EGX30 gains 1.19% as domestic retail buying drives a broad rebound, while overseas investors favour government debt over equities. Stronger turnover and a firmer pound support the recovery, but institutional selling persists.
CAIRO, Egyptian stocks rose on Monday despite non-Arab foreign investors selling EGP303 million in equities, while Arab and overseas investors purchased approximately $615 million in government securities. The contrasting flows highlighted stronger demand for sovereign debt than corporate shares as domestic buying lifted the benchmark EGX30 by 1.19% to 51,414.93 points, reversing Sunday’s decline.
Retail Buying Drives Broad Equity Recovery
The EGX70 small- and mid-cap index advanced 1.54% to 17,959.58 points, while the broader EGX100 gained 1.46% to 23,869.07. The Shariah-compliant EGX33 rose 1.71%, and the low-volatility EGX35-LV added 1.33%.
Market breadth strengthened, with 180 shares advancing against 53 declines and 20 unchanged.
The EGX30 traded between 50,827.90 and 51,433.14 points, closing just 18 points below its intraday high and recovering all of Sunday’s losses. Market capitalisation increased EGP48.7 billion to approximately EGP4.087 trillion.
Yet the rally remained heavily dependent on domestic retail demand.
According to Arab Finance, Egyptian investors purchased EGP347.8 million in equities net, while Arab investors sold EGP44.9 million and non-Arab foreigners sold EGP302.9 million.
Institutional investors collectively sold approximately EGP492 million net, compared with EGP257 million on Sunday, while individual investors recorded equivalent net purchases.
Equity turnover increased to EGP10.05 billion from approximately EGP8.3 billion on Sunday, although EnterpriseAM reported that Monday’s activity remained 9.4% below its 90-day average.
The recovery broadened across share prices and trading activity, but institutional selling intensified despite the market’s advance.
Overseas Investors Favour Debt as Pound Strengthens
The more significant capital-flow development emerged in government securities.
Arab and non-Arab foreign investors purchased approximately $614.7 million in Egyptian government debt on the secondary market, according to Egyptian Exchange data reported by Hapi Journal.
Non-Arab foreigners bought approximately $577.6 million in Treasury bills net, while Arab investors purchased $36.9 million. Foreign Treasury-bond purchases contributed a smaller amount.
These transactions explain the apparent contradiction between reports of substantial overseas purchases across the exchange and simultaneous foreign equity sales. Government securities attracted net buying while listed companies experienced foreign selling.
However, secondary-market purchases do not necessarily represent equivalent new foreign-currency inflows or establish that equity-sale proceeds were reinvested in government debt.
The Egyptian pound strengthened approximately 26 piastres against the dollar, with the Central Bank of Egypt reporting closing rates of EGP53.91 buying and EGP54.05 selling, reversing Sunday’s depreciation.
The currency recovery coincided with stronger demand for sovereign debt amid restrictive monetary conditions.
On October 29, the central bank raised interest rates by 100 basis points, taking overnight deposit and lending rates to 20% and 21%. It cited heightened inflation risks from geopolitical tensions, energy prices and tighter international financial conditions.
Elevated fixed-income returns continue to provide a competing investment opportunity, raising the return equities must offer to attract institutional capital.
Recovery Broadens, but Institutional Confidence Lags
Monday’s advance lifted the EGX30 approximately 6.2% above its November 2 close of 48,403.14 points, although the benchmark remained 2.7% below its October 21 level of 52,854.95.
The improvement in market breadth, turnover and currency performance suggests the recent correction has lost momentum. Nevertheless, institutional equity sales accelerated even as share prices recovered.
The decisive distinction is between renewed foreign demand for Egyptian financial assets and renewed institutional confidence in Egyptian companies.
The recovery has regained breadth and momentum, but the contrast between foreign debt purchases and equity sales exposes a persistent divide in investor appetite.
High sovereign yields remain attractive to portfolio investors, while institutional demand for listed companies has yet to demonstrate comparable strength.
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