Banque du Caire closes almost flat after a volatile debut as 185 shares decline, market value falls EGP65bn and euro borrowing costs rise.
CAIRO, Egypt’s stock market extended its correction on Monday despite the landmark EGP36.37 billion listing of Banque du Caire, as selling broadened across smaller companies and sovereign euro borrowing costs increased. The benchmark EGX30 fell 0.70% to 48,403 points, while the EGX70 lost 2.23%, exposing a widening divide between demand for selected Egyptian assets and confidence in the broader equity market.
Bank Debut Reveals a Divided Market
Banque du Caire’s shares surged to EGP5.68, more than 7% above their EGP5.30 offering price, before falling to EGP5.25 and closing at EGP5.31, a marginal gain of 0.19%.
Approximately 373 million shares changed hands, generating EGP2.02 billion in turnover, or one-fifth of Monday’s equity trading value.
The offering, representing 45% of the bank’s capital, valued it at approximately EGP80.8 billion. However, Chief Executive Hussein Abaza told Economy Plus that the entire EGP36.37 billion in proceeds would go to Banque Misr, the selling shareholder, rather than directly increasing Banque du Caire’s capital.
Abaza separately told Asharq Bloomberg that the bank targets EGP18 billion in 2026 profits, up 11.8% from EGP16.1 billion last year. At the offering valuation, the bank trades at approximately five times 2025 earnings, falling to 4.5 times its 2026 target if achieved.
Randa Hamed, managing director of Okaz Asset Management, told EnterpriseAM that pricing the offering close to fair value left limited room for immediate appreciation.
The transaction therefore demonstrates strong demand for a selected banking asset, but its near-flat debut does not, by itself, establish broader market weakness.
Selling Broadens Despite Higher Turnover
Monday’s EGX30 decline followed Sunday’s 1.72% loss, leaving the benchmark approximately 8.4% below its October 21 closing level.
The index briefly reached 49,296 points before falling to 47,790 and recovering partially towards the close.
Smaller companies suffered disproportionately. The EGX70 dropped to 16,294 points and EGX100 lost 2.22% to 21,912, while 185 stocks declined against just 24 advances and 17 unchanged.
Market capitalisation fell approximately EGP65 billion to EGP3.832 trillion.
Equity turnover increased 39% to EGP10.03 billion, but Banque du Caire accounted for approximately 20% of that total. Excluding its debut, trading value was around EGP8 billion, only 11% above Sunday’s level and insufficient to prevent widespread losses.
The contrast was visible among leading shares: CIB gained 2.88% and Telecom Egypt rose 3.08%, while Mopco lost 6.1% and Abu Qir Fertilizers declined 4.7%.
Foreign Institutional Selling Persists
Foreign investors sold EGP138.2 million net in listed equities, while Egyptians bought EGP57.1 million and Arab investors purchased EGP81.1 million.
The institutional breakdown was more revealing. Foreign institutions sold approximately EGP140.2 million and Arab institutions EGP82.5 million, while Egyptian institutions bought EGP29.7 million net.
Individual investors helped absorb institutional selling, but their purchases failed to prevent the broader decline.
Pressure extended to government securities. Foreign investors sold approximately EGP2.29 billion net in Treasury bills in secondary-market trading, according to Egyptian Exchange data reported by local financial media. These transactions do not necessarily represent equivalent immediate foreign-currency outflows.
Euro Borrowing Costs Rise Despite Stronger Pound
The Central Bank of Egypt accepted €621.8 million in 364-day Treasury bills on Monday at a weighted average yield of 3.25%, compared with 2.25% at the previous comparable auction.
Investors submitted €721.8 million in bids, providing approximately 1.16 times coverage of the accepted amount.
The one-percentage-point increase raises Egypt’s euro refinancing cost, although it does not independently establish a deterioration in sovereign credit risk.
Meanwhile, the dollar declined to approximately EGP55.38 buying and EGP55.48 selling, strengthening the pound by about 0.6% from Sunday’s central-bank quotations.
The currency’s recovery contrasted with continued foreign portfolio selling.
The central bank’s October 29 interest-rate increase had already raised overnight deposit and lending rates to 20% and 21%. Recent pound Treasury-bill yields above 25% reinforce the competition facing equities while increasing financing costs for listed businesses.
Recovery Requires Broader Institutional Demand
Monday’s trading exposed a widening divide in Egypt’s capital market. Investors committed substantial capital to a major banking privatisation, yet 185 listed stocks declined, smaller companies suffered heavier losses and foreign selling continued across equities and government securities.
The EGX30’s next test is whether it can reclaim the 49,600–50,000-point area with stronger market breadth and sustained institutional purchases.
Egypt’s correction has moved beyond profit-taking into a broader test of liquidity, valuations and confidence. The success of Banque du Caire’s offering demonstrates demand for selected assets, but a durable recovery will require that appetite to spread across the exchange despite elevated sovereign borrowing yields.
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