Egyptian stock exchange maintains stability during crisis

A trader checks his computer at the Egyptian stock exchange. [Khaled Desouki/AFP]

A trader checks his computer at the Egyptian stock exchange. [Khaled Desouki/AFP]

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The Egyptian stock exchange maintained its stability last week, with results analysts said reflect investor confidence in the exchange.

They predicted that the political talks held at Al-Azhar, among other events, will lead to gains in next week's trading.

"EGX 30, the main index, dropped only 1.4% at the end of trading last week, and that is a very normal percentage drop that any market could experience under normal conditions," said Mustafa Fakher, chairman of the board of directors at the Giza Financial Brokerage Company.

Trading ended Thursday (January 31st), with a gain of around 2.8 billion pounds ($417 million) in market capitalisation compared to Wednesday, the Egypt Independent reported.

While investors leaned slightly towards selling this week, Fakher said, "the expected exodus out of the market in reaction to the political crises was not large, in fact it was small, reflecting investor confidence in the Egyptian capital market and its ability to withstand crises."

Fakher said the periodic review of the exchange for 2012 was announced this week, and it included several changes: six companies were removed from the main index, EGX 30, and six were added; 14 companies were removed from EGX 70 and at least five added, and nine companies were removed from EGX 100.

Exchange stability coincides with Al-Azhar meeting

Dr. Mahmoud Sultan, economics professor at Cairo University, told Al-Shorfa the exchange's performance "indicates that, despite the tension in the street, it concluded trading on the last day of the week on a high".

This high coincided with the meeting held at Al-Azhar that brought together rival political forces, which agreed on the need to stop the violence in the street and to reach a peaceful solution that suits all parties, he said.

Egypt's Central Bank also approved the bid of Qatar National Bank (QNB) to acquire a majority stake in the National Societe Generale Bank (NSGB) in Egypt, and investors are now moving to snap up profits, according to Sultan.

"In this move, observers and analysts see significant support for banking sector stocks and an injection of more liquidity in the Egyptian market, which explains the general stability of bank stocks in the stock market," he said.

On Wednesday, Fitch Ratings cut Egypt's sovereign credit rating a notch, from B-plus to B.

Financial analyst Sami Abdel Nour, an economics professor at Ain Shams University, said the downgrade "has had an inconsequential and negligible impact [on the stock market]. The indicator absorbed the downgrade and resumed its rise in the last days of the week".

In addition, the agreement the Egypt stock exchange signed with an international stock exchange in January has inspired great confidence in the Egyptian financial market among capital investors, he said.

"The exchange and it stocks will get a respite once the dark political cloud is lifted," Abdel Nour said, and if political calm continues, "the main index is expected to rise".

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    نصر الدين محمد

    2013-2-13

    Praise God! Everything in Egypt is affected by the circumstances that are happening there, because surely the Egyptians are impressed by the political incidents. We all know that Egypt has been in distress, even after the 25th January revolution, which was supposed to realize the people's demands. All the officials heard these demands, but they did not make any move at all. Everyone is trying to throw the responsibility on others. Therefore, the Stock Market must be greatly affected because of this situation. Egypt's economy is threatened every second. It is normal for this to happen, because there are no more job opportunities. Even university graduates are sitting in cafes. Even the employees who used to work for esteemed companies, whether private or governmental, have been dismissed, so it makes sense that there is no stability at all in Egypt, either in the economy or in any other field. It is important to know that the Egyptians are paying the price; they are the ones who have to endure everything. May God help the Egyptians, because if they have money, they feel worried about it, as they can't start any small projects or make any investments to increase their income. They are afraid to take this step; it is very difficult. We must keep Egypt stable; actually, thank God, I was very happy when I heard that the Stock Market is stable these days, although this period is full of continuous political incidents; we have all witnessed the political crisis that Egypt is going through, but the Egyptians or businessmen tried to save the Stock Market, and we realize that, thank God, it is stable, because the situation is actually sorrowful and it is good that it ended this way not worse.

