Foreign Buying Gives Way to Domestic Buying as (EGX) Ends Week Higher - The Middle East Observer
The Egyptian Exchange (EGX) ended the trading week on a firmer footing on Thursday, recovering part of the previous session’s losses as Egyptian and Arab investors returned to buying, while the Central Bank of Egypt’s decision to leave interest rates unchanged provided a supportive macroeconomic backdrop. The rebound indicated that Wednesday’s decline reflected a period […]
The Egyptian Exchange (EGX) ended the trading week on a firmer footing on Thursday, recovering part of the previous session’s losses as Egyptian andArab investorsreturned to buying, while the Central Bank of Egypt’s decision to leave interest rates unchanged provided a supportive macroeconomic backdrop. The rebound indicated that Wednesday’s decline reflected a period of profit-taking rather than a broader deterioration in market sentiment. The benchmarkEGX30rose0. 54%to close at52,311. 51 points, while theEGX33 Shariah Indexgained0. 53%to5,876. 53 points. TheEGX35-LVadvanced1. 01%to6,155. 36 points, theEGX70 Equal Weight Indexclimbed1. 73%to16,281. 62 points, and the broaderEGX100 Equal Weight Indexincreased1. 47%to22,067. 78 points. The market capitalisation of listed shares increased toEGP 3. 812 trillion, recovering approximatelyEGP 29. 5 billionfrom Wednesday’s close and reversing a significant portion of the previous session’s decline. Trading activity remained active, with aroundEGP 9. 4-9. 5 billionworth of securities traded through approximately189,000 transactions, involving about2. 71 billion shares, reflecting continuedinvestor participationrather than a low-volume rebound. Domestic Investors OffsetForeign SellingOfficial EGX investor data showed a clear rotation in market flows compared with the previous trading session. Egyptian investors recordednet purchases of EGP 323. 2 million, while Arab investors addedEGP 1. 32 billionon a net basis. Non-Arab foreign investors, meanwhile, werenet sellers of EGP 1. 65 billion. The figures marked a reversal from Wednesday, when foreign investors had been net buyers while domestic investors realised profits. Thursday’s trading therefore reflected a shift in investor composition rather than a one-sided move in market sentiment, with domestic liquidity absorbing foreign selling. Central Bank HoldsRates SteadyInvestor sentiment was also supported by theCentral Bank of Egypt’s Monetary Policy Committee, which left its benchmark interest rates unchanged, maintaining the overnight deposit rate at19. 00%, the overnight lending rate at20. 00%, and the main operation and discount rates at19. 50%. The committee cited moderating inflationary pressures alongside persistent geopolitical uncertainty, concluding that maintaining current policy settings remained appropriate while continuing to monitor domestic and international economic developments. For equity investors, the decision reduced short-term monetary policy uncertainty ahead of the second-quarter corporate earnings season and reinforced expectations that future policy decisions will remain data dependent. Recovery Broadens BeyondBlue ChipsThursday’s recovery extended beyond the benchmark index, with the stronger performance of theEGX70andEGX100indicating renewed investor appetite for small and medium-sized companies after the previous session’s correction. Buying interest was particularly evident in several property-related companies. United Housing & Developmentadvanced20. 00%,Naeem Real Estate Holding Groupgained19. 99%, whileGharbia Islamic Housing Developmentrose19. 15%, highlighting renewed demand for selected real estate stocks. Elsewhere, trading across banking, financial services and industrial companies remained mixed, suggesting investors continued to favour fundamentally strong companies rather than adopting broad-based sector positioning. Capital Market ReformContinuesBeyond the day’s trading, investors continued to assess structural reforms aimed at strengthening Egypt’s capital market. Recent discussions between the Egyptian Exchange, the Financial Regulatory Authority and the Egyptian Tax Authority on clarifying the tax treatment of investment funds represent an important step towards improving regulatory certainty. Market participants have long argued that greater clarity over taxation would facilitate the establishment of additional investment funds, improve operational consistency across market participants and strengthen Egypt’s attractiveness to institutional investors. At the same time, the EGX continues to expand its primary market. The Exchange recently received an application to listEl Taameer Tourism Companyon the SME market, supporting the government’s broader strategy of increasing the number and diversity of listed companies and expanding financing opportunities for the private sector. Top MoversAmong the session’s strongest performers:United Housing & Developmentrose20. 00%toEGP 20. 10. Naeem Real Estate Holding Groupgained19. 99%toEGP 19. 33. Gharbia Islamic Housing Developmentadvanced19. 15%toEGP 51. 70. The weakest performers included:Saudi Egyptian Investment & Finance, down4. 97%toEGP 244. 33. GMC Group for Industrial, Commercial & Financial Investments, down4. 59%. Middle & West Delta Flour Mills, down3. 05%. OutlookInvestors will now turn their attention to several near-term catalysts that are likely to influence market direction during the coming weeks. These include the forthcomingsecond-quarter corporate earnings season, progress in implementing the proposedinvestment fund tax reforms, developments in the government’sIPOand State Ownership Programme, and the trajectory of inflation following June’s moderation. Future guidance from the Central Bank of Egypt will also remain closely watched as investors assess the outlook for monetary policy. Thursday’s rebound demonstrated that domestic liquidity remained resilient despite intermittent foreign selling. While individual trading sessions are likely to remain sensitive to regional geopolitical developments and shifts in global investor sentiment, continued progress on macroeconomic stabilisation, regulatory reform and capital market development would further strengthen Egypt’s investment case for both domestic and international institutional investors. Related news:Banque Misr Plans EGP 3 Billion Hospitality Investment FundWE Partners with Grofa to Deliver Smart Infrastructure for New Urban DevelopmentRead also:Egypt’s Stock Market Ends Week in Green as EGX Nears International Standards & NormsNon-Petroleum Exports: Egypt Targets $99bn by 2030 on Digital Trade Reform