The Egyptian Exchange’s (EGX) monthly report has revealed that foreigners are continuing to decrease their portfolios in the capital market, recording net sales of EGP 626.34m in August, whereas net purchases registered EGP 409.2m since the beginning of 2016.
The purchases of Arab investors have not been able to compensate for the intensive sales by foreign investors—net purchases by Arabs recorded EGP 166m in August.
Net purchases by Arabs have now registered EGP 1.163bn since the beginning of the year.
EGX chairperson Mohamed Omran commented on the exiting of investors, saying that the presence of two currency rates—in addition to the US dollar shortage in the market—has rendered the stock exchange less attractive amid regional competition.
The most important factor in the economic reform programme is the provision of hard currency, which will allow a free flow of investors’ finances, as well as an easy exit without any obstacles.
The process of converting shares into international deposit certificates traded in the London Stock Exchange is used as a way to transfer money abroad and sell it at the same prices as the informal market in Egypt.
According to the report, Egyptians acquired 79.6% of total market transactions in August, foreigners acquired 14.16%, and Arabs 6.25%.
Transactions by investment institutions increased—including insurance companies, banks, and investment funds—to 54.35% of the total transactions carried out by the EGX, compared to 45.65% for individual investors. A trend for sales has taken over institutions’ transactions, recording net sales of EGP 60m in August.
The transactions report for securities brokerage companies has revealed that during the first nine months of 2016, the Egyptian Group for Securities (EGS) surpassed other securities brokerage companies in the market by recording operations worth EGP 22.337bn, acquiring 10.2% of the market’s transactions.
The group was supported by carrying out deals worth EGP 7.543bn, acquiring 27.68% of the total value of deals in the capital market.
The Commercial International Brokerage Company (CIBC) came second, with a market share in the total brokerage trading of 9.1% by selling and purchasing orders worth EGP 19.790bn. Deals acquired EGP 3.431bn of total operations carried out by the company.
Hermes Brokerage Company came third with operations worth EGP 19.058bn, acquiring 8.7% of the market’s transactions. Deals do not represent a large share of the operations carried out by Hermes, as operations were worth only EGP 436.24m.
Pioneer Securities ranked fourth with operations worth EGP 11.447bn and a market share of 5.2%. Deals contributed to nearly EGP 1.68bn of the total operations carried out by Pioneers.
Pharos came fifth with a market share of 4.3% by carrying out orations worth EGP 9.086bn.