CAIRO, October 29 — Egyptian stocks surrendered nearly half Tuesday’s rebound as the benchmark EGX30 fell 1.64% to 49,281.24 points on Wednesday, October 28, even as investors placed orders for more than 27 times the shares available in Banque du Caire’s public offering. Foreign and Arab investors also sold a net $391mn of government securities, exposing a widening divide between strong demand for a selected bank flotation and continued selling across existing financial assets.
Rebound Falters as Institutions Sell
EGX30 lost 823.59 points, reversing almost half Tuesday’s 1,687.89-point gain and closing approximately 6.8% below its October 21 level.
The benchmark briefly reached 50,328.98 points before retreating to 49,281.24, its session low. The reversal of more than 1,047 points highlighted the failure of early buying to sustain the recovery.
Smaller shares proved more resilient. EGX70 slipped 0.35% to 16,327.27 points, while EGX100 declined 0.59% to 22,137.90.
Market breadth deteriorated sharply. According to closing figures reported by Youm7, 82 shares advanced against 126 decliners and 14 unchanged, compared with Tuesday’s 207 gainers and eight losers.
Equity turnover contracted approximately 19% to EGP6.6bn, while market capitalisation fell EGP27bn to EGP3.859tn. Nevertheless, roughly EGP128bn of Tuesday’s EGP155bn recovery remained intact.
The correction has therefore become less indiscriminate than Sunday’s collapse, but Wednesday’s decline demonstrated that the rebound still lacks sustained buying support.
Investor flows reinforced that assessment.
Egyptian investors purchased EGP202.9mn net in equities, while foreign investors sold EGP173.1mn and Arab investors EGP29.8mn.
The equity-only breakdown reported by Youm7 showed Egyptian individuals purchasing EGP315.6mn net, against EGP112.8mn in Egyptian institutional sales. Foreign and Arab institutions sold another EGP229.1mn and EGP36.5mn, respectively.
Combined institutional net selling reached approximately EGP378.4mn, offset by individual investors across the three nationality groups.
Institutions accounted for 21.85% of trading activity. Their net selling was relatively modest against total turnover, but its persistence underlined the absence of broad institutional confirmation of Tuesday’s retail-led recovery.
Debt Selling Moderates, Pound Stabilises
Foreign and Arab investors sold a combined $391mn net in Egyptian government securities on Wednesday, according to Egyptian Exchange secondary-market data reported by Hapi as of 4 p.m.
The amount was lower than Tuesday’s $619.1mn, suggesting some moderation in selling pressure without establishing a reversal.
Foreign Treasury-bill sales accounted for $368.45mn, Arab bill sales for $17.49mn and foreign Treasury-bond sales for approximately $5.02mn.
These figures measure secondary-market transactions, not necessarily equivalent immediate transfers of foreign currency abroad.
The pound remained broadly stable, with reported Central Bank customer exchange-rate quotations around EGP56.06 buying and EGP56.20 selling per dollar.
Stability offered limited relief following October’s depreciation, which increased uncertainty over imported inflation and foreign investors’ dollar-denominated returns.
The combination of moderating debt sales and a steadier currency is encouraging, but neither yet establishes a sustained recovery in foreign portfolio confidence.
Banque du Caire Attracts Exceptional Demand
Banque du Caire’s public offering closed with preliminary orders for approximately 9.29bn shares against 343.125mn available, equivalent to 27.08 times subscription coverage, according to the Egyptian Exchange.
At the final price of EGP5.30 per share, those orders represented a notional EGP49.2bn in demand for approximately EGP1.82bn of public-tranche shares.
The EGP49.2bn figure represents shares requested, not confirmed new cash entering the market. Preliminary subscription orders remain subject to allocation and settlement.
The institutional placement was separately covered six times, rising to 19.8 times excluding previously committed qualified-investor allocations.
The enlarged 45% offering values the sale at approximately EGP36.4bn. Proceeds will accrue to Banque Misr, the selling shareholder, rather than directly increasing Banque du Caire’s capital.
Trading is scheduled to begin on November 2, subject to completion of regulatory procedures.
The offering demonstrates substantial appetite for selected Egyptian banking assets. Its greater test will come after listing, when investors can assess whether institutional and retail demand translates into sustained trading and valuations.
State Listings Face a Liquidity Test
Egypt is preparing further state-asset offerings as part of its divestment programme.
Hashem El-Sayed, chief executive of the State-Owned Companies Unit, told Asharq Bloomberg that the government aims to complete the listing and trading procedures for El Nasr Glass and Crystal and the railway-springs manufacturer YAYAT during December.
Additional offerings could broaden investment opportunities, but may also compete for liquidity unless accompanied by fresh capital inflows and stronger secondary-market participation.
Rate Decision Tests Market Confidence
The Central Bank of Egypt’s October 29 monetary-policy meeting comes amid competing signals.
Annual urban inflation eased to 13.9% in September from 14.5% in August, while core inflation declined to 14.1%, according to the Central Bank.
Yet renewed currency depreciation threatens imported inflation, complicating the outlook for monetary easing.
Overnight deposit and lending rates remain at 19% and 20%, respectively, with the main-operation rate at 19.5%.
Restrictive interest rates support the relative appeal of Egyptian fixed-income investments but increase financing costs for businesses and compete with equities for capital.
Wednesday’s trading exposed a divide in investor appetite rather than a uniform loss of confidence. Institutions continued selling listed equities, sovereign-debt withdrawals moderated but persisted, and Banque du Caire attracted exceptional demand.
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