hurting the markets indexes to arouse concerns over the success of the economic conference were behind the market slip neglecting all these incentives,” read the claim.
The EGX head is appointed by Prime Minister upon the recommendation of the Investment Minister, but traders, brokers, experts and all related sides call for electing the EGX head as well as board members.
Omar el-Meghawry, Managing Director of First Equity Partners, rejected the protests and the blame cast on Omran, but said that more promotion for the market and investigation into the reasons behind the sharp slip is required.
“Promoting the EGX among retailers is still below targeted levels. Also attracting new companies for listing to revive the market and increase the thin liquidity is a must,” el-Meghawry told The Cairo Post in a phone interview.
Only 150,000 coded retailers from a total of 2 million are trading in the EGX, reflecting the sharp decline in trading volumes, he said, calling for more effort in promoting the market.