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Investing.com – The Egyptian stock market is nearing an all-time high, as local investors scramble to protect their savings from rampant inflation by investing in the Egyptian stock exchange, Bloomberg reports.
At the same time, the share of “Belton Financial Holding (EGX:)” topped the list of the top 10 companies in terms of trading value on the Egyptian Stock Exchange, during the sessions of last week, with trading volumes that reached 1.019 billion papers, with a trading value of 3.9 billion pounds, followed by the “Commercial Bank” share. International (Egypt) (EGX:)” with a trading volume of 23.7 million papers, and a turnover of 1.2 billion pounds.
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Hedging against inflation via stocks
The strategy of hedge against inflation and price hikes by investing in equities has been implemented across the developing world this year, especially in countries facing economic crisis and persistent weakness of their local currency against foreign currencies. The benchmark EGX 30 index has jumped more than 70% in local currency since October and is now about 1% away from surpassing its 2018 peak, according to Bloomberg.
“Egyptian stocks act as a hedge against very high inflation, similar to what happened in Argentina and Nigeria recently,” said Hasnain Malik, equity analyst at Tellimer in Dubai.
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This phenomenon is normal and widespread in many countries. In countries like Turkey and Nigeria, citizens are using stocks as a store of value to combat high inflation, according to the agency.
The Bursa Istanbul 100 index has risen more than 300% since the beginning of 2022, while Nigeria’s NGX All Share Index, which measures the performance of a collection of listed stocks, is up 27% this year. The Egyptian EGX 30 index ranked twelfth in performance in 2023 among 92 indices tracked by Bloomberg.
However, any international investor would see his gains vanish completely if he calculated his earnings on the Egyptian Stock Exchange in US dollars. The dollar-denominated stock index has fallen less than 1% year-to-date, according to Bloomberg.
But for locals, the stock market is a safe haven from rising prices and the devaluation of the pound. Egyptian investors represent about 85% of the value traded on the stock exchange this year, according to data from the stock exchange that exclude deals. Individuals traded 40 billion pounds (1.3 billion) worth of stocks in July alone, more than any other group of investors during that month, according to Bloomberg.
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Egypt, the largest importer of wheat, suffered due to high food prices in the aftermath of the Russo-Ukrainian war. The central bank has devalued the Egyptian pound three times since March 2022, and investors have said they want to see a bigger devaluation before offering more financial support.
As a result, the rate of inflation has increased significantly over the past months. In July, consumer prices in urban areas of the country rose 36.5% annually, setting another record.
stock market today
The Egyptian Stock Exchange indices concluded today’s session on a mixed performance, as the main index, EGX30, increased by 0.54%, to close at 18,062 points.
While the indices of small and medium-sized companies closed down by 0.38% to 3625 points, and the EGX100 index by 0.06% at 5364 points.
The stocks that gained the most today
The highest gainers during Wednesday’s trading were led by Juhayna Food Industries (EGX:) by 20% to close at 17.040 pounds, followed by Ismailia Misr Poultry by 18.89% at 9.00 pounds, then Marseille Egyptian Gulf Real Estate Investment (EGX:) by 10.43% to close at 0.667. fairy.
And in the fourth place came the share of Alexandria Pharmaceuticals and Chemical Industries, up 5.96%, to close at 154.01 pounds, and fifthly was Akromisr for Metal Formwork and Scaffolding, by 5.25%, at 24.24 pounds per share.
The stocks that fell the most today
The stocks that declined the most today were the shares of Beltone Financial Holding Company, by 6.32%, at 3.4 pounds. This is despite the fact that the company’s stock topped the list of the top 10 companies in terms of trading value in the “inside cabin” market on the Egyptian Stock Exchange, during last week’s sessions, with a trading volume of 1.019 billion papers, and a trading value of 3.9 billion pounds.
About a week ago, businessman Ahmed Abu Hashima bought about 541 million shares, equivalent to 9.902%, in Beltone Financial Holding Company, becoming the second largest shareholder in the company, after the main shareholder, the Emirati Chimera Company, whose share is 55.908%, according to the Beltone Financial Company disclosure report. Holding Company for the board of directors and shareholder structure.
Businessman Ahmed Abu Hashima acquired his share in Beltone, through the subscription that the company put forward during the past month to raise 10 billion pounds, to become the largest subscription in the stock market, as it was implemented in the shortest period of time, and the company’s issued and paid-up capital became 10.926 billion. EGP distributed over 5.5 billion shares.
While Speed Medical (EGX:) came in second place in terms of the most declining companies today, with a decline of 4.95% at 0.48 pounds, then Ismailia National Food Industries Company (Foodico) by 4.87% at 45.88 pounds per share.
And in fourth place was the share of Giza General Contracting and Real Estate Investment, with a decrease of 4.55%, closing at 0.315 pounds per share, and fifthly, Pioneers (EGX:) Properties for Urban Development, with a decrease of 4.23%, to close at 2.04 pounds.
2023-08-16 12:45:00
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