CAIRO, Nov. 30 (Aswat Masriya) – Egypt's stock market tumbled on Monday, ending a consecutive three-day climb, with the benchmark index EGX 30 falling by 1.87 percent.

Mohab Agina, the head of the technical analysis department at Beltone Financial said the market’s retreat today is “normal” after a three-session climb.

On the short and medium term, the Egyptian market is moving downwards, he said. The rise of the three previous sessions was merely “correctional,” to minimise losses.  

Agina said the announcement of national projects or the positive performance of companies listed on Egypt’s stock exchange are not enough to move the market in the opposite direction.

On Saturday, President Abdel Fattah al-Sisi announced what is dubbed a mega development project east of Port Said, the Suez Canal's Economic Zone. 

Agina said, however, that as long as there are no new cash inflows or investments and so long as currency issues persist, the market will continue to retreat.

Despite an unexpected appreciation of the Egyptian pound earlier this month, the currency has lost 8.26 percent of its value since the start of the year following multiple depreciations. Analysts expect further devaluations over the next few months.  

Today’s dip comes after heavy selling by Egyptian, Arabic and foreign financial institutions. Only Egyptian traders made net purchases today, while Arab and foreign traders made more sales than purchases.

EGX 30 ended trading at 6,356 points, dropping from 6,437 points at kick-off. This brings its decline from the start of the year to 28.79 percent, which means it fell by more than a quarter of its value over the past 11 months.  

Mohamed Elaasar, technical analyst at Watani Financial Services expects the market to continue to fall to 6,000 points throughout December, making a comeback next year.

Other main indices used to measure Egypt’s market performance, the index for small and medium enterprises EGX 70 and the broader EGX 100 also fell today, by 1.47 and 1.29 percent, respectively.

Agina said banks’ decision to raise the interest rates on savings certificates earlier this month continues to have an effect on the Egyptian market.

State and private banks have recently raised the saving scheme on certificates to 12.5 percent. This interest rate was around 2.5 or 3 percentage points higher than the available return on a saving scheme offered in Egyptian banks at the time.

Analysts have repeatedly linked the certificates to the stock market’s retreats, saying the high interest rates may discourage investors from putting money in the stock market, since the certificates offer traders a safer and guaranteed return.

(Reporting by Abd Elkader Ramadan; Writing by Hend Kortam)