Written by: Mary Ragheb
The Egyptian Stock Exchange index fell by about 5%, to record 27,840 thousand points at the end of Sunday’s trading session, which is the stock exchange’s first working day, after the announcement of the Ras El Hekma deal last Friday, according to which Egypt will obtain dollar liquidity amounting to $35 billion.
The decline coincided with a decline in the price of the dollar in the parallel market to range between 52 and 49 pounds, compared to 63 before the deal was announced, that is, by about 22% in just two days. It is a sharp decline that the parallel market has not witnessed since the beginning of the dollar scarcity crisis that the country suffered from, and that pushed the dollar into the market. Parallel prices reached levels exceeding 70 pounds per dollar, compared to the stability of its price in the official market at about 31 pounds.
The securities analyst at Arabiya Online Company, Mona Mustafa, attributed the reason for the decline in the index Egyptian Stock Exchange The main direct result of the decline in the price of the dollar in the parallel market, explaining that the record highs that the stock market witnessed in the past period came as a result of the dollar-denominated stocks being affected by the movement of the price of the dollar in the parallel market, and the difference between it and its counterpart in the official market.
Mona added another reason, which is that investors began to get rid of stocks quickly, saying: “Whoever was investing was only looking for large and quick returns and not to continue trading on the stock market as his main investment channel.”
Also, the Chairman of the Board of Directors of Horizon Financial Company, Moatasem Al-Shahidi, agreed with Mona, saying: “The hedging motive that prompted investors to buy stocks previously no longer exists, in addition to expectations of a decline in the price of the dollar in the official market to prices lower than the prices of its parallel counterpart, affected by the positive news of the provision of liquidity.” Dollars through Ras Al-Hekma investments.”
In the same context, Adham Gamal El-Din, head of technical analysis at Cairo Capital, believes that the main stock index was affected by the decline in the shares of petrochemical and fertilizer companies because they are denominated in the dollar, the price of which declined in the parallel market.
Real estate stocks are surviving and attracting the appetite of investors
Adham pointed out that real estate stocks were the ones that survived the wave of major declines that the index witnessed today, recommending investing in them during the coming period, and staying away from dollar-denominated stocks, due to high expectations of their losses.
Al-Shahidi agreed with him about the strength of real estate stocks that did not suffer losses, but rather reaped large gains, such as the stock of Talaat Mostafa Company, which rose by about 20% today, stressing that investing in real estate companies will be profitable, especially since there are many real estate companies that will be contracted with. In developing the city of Ras El Hekma.
To follow the latest news and analysis from Economy Plus via WhatsApp, click here
2024-02-25 13:54:16
#stock #market #indices #decline #announcement #Ras #Hekma #deal #EconomyPlus
