EGX70 gains 9.6% over the week as broader market outpaces blue chips, while non-Arab foreign investors finish Thursday as net sellers
CAIRO — Egyptian equities ended the week mostly higher on Thursday, with the benchmark virtually unchanged but small- and mid-cap shares resuming their advance, capping a week in which broader-market indices significantly outperformed the EGX30.
The EGX30 edged up 0.03% to 54,676.86 points, its third consecutive positive session. The EGX33 Shariah Index added 0.08% to 6,331.46 points, while the lower-volatility EGX35-LV slipped 0.18% to 6,678.41 points.
The stronger performance again came from smaller companies. The EGX70 Equal Weight Index gained 1.14% to 19,990.69 points, leaving it just below the 20,000 threshold, while the broader EGX100 Equal Weight Index advanced 0.94% to 26,106.42 points.
Market capitalisation increased by approximately EGP11.2bn during Thursday’s session to EGP 4.104 tn, while listed-equity turnover reached about EGP14bn, remaining elevated after several sessions of strong trading activity.
The session reinforced the week’s central market theme: the benchmark remained positive, but the bulk of the advance occurred outside the EGX30.
EGX70 Gained Almost 10% in a Week
The scale of the divergence becomes clearer over the full trading week.
Between the close on July 30 and August 6, the EGX30 gained approximately 2.3%. Over the same period, the EGX70 surged about 9.6%, while the EGX100 rose approximately 8.6%. The EGX33 gained about 5.3%, and the EGX35-LV advanced roughly 5.8%.
Market capitalization increased by almost EGP167bn, or about 4.2%, from EGP3.937 tn to EGP4.104tn.
The performance shows that the week’s rally was substantially broader than the headline benchmark suggests. Equal-weighted indices, which reduce the influence of the exchange’s largest companies, rose several times faster than the EGX30.
Wednesday briefly interrupted the pattern, with the EGX70 declining 0.16% as larger and lower-volatility shares advanced. Thursday’s 1.14% rebound suggests that the move represented a pause rather than the beginning of a broader small-cap reversal.
The speed of the gains nevertheless warrants attention. Repeated daily-limit movements among individual companies have accompanied the broader advance, increasing the market’s sensitivity to short-term profit-taking.
A broader contribution from liquid large-cap companies would reduce the rally’s dependence on the sharp price moves seen among smaller stocks.
Domestic and Arab Buying Offsets Foreign Selling
Egyptian Exchange nationality statistics showed Egyptian investors as net buyers of approximately EGP117mn on Thursday and Arab investors as net buyers of about EGP308mn.
Non-Arab foreign investors were net sellers of approximately EGP425mn.
The figures reinforce the importance of domestic and regional liquidity in supporting the market. They also contrast with the broader July picture, when non-Arab foreign investors returned to net buying in listed Egyptian equities after selling during the second quarter.
One session of foreign selling does not reverse that improvement. But sustained overseas participation remains important if the recent advance is to develop from a predominantly domestically supported rally into one with deeper institutional participation.
Foreign investors also have an important competing asset class in Egyptian government debt. High domestic sovereign yields mean international demand for Egyptian assets does not necessarily translate directly into equity-market inflows.
Glaxo Volatility Highlights Momentum Risk
GlaxoSmithKline Egypt rebounded by the 20% daily limit to EGP397.72 after falling 20% on Wednesday, extending a period of unusually sharp price swings.
The company has said it is unaware of undisclosed material developments that would explain the scale of the share-price movement, making the stock a particularly visible example of the short-term momentum affecting parts of the market.
Other strong performers included Semad Misr — EGYFERT, which gained 16.06%, and El-Nile Co. for Pharmaceuticals and Chemical Industries, up 14.39%.
The largest decliners included Catalyst Partners Middle East, down 4.73%, El Ahram Co. for Printing and Packing, down 4.72%, and Egyptian Iron & Steel, which fell 3.60%.
The distribution of gains and losses points to an increasingly stock-specific market. Healthcare shares have featured prominently among recent movers, but sharp reversals within the sector make it difficult to characterise the activity as a uniform re-rating.
Tax Regime Passes an Early Liquidity Test
The rally has also provided an early test of Egypt’s revised securities-tax regime, which replaced the proposed capital-gains tax on listed shares with a proportional stamp duty.
Turnover has remained elevated since implementation, suggesting that the change has not produced an immediate liquidity shock. Several weeks of trading will nevertheless be required before assessing its longer-term effect, particularly on investors with high portfolio turnover.
The broader reform agenda extends beyond taxation. Regulators are preparing a revised securities-lending and short-selling framework, while policymakers are seeking additional state and private-sector listings and a larger institutional investor base.
These measures are intended to improve price discovery, expand the investable universe and deepen liquidity. Their significance will increasingly depend on whether higher trading activity can be converted into sustained institutional participation.
Weekly Rally Raises the Earnings Test
The EGX ended the week in a considerably stronger position than the EGX30 alone would suggest.
The benchmark’s 2.3% weekly gain was overshadowed by the EGX70’s 9.6% advance and the EGX100’s 8.6% rise, while market capitalization increased by almost EGP167bn.
The breadth extends the rally beyond the benchmark, but the pace of the move—particularly among smaller companies—also increases the market’s exposure to sharper profit-taking. Glaxo’s consecutive 20% decline and rebound provide an unusually clear illustration of how quickly short-term momentum can reverse.
Corporate results now provide the next test. Second-quarter earnings will indicate whether recent share-price gains are being accompanied by sufficient growth in profits, while foreign participation will show whether the rally is attracting longer-term institutional capital alongside domestic liquidity.
Progress on new listings, securities lending and short selling could provide a stronger structural foundation by expanding the range of liquid securities and trading strategies available to investors.
For now, the EGX enters the new week with momentum intact. But after a near-10% weekly rise in the EGX70, the balance between earnings, liquidity and share prices is likely to matter more than the direction of the headline index alone.
Related news:
Saudi Arabia Approves Rules for Foreign Property Ownership
Egypt Opens Philippine Market to Five Agricultural Exports
Read also:
Foreign Buying Gives Way to Domestic Buying as (EGX) Ends Week Higher
Gulf Investors Eye Stake in Egypt’s $150m Arab API Pharmaceutical Ingredients Project
