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The EGX30 dropped 3.3% at yesterday’s close as global equity markets react to the Trump White House’s bid to reshape the post-Second World War economic order. The slide came as little surprise to market watchers, given the volatility rippling across global exchanges, but net selling by local institutional investors — rather than foreign or GCC players — raised eyebrows, CFI Head of Research Ahmed Nashi and EGX board member Rania Yacoub told EnterpriseAM.
Locking in returns, and not panic, drove the market, as local institutional investors were likely cashing in on recent gains, including in shares like EFG Holding and EgyptAlum, Nashi said. They’re taking advantage of the current turbulence to lock in returns and will buy back into many of the same names when markets stabilize, according to Nashi.
Oddly enough, it’s retail investors who are helping keep the market steady. With retail traders accounting for around 70% of turnover on the EGX, the sell-off is unlikely to spiral, Yacoub said. Retail investors tend to be more speculative and that will support a near-term correction, Yacoub explained.
Uncertainty caused by the new US tariffs is the biggest threat to capital markets right now, Yacoub told us, noting that emerging markets are being squeezed out of fresh inflows as both foreign and local investors adopt a wait-and-see approach.
There’s hope for a rebound, with Yacoub telling us that retail activity could help fuel a corrective bounce on the EGX later this week. Nashi expects US and global markets to lead a broader rebound early next week — with Egypt’s bourse catching up soon after, barring further exchange-rate volatility.
Ongoing volatility could push back the government’s plans to list state-owned firms on the EGX, as well as private-sector IPOs, until at least 4Q 2025 or early 2026, both analysts told us. These conditions don’t support new listings — they would hurt valuations and dampen foreign investor appetite for emerging market equities, according to Nashi.
Investor interest in Egypt remains strong, the two analysts told us. Foreign investors tend to prefer debt, while Arab and Gulf investors are more drawn to equities (including strategic stakes) and IPOs, Yacoub told us. She stated that even in the worst of times, the Egyptian market has always remained attractive to regional investors, pointing out that she expects the long-awaited Banque du Caire sale stake to go through this year.
