Renaissance Dam sparks huge losses for Egyptian Stock Exchange

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This week the Egyptian Stock Exchange incurred huge losses in the market capital of EGP 12 billion. The shocking losses caused the trading session to be halted for half an hour.

The Egyptian Exchange ​said in a statement that the suspension of trading was due to the decline of the broader index EGX 100 by five per cent. It suspended trading in about 87 shares, after falling more than five per cent, due to increased investor sales from foreign institutions.

Analysts attributed market losses to factors such as stalled negotiations on the Renaissance Dam and speculation, the cancellation of financial control transactions, and its rejection of corporate calendars.

Head of the Al-Awael Financial Consulting Company, Wael Enaba, attributed, in press statements, the reason for the sharp declines in the Egyptian Stock Exchange since last March to several factors, including political ones. He explained that these factors are mostly related to the negotiations regarding the Renaissance Dam, which pushed some investors to exit the market until the vision becomes clear.

The Egyptian Stock Exchange witnessed a collective decline, with continued selling pressure from Egyptian and foreign investors. The transactions of Arab investors tended to buy with a net worth of EGP 281,700. In comparison, Egyptian and foreign investors’ transactions tended towards selling with a net of EGP 136,190 and EGP 145,540 respectively.

The main index closed down 1.54 per cent to 1,0256 points after falling more than 2.5 per cent during transactions, and DICE Underwear shares fell 9.9 per cent with its acquisition of the second-largest trading volume. Shares in Commercial International Bank (CIB) fell by 3.25 per cent, after falling more than four per cent earlier in the session. It is noteworthy that the Stock Exchange witnessed heavy losses during the past month of March, and on March 23, the Egyptian Stock Exchange lost about EGP 40 billion in less than 10 hours from its market value.

Rania Yaqoub, Chairman of the Board of Directors of 3way-finance, explained that no political or economic development could avoid these violent losses.