By Farah Atia
Egypt’s benchmark index closed with a rise of 1.43% on Sunday, despite mass protests seeking to topple President Mohamed Morsi on the first anniversary of his inauguration.
This rise followed the Central Bank of Egypt’s announcement on Thursday that Egypt’s money supply had increased by 18.8% as of May 2013, the highest growth rate in over five years.
The EGX 30 index, which bears a year-to-date loss of 13%, closed at 4,752.22 points. The index, which had suffered a steady decline since the beginning of the year, picked up again as the nation approached the 30 June protests.
“Egypt’s benchmark index gave a positive performance at the beginning of 2013 while the country was, and still is, caught in the grip of uncertainty and political deadlock,” stated a press release by Oxford Business Group (OBG).
Dr. Mohamed Omran, the head of the Egyptian Stock Exchange, whose tenure ends 30 June, urged stock market dealers this morning to strive for accuracy when making investment decisions and avoid basing trades on market rumours.
He also asked dealers to ensure that all stock market transactions were reviewed and audited to avoid omissions or fraudulent transactions that could lead to negative market performance and a possible collapse.
Sunday’s top market gainers were Torah Cement, Reacap Financial Investments, Arab Ceramics (Aracemco), Cairo Oils & Soap and Egypt Aluminium. Meanwhile, the market’s top losers were Misr Hotels, Egyptian Real Estate Group Bearer Shares, National Housing for Professional Syndicates, and Assiut Islamic Trading and Prime Holding.
OBG’s Regional Editor Robert Tashima said a challenging transition period in Egypt, marked by civil unrest, had heightened short- and medium-term risk. “That being said, the country’s long-term fundamentals are very encouraging, with favourable demographics, strong trade links, competitive input costs and a large domestic market,” he commented. “So for those investors willing to wait out the immediate uncertainty, the potential for greater returns is sizable.”
The Chairman and Managing Director of HC Securities, Hussein Choucri, said that although Egypt’s many structural challenges were serious, the steadily-rising stock market could be interpreted as a sign of investors’ continuing confidence in the country’s long-term prospects.