Egypt’s blue-chip stock index has hit a near six-year low amid a sharp spike in prices as businesses struggle to secure necessary supplies of raw materials.
Image Credit: REUTERS/Mohamed Abd El Ghany
By Reuters, Team MEB
Egypt’s blue-chip index (.EGX30) hit a new near six-year low on Wednesday before recovering slightly in later trading, a day before the release of June inflation data.
The index is down 27.44% so far this year, having tumbled 3.6% to 8,642 on Monday, its lowest since November 2016.
In morning trading on Wednesday the index dipped 0.44% to 8,619 points, dragged down mostly by banking stocks. Later in the session it recovered to end up 0.15% at 8,670 points.
Analysts have blamed price rises, hikes to interest rates, and fears over the global economic outlook for the stock market losses.
Egypt has come under financial pressure because of a sharp slide in foreign portfolio investor holdings and rising costs for key commodity imports, especially since Russia’s invasion of Ukraine. Headline inflation accelerated to 13.5% in May.
“This is because of a lot of challenges varying from hard currency tightness and investment outflows in addition to the Fed’s rate hikes, so there has been continuous selling in the latest period,” said financial markets analyst and former Egyptian Exchange board member Ehab Said.
“The normal trend is down unless something new emerges,” he added.
On the EGX30 on Wednesday Credit Agricole Egypt and Cleopatra Hospital Company fell the most, dropping 4.55% and 4.09% respectively, followed by E-finance, which ended down 3.45%. Top gainers were GB Auto, El Sewedy Electric and EFG Hermes, up 9.96%, 6.44% and 3.99% respectively.