Arab Republic of Egypt
Federation of Euro-Asian Stock Exchanges
Economic Development and Outlook
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Egypt embarked on an ambitious economic reform program in November 2016, to achieve fiscal policy reforms and infrastructure development. The Egyptian government aimed to reduce the budget deficit by introducing a value-added tax (VAT) to sustainably increase tax revenues and reforming expenditures by reducing energy subsidies, among other activities. Legislative reform were also applied to include the New Investment Law, Industrial Licensing Law, Microfinance Law, Bankruptcy Law, and Companies Law. Also floating of the Egyptian Pound regulated the foreign exchange market and eliminated the parallel and black markets for foreign currency. The IPO program evaluated an expansive portfolio of 23 state-owned companies for IPO opportunities to improve the exchange’s liquidity and introduce new sectors to the EGX.
Egypt’s sovereign ratings have improved; Moody’s Investors Service, Fitch Ratings, and Standard & Poor’s have each improved the country’s ratings since 2013. Moreover, key economic indicators have been recuperating: Real GDP growth recorded 5.3% in 2017/2018, unemployment dropped to 10% in 2019, and headline inflation was 12.7% in January 2019, down from a peak of 33% in July 2017.
As in terms of market indices, the main index EGX30 achieved recorded an increase of 7.1% at the end of this year compared to last year, while the index with the highest increase was EGX30 USD index with 19.6% increase. EGX70 index witnessed the highest decrease of 23%, while EGX30 Capped index witnessed a minimal decrease of 2.3%.
In terms of Sectors, the banking sector was the most growing this year, recording an increase of 31.5%, and in terms of market capital, this year the market cap. Value has decreased by 5.53%, reaching 708.3 billion EGP, compared to 749.7 billion EGP last year.
EGX achieved an increase of 14.29% in terms of trading value reaching 409.72 EGP, compared to 358.5 EGP in 2018. While the average daily trading value was 0.71 billion EGP compared to 1.06 EGP last year.
As for trading volumes, it achieved 49.79 billion securities this year, compared to 60.77 billion securities last year. While the number of operations recorded this year was 4.97 million, compared to 6.28 million last year.
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