Egyptian stock market drops to lowest point in 19 months

Wednesday 19-08-2015 04:42 PM
Egyptian stock market drops to lowest point in 19 months

By Abdel Kader Ramadan

CAIRO, Aug 19 (Aswat Masriya) - The Egyptian stock exchange dropped on Wednesday amid heavy selling by foreign investors, continuing a streak of retreats this week as internal and external factors weigh down on the Egyptian market. 

Egypt's benchmark index EGX 30 dropped by 2.13 percent, ending at 7,240 points, the lowest point it has reached in 19 months.

Ayman Hamed, the Managing Director and Chief Executive Officer of Naeem Brokerage Egypt said the ""Egyptian economy is in a critical situation."

He believes the government must work hard to resolve issues facing investors to attract Arab and foreign investors. This would provide inflows of hard currencies and ease pressures on the Egyptian pound. 

Egypt's medium and small enterprises index EGX 70 fell by 1.26 percent, while the broader EGX 100 retreated by 1.65 percent.  

Since the start of trading this week on Sunday, the Egyptian exchange has retreated every day, making Wednesday's the fourth retreat in a row.

The Egyptian market's struggle comes in tandem with retreats in European and Arabic markets, driven by the tumbling Chinese market, which is all contributing to fears that an economic slowdown is imminent. 

Hamed believes the internal factors driving the Egyptian market down coincided with global economic issues. 

He cited the confiscation of the assets of Juhayna's chairman Safwan Thabet last week, as one of the main reasons for the market dip in the past few days. Analysts have previously told Aswat Masriya that the market's plunge on Sunday was caused by the confiscation of Thabet's assest on Thursday.  

Hamed also believes that referring carpet manufacturing giant Oriental Weavers to prosecution for "monopolistic practice" has also contributed to the retreat in the Egyptian market. 

On Tuesday, Egypt's Competition Authority announced that it referred Oriental Weavers to prosecutors, in a unanimous decision by its board of directors.

Hamed called on the Egyptian government to deal with companies listed in the stock exchange with "wisdom", adding that dealing with these companies "the wrong way" can lead to a wave of buying and selling and spread "panic" among traders.

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