The market capitalization increased by about 92 billion pounds, closing at the level of 1.811 trillion pounds at the end of March, compared to the level of 1.72 trillion pounds at the end of December 2023, an increase of about 5.34 percent.

In terms of indicators:

  • The EGX30 index closed at 26,883 points, recording a quarterly increase of about 7.99 percent (continuing the series of gains for the seventh consecutive quarter).

  • While the EGX70 EWI index recorded an increase of 12.8 percent, ending the first quarter at 6,174 points, while the S&P index recorded an increase of about 17.38 percent, closing at 5,396 points.

  • As for the EGX30 capped index, it recorded an increase of about 8.78 percent, closing at 32,830 points, while the EGX100 EWI index recorded an increase of about 11.26 percent, closing the period at 8,767 points.

The total trading value during the first quarter of the current year 2023 amounted to about 4,625.8 billion, while the trading volume amounted to about 76,577 million papers executed in 10,195 thousand transactions.

Shares accounted for 8.24 percent of the total trading value within the booth, while the trading value of bonds/bills represented about 91.76 percent during the first quarter.

Volatile performance... and monthly decline

In the first quarter of this year, the Egyptian Stock Exchange witnessed a clearly fluctuating performance, during which it reached the highest point recorded during the quarter at 33,382 points on March 11, compared to the lowest point recorded during the quarter on January 23, at 27,587 points.

During the month of March, the Egyptian Stock Exchange recorded a declining performance, as the market capitalization of listed shares declined by 188 billion pounds, reaching the level of 1.811 trillion pounds, compared to the level of 1.999 trillion pounds at the end of last February.

Regarding the movement of indicators (during the month of March), the EGX30 index closed at 26,883 points, recording a decline of about 7.18 percent compared to the level of 28,964 points at the end of February. The egx70 ewi index recorded a decline of 15.5 percent, closing at 6,174 points, compared to 7,306 points, and as for the egx30 capped index, it recorded a decline of about 9.38 percent, closing at 32,830 points, compared to 36,227 points.

While the EGX100 EWI index recorded a decline of about 14.37 percent, closing the period at 8,767 points, compared to 10,239 points.

  • The total trading value during the month of March amounted to about 2,154.1 billion, while the trading volume amounted to about 16,675 million papers executed in 2,784 thousand transactions.

  • This is compared to a total trading value of 1,334.8 billion pounds and a trading volume of 29,522 million papers executed in 3,936 thousand transactions during the previous month.

The most prominent reasons

In turn, the economic expert and member of the Board of Directors of Al-Hurria Securities Company, Dr. Hanan Ramses, said in exclusive statements to the “Eqtisad Sky News Arabia” website that the Egyptian Stock Exchange witnessed fluctuating performance - especially in the last March sessions - due to many reasons, the most important of which is :

  • Weak dividends of listed companies.

  • The decision to liberalize the exchange rate according to supply and demand and raise interest rates.

It is noteworthy that before the end of the first week of March, the Central Bank of Egypt decided to allow the pound’s exchange rate to move according to market mechanisms, after a sudden decision to raise interest rates significantly by 6 percent.

This came after the Egyptian government devalued its currency 3 times since early 2022. The latest decision was a blow to the parallel market for foreign currency.

Ramses adds: The March sessions witnessed the main index of the stock market approaching a record level of 34,500 points, but it soon declined again and declined in some sessions by about a thousand points per session in light of the fluctuation in performance, which caused traders to fear during the current stage.

It explains that the decision to raise interest rates during the month on treasury bonds and bills had a negative impact quickly and caused a significant decline in individual trading in stocks, in addition to the impact of FTSE Russell placing Egypt under surveillance with the possibility of lowering its rating from emerging markets to unrated. This was reflected in strong foreign transactions and the intense selling trend in stocks.

  • In the first quarter of the year, Egyptians' transactions recorded 88.7 percent of the total transactions in registered shares, while foreigners accounted for 4.9 percent and Arabs accounted for 6.4 percent, after excluding transactions.

  • Foreigners recorded net purchases worth 2,531.0 million pounds, while Arabs recorded net sales worth 1,075.8 million pounds, after excluding transactions.

Formation of purchasing centers

After the quarterly performance, which was marked by fluctuations, the financial markets expert expects a “change in vision” in the month of April, in terms of the tendency of traders to form strong purchasing positions in stocks, supported by the significant decline in stock prices during the recent period, stressing at the same time the importance of the period witnessing The upcoming interest rate reduction for treasury bonds and bills, to support the return of investments and flows to the market again.

The Monetary Policy Committee of the Central Bank of Egypt decided, in an extraordinary meeting on March 6, to raise the overnight deposit and lending rates and the Central Bank’s main operation rate by 600 basis points to reach 27.25 percent, 28.25 percent, and 27.75 percent, respectively. The Central Bank of Egypt also decided to raise the credit and discount rates by 600 basis points to reach 27.75 percent.

The main index of the Egyptian Stock Exchange rose by about 2.6 percent in the first immediate response to the decisions to raise interest and liberalize the currency, in light of Egyptian traders’ tendency to buy, which supported market capital gains of 46.4 billion pounds in the session of Wednesday, March 6, after which it witnessed varying levels.

In turn, the Managing Director of Alpha Financial Investment Management Company, Mohamed Hassan, in exclusive statements to the “Eqtisad Sky News Arabia” website, attributes the reasons for the fluctuation in market performance, in addition to the March declines, to the following factors:

  • The violent profit-taking operations that the market was exposed to after the movement of indices recorded record levels during the previous period.

  • Calm transactions during the month of Ramadan.

  • The impact of the decision to liberalize the exchange rate of the pound.

  • Negative assessments issued by an international institution regarding placing Egypt on the watch list.

FTSE Russell Group kept Egypt on its watch list for a possible downgrade in its global stock index.

Egypt remains on the watch list for possibly moving from the “secondary emerging” market category to “unclassified,” and an update to its status is expected to be issued by the end of June.

He expected the market to witness positive movement after the upcoming Eid al-Fitr holiday, and to rise again with support from the current opportunities resulting from stock declines, which represents good opportunities to form purchasing positions in addition to supporting the stability of the pound’s exchange rate as foreign investors flow into the market again.