EGX starts 2022 in red

CAIRO - 8 February 2022: The indices of the Egyptian Stock Exchange recorded collective regression during January, driven by selling pressures of foreign investors.

The benchmark EGX30 declined 3.84% or 458.73 points to close January at 11,490.45 points, compared to 11,949.18 points in December. 

The equally weighted index EGX 50 dipped 4.76%, or 99.87 points, to end the month at 1,997.95 points, down from 2,097.82 points in the prior month.

The small and mid-cap index EGX70 decreased 3.77% or 82.94 points, to close at 2,118.85 points, compared to 2,201.79 points at the last session of December. 

On the same vein, the broader index EGX100 inched down 4.04%, or 131.45 point; to record 3,123.76 points, from 3,255.21 points by the end of the previous month. 

Capital markets expert Ayman El-Zayat said that the lackluster performance of the Egyptian market during January came in light of the lack of confidence among investors amid the imposition of the capital gains tax since the beginning of the year.

The tax is levied on the basis of the net capital gains value of the portfolio of securities realized at the end of the tax year.

It is being applied to investors residing in Egypt, at a rate of 10% on the net profits of their stock portfolio, after deducting brokerage fees.

The government had approved the application of the capital gains tax on the stock exchange at a rate of 10% in July of 2014, but the tax led to turmoil in the money market and a crisis in the way it was calculated, which forced the government to postpone it for two years in May 2015.

He pointed out  in a statement to a local media outlet that the continuous selling by foreigners and Arabs, even if it was matched by a purchase by the Egyptian institutions, might push the EGX30 Index to further decline or the continuation of the accidental performance.

Head of Business Development and Strategies at Pioneers Securities Trading Company, Mohamed Gaballah, explained that the performance of the Egyptian Stock Exchange during January was an unexpected lackluster, especially with the unjustified lack of liquidity levels, except by individuals and institutions.

Gaballah pointed out that the EGX30 index, despite its decline during that period, ended the month's trading, at its highest level of 11,400 points, i.e. on an upward trend.

It is believed that the rebound witnessed at the end of the month may extend until mid-February, according to Gaballah, indicating that the signs of recovery will not be confirmed until after exceeding the level of 11,800 points and stabilizing above it.

As per market capitalization, EGX recorded LE 741.9 billion, compared to LE 765.6 billion in December , which marks a decrease of 3.1%.

The total value traded in January recorded LE 107.3 billion, compared to LE 84.7 billion in December. 

While the total volume traded reached 6,279 million securities, up from 11,203 million securities in September, executed over 677 thousand transactions, and 947 thousand transactions, respectively.

Stocks trading accounted for 15.81% of the total value traded of the main market, while the remaining 84.19% were captured by bonds over the month.

Egyptians represented 75.1% of the value traded in listed stocks after excluding deals during the period. Foreigners accounted for 15.6%, while Arabs captured 9.3%. 

Foreigners were net sellers, with a net of LE 611.9 million, and Arabs were net buyers, with a net of LE 49.9 million, after excluding deals in listed stocks.

Since the beginning of the year Egyptians represented 75.1% of the value traded in listed stocks after excluding deals, Foreigners accounted for 15.6%, while Arabs captured 9.3%.

Foreigners were net sellers by LE 611.9 million, and Arabs were net buyers by LE 49.9 million, after excluding deals in listed stocks during this year. 

Capital increases of the EGX companies recorded LE 1.7 million during January

Capital increases of all kinds for companies listed on the Egyptian Stock Exchange recorded about LE 1.7 billion during last January's trading.

According to a report issued by the Egyptian Stock Exchange (EGX) , this value has clearly decreased compared to its volume during the previous December, which amounted to about LE 3.9 billion.

The cash capital increases came in favor of 5 companies, including the Egyptian Gulf Marseilia Real Estate Investment Company with a value of LE 28.8 million, Faisal Islamic Bank of Egypt, denominated in LE, amounted to LE 573.3 million, and Faisal Islamic Bank of Egypt, denominated in dollars, amounted to LE 65.3 million.

The capital increases of Mina Real Estate and Tourism Investment Company recorded LE 91.9 million, and the International Company for Medical Industries - ICMI came with a value of LE 33.4 million.