Egypt’s EGX70 Falls 11.07% as Exchange Halts Trading for Half an Hour

Key Facts

The Egyptian Exchange closed Sunday, October 25, with broad losses, as the EGX30 fell 3.56% to 49,234.35 points. The decline was steeper among small- and mid-cap stocks: the EGX70 dropped 11.07% to 15,282.64 points, while the broader EGX100 fell 8.88% to 21,064.53 points. Losses extended to most stocks, with 209 companies falling, 10 rising and 5 unchanged. The exchange halted trading for half an hour after the EGX100 fell 10% during the session. The halt came as the market decline widened, while the EGX30 ended the session with a smaller loss than its drop at midday.

The EGX30 had fallen 5.38% to 48,308.01 points at midday before paring its losses by the close. The session recorded trades worth 7.176 billion pounds across 250,360 transactions. Foreign investors were net sellers of 80.205 million pounds, while Egyptians recorded net purchases of 47.605 million pounds and Arab investors net purchases of 32.600 million pounds. These flows reflect divergent investor positions during a session marked by broad stock losses. Foreign selling coincided with notable pressure on the indices, while purchases by local and Arab investors were not enough to prevent the market’s decline.

The sell-off coincided with pressure on the pound, with the dollar approaching 56 pounds on October 25. The Central Bank’s dollar selling rate stood at 55.89 pounds, compared with 55.75 pounds for buying. Selling rates at major banks ranged from 55.75 to 55.85 pounds. A market analyst told Asharq Bloomberg that the stock decline was linked to rising geopolitical tensions and higher oil prices, and the pressure they could bring to inflation, fuel and exports. The analyst also cited the pound’s decline and foreign investors’ concerns, describing them as a set of factors weighing on the market.

The decline also coincided with ongoing share offerings, including Banque du Caire’s offering and MNT-Halan’s offering. Analysts said fund managers were freeing up cash to participate in the offerings, leaving fewer buyers in the market. In Banque du Caire’s offering, subscription orders in the retail tranche reached 2.54 times the shares allocated to it on October 25, and the subscription period remained open until October 28. An Asharq Bloomberg guest said on October 14 that local institutions had turned to selling to raise cash ahead of participating in MNT-Halan’s offering, amid pressure linked to margin calls. Meanwhile, annual urban inflation slowed to 13.9% in September from 14.5% in August, while prices rose 1.3% month on month.

Analysts have linked the offerings to the availability of liquidity, but the figures do not establish that subscriptions directly caused Sunday’s decline. The latest inflation reading provides additional context for price pressures: the annual rate fell for a second consecutive month, while prices continued to rise month on month. The pound’s movement was reflected in the bank exchange rates recorded during the session, alongside broad stock losses and net foreign selling. The Central Bank of Egypt is scheduled to hold its meeting on October 29, the next monetary policy event cited in the available information. The session after the meeting will be a subsequent point for tracking the market’s response to the currency and inflation trajectory.