  • فيكتور سلامة

    2013-2-12

    We will see the resistance under the rule of the Muslim Brotherhood. I think that we would see scandals. Do you expect anything from people who take loans and bonds from Qatar and then achieve anything? They come to destroy the country. Can anyone convince me otherwise? When a state like Egypt is ruled by a bunch of prisoners, what else should we expect? You can dream about anything like the freedom of expression and these stuff as you wish, but I assure you that nothing would make any progress. They might even consider that the work of the stock exchange is prohibited. This current crisis is caused by the Muslim Brothers because they want to seize everything and then control the whole state. They will turn into a new National Democratic Party and I do not exclude the possibility of them buying all the shares in the stock exchange and then enslaving us. If you do not believe me, you can see any merchant from the Muslim Brotherhood and you will find that he is the richest one in his market because all the members of the Muslim Brotherhood buy from him. So, you can expect what will happen if they owned the stock exchange and the commerce. Everything would be fine, God willing. They used to allow and prohibit things however they wish. You can leave everything to them, as they are experienced in politics and trade. When they were with the people, they used to curse Mubarak and the government, and demand the rights of the opposition. However, today do not want anyone to speak other than them. They want us to be like the sheep and obey them. However, this will never happen, God willing.

  • يوب باهر

    2013-2-11

    I feel very happy when I see the stability in the stock market despite all the events taking place around us, and of course all of us have been affected by all the political events that are taking place. I really hope that we will make it through the crisis safely. We’ve had enough. Everyone is trying to look after their own interests, despite the fact that if every one of us were to think about the interests of those around them and think about the interests of everybody, we would see the country get in a much better situation. Perhaps the Egyptian stock market is really in need of help, whether it be from the international stock market or otherwise, but the important thing is that the stock market is relatively stable, and thank Allah for that. I hope that all of the Egyptian people will not feel scared of the future. On the contrary, they should try to play their part in bettering the conditions of society.

  • إيهاب رشاد

    2013-2-8

    It is very nice that the worst didn’t happen, because if it had collapsed this time, it would have not risen again. This is because it collapses each time and brings woes to people, and then holds together and rises again. This is happens so many times, so much so that I started to question the sanity of these people who are always investing in the stock market although that they know the market is a failure. But it turned out that I was the one who knew nothing and that Egypt’s economy is indeed of interest to everyone. But we only need stability and the politicians should take note of that. If they like this country as they say in their slogans, they should bring a little bit of stability to Egypt and anyone who has any demands must make such demands when the nation starts to stand on its feet. Being in power is such an abominable thing since it makes different people out of us.

  • تيسير المنفلوطى

    2013-2-8

    The Egyptian Stock Exchange will prosper. In fact, I have never doubted over the last two years that it would collapse or be affected. I have been confident even over the weeks of demonstrations that Allah will protect Egypt and Egyptians. I thought that nothing will affect Egypt and it will be a tempest in a teacup. Thus, if you want to know the real Egyptian economy, you should have a look at it in the coming period. With more stability and investments, God willing, the Egyptian economy will become steady and achieve prosperity. Thus, we should not fear from the Egyptian economy, God willing, regardless of the opposition and the rate of demonstrations. Yet, Egyptians are looking for their case whatever the issue is. God willing, the problem will be solved and adjusted and what counts most is that Egypt has got rid of monopolists, murderers and thieves. In fact, once everything will be in order, Egypt will achieve prosperity and we are not worried about the Egyptian Stock Exchange regardless of the time. From a natural point of view, what is currently taking place in Egypt represents only a little compared to what happened in the world revolutions. If the Egyptian Stock Market remains steady, I will be right and everything will be nothing but a storm in a teapot and things will follow the right path in order to make the revolution a success at the economic, political and security levels but we should work and be patient until we overcome this situation. Indeed, I do not like to feel that I am facilitating things but I could be optimistic. Despite the current events, I have confidence in Egyptians and in the Egyptian economy which I know very well. Indeed, I am aware that things will follow a right path God willing.

