EGX dips in March ignoring Egypt’s economic summit
The Egyptian Exchange (EGX) - YOUM7 (Archive)

CAIRO: The Egyptian Exchange (EGX) lost ground in March and market capitalization shed around 4.95 billion EGP ($655.45 million,) according to the EGX monthly report.

Egypt’s market rode a downward wave in March, which became sharper over the past two weeks, shrugging off positive incentives from the Egypt Economic Development Conference held in Sharm al-Sheikh March 13-15, which resulted in anticipated investments of $60 billion, according to Prime Minister Ibrahim Mahlab.

During the course of the month, the benchmark index EGX30 dropped 2.13 percent to end the month at 9,134 points, down from 9,334 at February-end. Further, the small and mid-cap index plunged 7.2 percent, ending the month at 517.6 points, compared to 558 points a month earlier. The broader index EGX100 also dipped 6.2 percent to close the month at 1,045 points.

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 escalated tension in Yemen last week weighed on EGX indexes, as Egypt backed the Saudi-led Arab military airstrikes targeting Yemen’s Houthi militants.

Trade volumes and value witnessed a remarkable slip in March, totaling 24.2 billion EGP with 2.789 million securities traded on 444,000 transactions, down from 33.9 billion EGP and 2.723 million securities traded on 437,000 transactions in February, according to the report.

Saeed cited the extended slip to traders’ anger over the government’s insistence on imposing the capital gains tax approved in July on stock market profits and dividends, while the market is still anticipating the issue of its executive bylaw.

The benchmark failed to hold steady above its former support near 9,500 points and breached below the next support of 9,250 points, said the analyst, predicting that the EGX30 will focus on the next support level near 9,000  to 9,050 points.

“Sustaining above this level would push the index to re-test the resistance level of 9,250 points at least,” Saeed concluded.

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