{"id":565249,"date":"2021-03-29T13:55:24","date_gmt":"2021-03-29T13:55:24","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2021\/03\/29\/the-egx-was-the-second-most-active-arab-bourse-in-2020\/"},"modified":"2021-03-29T13:55:24","modified_gmt":"2021-03-29T13:55:24","slug":"the-egx-was-the-second-most-active-arab-bourse-in-2020","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2021\/03\/29\/the-egx-was-the-second-most-active-arab-bourse-in-2020\/","title":{"rendered":"The EGX was the second most active Arab bourse in 2020"},"content":{"rendered":"

<\/a> The EGX was the second most active Arab bourse in 2020, with some USD 43.9 bn-worth <\/strong>of equities changing hands,<\/strong> and nearly doubling from USD 25.5 bn in 2019, the Arab Federation of Exchanges said in its annual report (pdf)<\/a>. By activity, the EGX trailed only behind Saudi\u2019s Tadawul stock exchange, which executed USD 556 bn in transactions last year, and coming ahead of the Bahrain Stock Exchange\u2019s USD 35.4 in annual turnover. While the level of turnover was high compared to the rest (apart from Tadawul), the EGX\u2019s share in market capitalization was low relative to other Arab exchanges. This points to a lack of new listings and a market vulnerable to external factors such as the March investor sell-off that swept EMs in early 2020.<\/p>\n

Egyptian constituents only account for 1.3% of market capitalization: <\/strong>The EGX\u2019s USD 41.1 bn in market capitalization pales in comparison to a total USD 3.2 tn across the region. Companies on the Tadawul accounted for 75% of regional market cap, followed by Abu Dhabi\u2019s ADX at 6.2% and Qatar\u2019s DSM at 5.1%.<\/p>\n

Egypt was also the worst performer on an annual basis, <\/strong>with the EGX30 sliding 22% last year to 10,845 points \u2014 its lowest level since 2016. However, most other 17 Arab indices also fell on a yearly basis. The Tadawul All Share Index (TASI) was a notable exception, eking out y-o-y growth of 4%.<\/p>\n

And our share of new IPOs was tiny. <\/strong>Mid-cap real estate player Emerald was the only new major listing on the EGX in 2020, out of ten Arab companies the report says tapped their local exchanges in 2020. Diagnostics company Speed Medical was the only other new name on the main market in 2020 after completing a jump from small-cap NileX last December<\/a>.<\/p>\n

What happened? The pandemic made an already delicate situation worse.<\/strong> Most of the players who kept volumes up throughout 2020 were retail investors and local institutions whose trades were spread out over the dozens and dozens of small brokerages that have clung to their licenses for years despite anemic business. Foreigners have largely been sitting on the sidelines after having sold out of the market amid the great March selloff of 2020<\/a>. Plus, the EGX suffered from a dearth of new listings, seeing only one new IPOs in 2020 and two in 2019.<\/p>\n

Recent news is raising hopes that the IPO pipeline is heating up this year,<\/strong> with school management company Taaleem<\/a> kicking off subscription for an offering that\u2019s in final stages and Macro Group Pharma<\/a> announcing a guidance range for its debut stock price earlier this week. London-listed consumer healthcare giant IDH<\/a> is also planning a dual listing of at least 5% of its shares on the EGX expected to hit the market soon.<\/p>\n

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