At the end of the 2012/2013 fiscal year, economic growth in Egypt decreased 2.2 percent, according to Ahram Online. Now, in the midst of political turmoil — due to local investors — stocks in the country have seen an impressive increase.
Newly appointed Prime Minister Hazem El-Beblawi has said that economic progress tops the list of the transitional government. According to recent stock reports, which reveal EGX indexes reaching a five-month high, economic growth talks have produced positive results.
Ahram Online reported that the Egyptian Exchange’s securities index (EGX 30) reached 5615 points after receiving a 1.54 percent boost from ‘investor optimism.’ The report noted that Dutch parent company OCI NV sold off 97 percent of Orascom Construction Industry’s shares last week, which led to the OCI’s de-listing on the main index.
“This is reflected in the increased buying by Egyptian institutions, which possessed OCI shares,” Ashraf Abdel Aziz, head of institutional sales at Arabia Online Securities told Ahram Online. “The optimism is a result of the Central Bank of Egypt’s cutting of the interest rates.”
Last Thursday, the Central Bank slashed interest rates by 50 basis points, Ahram Online reported. Total turnover of roughly $72.2 million resulted from Egyptian institutional investors’ net share purchase of $13 million and Egyptian investors’ stock purchase of $9 million.
“The move sends a strongly positive message to investors and the business community because it means the government – namely the finance ministry and central bank – are united in their vision, which historically has been a challenge — and that’s very reassuring,” Hala El-Said, Cairo University Faculty of Economics and Political Science Dean added.
According to Ahram Online, Egyptian Financial Group-Hermes and Commercial International Bank were amongst the companies listed on the EGX 30 that performed best rising 1.67 percent and 3.05 percent, respectively.
While the Egyptian Exchange’s price index (EGX 70) rose 0.53 percent, real estate entities on EGX 30 including TMG Holding, Six of October for Development and Investment and Palm Hills Development Company gained 0.61 percent, 5.41 percent and 2.45 percent respectively, Ahram Online reported.