  • سهيل سامى

    2013-2-8

    The Egyptian stock market will witness a leap during the coming years and will preserve its stability in this status, God willing, with the spread of stability in the country and with the beginning of investments. Beginning with the Renaissance project, the stock market will rise to its highest levels. I'd like to tell everyone: if you don't believe me, just go and invest in the Egyptian stock market, because it will be the cause of your wealth. Just take advice from the specialists and ask them; they will answer you that the Egyptian stock and its economy are coming; no way! The biggest proof is that the Egyptian stock market is maintaining its levels despite the conditions which Egypt is witnessing, and it will not crash, God willing!

  • إحسان بهية

    2013-2-8

    Actually, this was not expected, but thank God these incidents occurred last week; this indicated a big fall in the rates of stocks in the Egyptian stock market, because of the excessive demonstrations throughout Egypt, in which dozens of people were killed. Thank God that the businessmen and traders realized that Egypt will be protected and remain unaffected, and will soon recover from its plague. Thank God for this! But we must be aware that being unaffected by the incidents means that the Egyptian stock market will prosper and grow strongly when Egypt is stable and the economy grows. The economists must talk about this, that tranquility and stability in Egypt will lead to such and such, to convince people that stability is not only a political fact, but that it also has great economic results. Praise be to God that Egypt has stopped at this limit! In many countries in which there have been revolutions, conditions did not stabilize at all. Let's take the French Revolution as an example, where life was unstable and there were fights for more than eighteen years. Can anyone imagine that Egypt would still be resisting and unstable for that long? Thank God for this status, which proves God's words that Egypt will remain protected by God till Doomsday! Beware God and fear God, those of you who want to cause strife and to make life in Egypt worse, because you are surely hurting the Muslims, and whoever hurts Muslims will be severely punished by God!

  • جواد ياسر

    2013-2-8

    We all wish that Egypt would live in stability and security, because we always try to pass the crisis because the economy of Egypt is contingent upon the current events in Egypt, which witness demonstrations and victims every day. No one cares about the conditions of the Egyptian stock exchange. I think that the most important thing is to ensure that the survival of the stock exchange through separating it from the political events in Egypt. The officials have succeeded in achieving this and we all see that the performance of the stock exchange stabilizes. Hence, I thank all the officials in the stock exchange because this will boost the stability in the coming period.

  • امل عثمان

    2013-2-7

    I have a feeling that this is the calm before the storm. I'm not pessimistic, but this is the truth, because the stock market closes on Friday, therefore businessmen dealt with the situation according to the agreement of the Al Azhar dialogue only. But they were not aware that the street is different and that it is not linked to the political powers and the government; it has its own attitude and its own opinion. That is where the differences came from, and the market will reopen on Monday and may suffer big losses! Let's wait and curse all those who cause these catastrophic events in Egypt!

  • امال الابراهيمى

    2013-2-7

    O God! The people in the Egyptian stock market deserve to be admitted to Paradise! Whenever there are riots and chaos in Egypt, we say it is over, but stock market stands on its feet again, it proves its existence and it becomes stronger! I swear, since the first day of the revolution - what shall I say? - the people's money is pure and right, or God does not want Egypt to fall! May God protect Egypt and its economy, because we are good people! I swear, what is happening to us is only because of the tyranny and oppression, which do not want to leave us alone! We want God to be with us and make it easy for us during the next stage, and we want the stock market to endure during this stage as it did during the last period; then development and prosperity will also come. I heard that the Egyptian stock exchange has been associated with the global exchange or something like that, which will make us achieve globalization! I dream that our Egyptian pound is gaining value against the US dollar, which is worth 7 Egyptian pounds! What is happening? I truly hope God will protect Egypt. At one time the dollar was worth three Egyptian pounds and we were going through a very hard time. I have the feeling that the reason why people did not sell or suffer losses in the market last week was that the traders understood the game, which is that whatever happens, Egypt preserves itself. So they decided not to sell, but rather buy and be steady, because whatever happens, Egypt will regain calm and stability in the coming days, as it does each time. Actually, they were right, because Egypt will remain safe, secure and peaceful, God willing, despite the plots of the plotters! We salute the men of Al-Azhar who took the initiative; these are respectable people and Egypt is always proud of them, as they are always responsible!

