{"id":619382,"date":"2024-05-01T00:00:00","date_gmt":"2024-05-01T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2024\/05\/01\/egx30-down-6-to-four-month-low\/"},"modified":"2024-05-01T00:00:00","modified_gmt":"2024-05-01T00:00:00","slug":"egx30-down-6-to-four-month-low","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2024\/05\/01\/egx30-down-6-to-four-month-low\/","title":{"rendered":"EGX30 down 6% to four-month low"},"content":{"rendered":"

Good morning, friends. <\/strong>The EGX30 may be down, but we hope that all of your spirits are up with a long weekend just two days away. In case no one told you, the public and private sectors and all banks will be off on Sunday and Monday next week in observance of Labor Day and Sham El Nessim.<\/p>\n

In today\u2019s issue<\/strong>, we\u2019ve got news that auto sales have slumped to their lowest in at least five years, another Chinese manufacturing project in the works (no surprise here), the prospect of increased trade and investment cooperation with Belarus, and much, much more for you today.<\/p>\n

** DID YOU KNOW that we now cover <\/strong>Saudi Arabia<\/a><\/strong> and the <\/strong>UAE<\/a><\/strong>?<\/strong><\/p>\n

PSA- <\/p>\n

WEATHER- It\u2019s another warm and sunny day in Cairo today<\/strong>, with a high of 30\u00b0C and a low of 18\u00b0C, according to our favorite weather app.<\/p>\n

It\u2019s a little cooler and breezier in Alexandria<\/strong>, with a high of 25\u00b0C and a low of 16\u00b0C.<\/p>\n

EGX WATCH- <\/p>\n

<\/a> The EGX30 dropped 6.0% at yesterday\u2019s close<\/strong>, with each of the index\u2019s components \u2014 bar E-finance with a modest 0.4% gain \u2014 ending in the red, after the index jumped 5.6%<\/a> and reached a four-year intraday high the day before. The index now sits at 24,449 \u2014 its lowest level in four months \u2014 and is down 1.8% YTD. <\/p>\n

It\u2019s all about figuring out the value of the EGP, say EGX insiders: <\/strong>Sharp fluctuations on the bourse have been on the back of traders trying to figure out the value of stocks as the EGP settles following the float of the national currency in March, Former EGX board member Ehab Saied told Enterprise.<\/p>\n

The why: <\/strong>The EGX reached historic highs in the run up to the float \u2014 hitting 35k points when the EGP exchange rate against the greenback on the parallel market was in and around the EGP 70 mark \u2014 as investors looked to the bourse to hedge against currency volatility, Saied explained. Now we\u2019ve said goodbye to the unpredictability of the parallel markers and investors are no longer looking towards the EGX as a way to hedge, investors are trying to figure out the actual value of stocks.<\/p>\n

But <\/strong>there\u2019s also other drivers of market instability:<\/strong> Rumors about capital gain taxes on EGX transactions have been circulating in the local media have affected the market, Horizon Security Brokerage\u2019s Moatasem Al Shahidy told Al Ain<\/a>. Heightened tensions in the region have also added to the unpredictability of the market, he added.<\/p>\n

WATCH THIS SPACE-<\/p>\n

<\/a> A more optimistic primary surplus forecast: <\/strong>Finance Minister Mohamed Maait now expects the country\u2019s primary surplus to come in at 5.75% by the end of the current fiscal year on the back of the arrival of around USD 12 bn from the landmark Ras El Hekma agreement, he told Morgan Stanley\u2019s head of EMEA Clare Woodman, according to a statement<\/a> from the ministry. The government\u2019s last forecast penciled in a primary surplus of 2.5%<\/a> for the current fiscal year.<\/p>\n

And a more positive budget deficit to boot: <\/strong>Maait also sees the budget deficit finishing the fiscal year at 3.95%, down from the government\u2019s forecast of 7.0%.<\/p>\n

More Morgan Stanley news to come?<\/strong> \u201cWe look forward to benefiting from the capabilities of Morgan Stanley and enhancing cooperation in hedging arrangements against rising prices for the most popular commodities... and in non-traditional financing,\u201d Maait said.<\/p>\n

HAPPENING TODAY-<\/p>\n

#1- The Immigration Ministry has opened the door for Egyptians living abroad to settle<\/strong> unfulfilled military service obligations<\/strong> for two months starting today, according to a ministry statement<\/a>. The settlement cost has changed to USD 7k \/ EUR 7k<\/a> from USD 5k \/ EUR 5k in the first iteration of the initiative.<\/p>\n

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#2- Attention, investors:<\/strong> Supply Minister Ali El Moselhi will offer investors the chance to invest in several internal trade projects today, MENA<\/a> reports, without diving deeper into the details. We will be keeping our ears to the ground today to find out more. <\/p>\n

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#3- Early signs of <\/strong>Egypt-EU strategic partnership<\/a><\/strong> bearing fruit?<\/strong> A technical mission from the EU is in town to meet with various ministries and national authorities in Egypt to discuss ways of offering macroeconomic and budget support as part of a two-day trip that started yesterday, according to a statement<\/a> from the International Cooperation Ministry.<\/p>\n

On the agenda: <\/strong>During its trip, the delegation has penciled in meetings with the ministries of finance, planning, international cooperation, trade, environment, electricity, labor, and the Central Bank of Egypt. <\/p>\n

NEWS TRIGGERS- <\/p>\n

<\/a> It\u2019s the first day of May \u2014 <\/strong>here are the key news triggers to keep your eyes on in this month:<\/p>\n