14 January 2016

Egypt's Stock Market Hit Its Lowest Point in Two Years

Cairo — Egypt's stock market exchange's benchmark index EGX 30 significantly retreated by 5.6 per cent, reaching 5,857 points on Thursday.

The main indicator has hit its lowest point since Oct 2013.

The broader EGX 100 declined by more than 5 per cent, prompting the closure of the session and suspension of trading four minutes ahead of schedule.

The index for small and medium enterprises EGX 70 also dropped by 6.1 per cent.

Egyptian and foreign traders recorded net sales valuing EGP 38.8 million and EGP 6 million respectively. While Arab traders made purchases amounting to EGP 32.6 million.

The Egyptian stock exchange suffered a huge loss of 10.4 per cent throughout the week.

Ahmed Zakaria, the director of customer accounts at Okaz Securities Brokerage, attributed the drop in market indicators to the drop in oil prices globally, which had in turn led to a retreat in the US, European and Gulf markets.

The Bent Crude (ICE) index, the global benchmark, dropped on Thursday to its lowest levels since 2004 to reach $29.7 per barrel, marking 1.5 per cent decline. Reuters reported that the drop was due to an additional supply of Iranian oil.

European shares also declined Thursday, with the British indicator FTSE 100 dropping by 1.9 per cent, the German indicator DAX by 3 per cent and the French indicator CAC by 3.1 per cent. The pan-European FTSEurofirst 300 also witnessed a drop of 1.4 per cent, the lowest since last August, according to Reuters.

The Gulf markets ended trading Thursday with large losses as well, as the Saudi market concluded its session with decline of 4.2 per cent, the Emirati market closed at 3.6 per cent, the Qatari at 2.3 per cent and the Kuwaiti market at 1.6 per cent.

Zakaria expected the Egyptian stock market to remain affected by global factors, amid fears of a looming global financial crisis. Zakaria also pointed that most estimates speak of a significant decline in global economic growth.

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