  • ايلين موسى

    2013-2-6

    This is really unexpected at all. I am worried about the Egyptian Stock Exchange. They sometimes claim that it is ok. Some other times, they unfortunately claim that it is suffering from a crisis because of the current political events in the country. In fact, investors have become afraid to invest in the Stock Exchange since everyone knows that the latter is based on chance, sometimes it is beneficial and some other times it is a failure. Only Allah knows what will take place in the future but when economists actually say that the Egyptian Stock Exchange is steady, I think that this is a positive indicator and it is possible that investments will increase in the Stock Exchange and traders will not be afraid at all under the current events. Indeed, I believe that the conditions are getting more stable slowly and we need some more time and effort in order to achieve total stability. In fact, everyone feels the amount of the current crisis. In this respect, people are even unable to earn their living because prices have increased and the Egyptian pound has lost value compared to the euro and dollar, of course. Everything is getting more expensive while we are helpless. If we think of making a demonstration, we find that our country is suffering and it is enough for the events which are currently taking place. Indeed, if we want to buy something, we will not be able to do that because we do not have money since there are not any job opportunities. Thus, major Stock Exchange traders should not be afraid of it so that the conditions of Egyptians will become more stable. We have seriously got tired and did not know what to do in the future. We need solutions for the Egyptian economic situation and it is enough manipulating the State. We want it to resume its former situation. Therefore, we call on Mr. President to do something to calm people down. He should give up his threats, intimidation, and promises. If he wants to maintain the safety of Egypt, he should implement the demands of the people.

  • منصور عبد الله

    2013-2-6

    Indeed, I thank God the Egyptian stock exchange stabilized because the developments in the Egyptian street could negatively affect the Egyptian stock exchange, which can suffer from decline because the economy itself declines and the Egyptian pound is almost dead compared to the dollar and euro. The Egyptian pound’s value is declining and thus we need to support the economy of our country. We must play a role to save our country from this ordeal.

  • احمد الشناوى

    2013-2-5

    Frankly speaking, I am not really convinced that the Egyptian stock exchange is actually not affected by the important events in the country. Indeed, we went through a hazy situation during the last week. There were many awful events. The citizens could not venture to leave their homes during the week. Such events affect the Egyptian public opinion in different aspects. In this respect, we suppose that the stock market was affected significantly. We watched in the news the decline in the stock market indicators in the beginning of the crisis. After that, the crisis was resolved little by little, praise be to God. On the other hand, the Egyptian stock exchange tried to overcome the decline through working on consistency. We all noticed the great public interest, during those days, in the Egyptian stock exchange. The Egyptian market speculators tried hard to save the stock exchange in any way possible. This financial institution was in desperate need for help. I am very surprised upon the investors’ confidence in the stock exchange. Indeed, the speculators are dealing with the stock exchange without any problems. It was just the opposite. The economic activities were not affected by the political events which took place in Egypt. On the other hand, there were serious and fruitful talks at al-Azhar, which resulted in a roadmap. The success of the talks is attributable to the confidence in al-Azhar papers. I hope that all parties will be committed to the conditions of the roadmap which might be the last chance for the Egyptian people to restore stability. In fact, we noticed that the streets are calmer after the declaration of the roadmap. We also noticed the criminality of the Egyptian police in dealing with the demonstrators, especially in the past couple of days. I also hope that the Egyptian people will seek their own interests rather than demonstrating in Tahrir Square. In fact, we respect the demonstrators of the Tahrir Square. However, their behavior is somehow risky. For this reason, I call on them to avoid risks and seek the national interests so that the investors could trust the Egyptian stock exchange. We need to recover the investment activities.

  • الصقر

    2013-2-3

    When the home is stable, all the institutions of the state, including the Egyptian stock exchange would stabilize, God willing.

  • سيد عبدو

    2013-2-3

    May God help Egypt and we ask God to protect it and its youth. Poetry/ Who are those heroes… They are the Egyptians… Who are those people; they are its precious youth. The youth represent the real wealth of Egypt rather than the dollars or millions.