The Egyptian Stock Exchange achieved unprecedented gains of nearly LE30 billion in August backed by several positive events at the political, economic and market levels that helped boost the confidence of local, Arab and foreign investors, including individuals and institutions.
The stock market witnessed the return of liquidity and purchasing power reflected through its price indicators and trading volumes. The market capitalization of companies listed on the exchange during the month of August gained about US$29.3 billion, marking the second-biggest monthly gain in its history and bringing the market capitalization to LE369.2 billion compared to LE339.9 billion at the end of the July, an increase of 8.6 percent.
Stock exchange experts said the record was achieved primarily due to perceived political stability after the formation of the new Cabinet and President Mohamed Morsy’s cancellation of the supplement to the Constitutional Declaration and dismissal of top military leaders.
Experts said that the Egyptian economy has also received support over past weeks from both Saudi Arabia and Qatar in the form of direct cash deposits.
Financial analyst Mohsen Adel, vice president of the Egyptian Society for the Study of Financing and Investment said that in addition to political stability, several other events helped to bolster the market, including Qatari deposits, the IMF loan negotiations, and recently concluded agreements with China.
The main stock index, EGX30, made gains of 9.6 percent in August to reach its highest level since early March at 2332.25 points.
Adel added that the stock market has witnessed in recent weeks an increase in the size of short and medium-term smart money of investments that aim to take advantage of investment opportunities made available by political stability.
Edited translation from MENA
