The stock market has witnessed a year full of ups and downs, reflecting political events and social unrest. While the overall performance of the 2012 market was relatively better than 2011, it remained a difficult year for traders and investors. The stock market's benchmark index EGX30 closed 2011 at 3622 and 2012 above 5400, achieving approximately a 50 per cent gain. This gain came with constant fluctuations that resulted from political events that unfolded throughout the year. 2012 started with an uptrend nurtured by the parliamentary elections that started December 2011. On 7 March, the People's Assembly and Shura Council held their first joint session following the first democratic parliamentary elections after the 25th of January Revolution. In the same week, the index hit the 5.452 level, an eight-month high. EGX70, the index that tracks the performance of the 70 most active companies excluding the constituent companies of EGX30, also witnessed growth; it reached 531 points in the same week. The broader index that encompasses the two aforementioned indices, EGX100, scored 885 points. EGX30 maintained at this level until the second week of April when the Administrative Court suspended the 100 member constituent assembly, appointed by the newly elected parliament and tasked with drafting a new constitution. The index reacted to the court's decision by falling to 4.559 points. EXG70 and EGX100 followed suit and fell to 434 points and 751 points, respectively, the same week. The second half of June was charged with events including the parliament dissolution by the Supreme Council of Armed Forces (SCAF); the second round of voting in Egypt's first presidential elections since ousting former President Hosni Mubarak, and protests on Tahrir Square against the parliament dissolution and the interim constitutional declaration issued by SCAF that limited the powers of the to-be-elected president. The prevailing instability drove the index to a five-month low of 4031 points on 21 June, while EGX70 and EGX100 reached 373 points and 632 points, respectively, in the same time period. The stock market benefited from the relative stability that followed the election of President Mohamed Morsy . The stability coincided with the holy month of Ramadan, which saw little public upheaval causing the indices to rise to their highest level in 2012. On 26 September EGX 30 hit its 2012 highest score when it closed at 5969 points, followed by EGX70 with 574 points and EGX100 with 714 points. The most detrimental decision for the market in 2012 was Morsy's constitutional declaration issued on 22 November granting himself legal power that could not to be challenged by the judiciary. After a weekend of protests and clashes, the stock market opened on what was considered as the third single day drop since January 2011, losing almost EGP 30bn of total market capitalisation. On what was called “Black Sunday," EGX30 fell by almost 10 per cent, compelling the stock market's authority to suspend transactions for thirty minutes. Apart from the index's daily fluctuations, the year was marked by some important events; under the slogan “Unleashing Africa's Investment Potential," the African Stock Exchange Association (ASEA) held its 16th annual general assembly and flagship conference in Cairo. During the conference, Sunil Benimadhu, the president of ASEA, announced the launch of an ASEA Pan African Index based on the FTSE methodology, an index that combines the listed companies in the association's member countries. The year also witnessed an agreement with Istanbul's stock market authority to link it with the Egyptian one, expecting to be finalised in 2013, allowing investors from both countries to watch and invest in the two markets. Stock market analysts resounded in unison calling 2012 a difficult year for the Egyptian stock market. The recently resigned chairman of Arab Finance Brokerage, Osama Mourad, saw 2012 as the hardest year for the stock exchange as a result of political and economic turbulences. Mourad explains that in the first half of 2012, the Egyptian stock market was the best performing worldwide, taking into consideration the major disturbance that took place in 2011, but things went wrong soon after. He expected that if we don't change our ways, nothing will change. To Mourad, the only way forward is by working together. He continued saying that if there's one faction that insists to run the country single handedly, things will remain as they are or worse, even if they are right. He said it is better that all parties work together after the referendum and all Egyptians unite together for the best interest of Egypt. Mourad refused to comment about the performance of the stock market authority that is likely linked to his resignation. Hisham Tawfik, chairman of Arabia Online Brokerage, said that the performance of the stock market in 2012 was a miracle; it rose by approximately 50 per cent during the year despite the political events. The relatively good revenue that the bourse achieved doesn't reflect the bad economic situation, according to Tawfik. In regard to the market's future, he said it is like waking up in a fuzzy day and not being able to see, adding that political reconciliation is an important factor of the economic performance. Tawfik said that EGX's authority handled the crisis efficiently despite what little power it had, unlike the Egyptian Financial Supervisory Authority (EFSA) whose performance raised questions. According to EGX Chairman Mohamed Omran, a new version of depository and registry rules will be issued by the beginning of 2013. The modified regulations will follow economic trends in Egypt and will simplify the procedures while protecting the investors, Omran said The EGX head expected that the pre-trading sessions, will be activated before the end of the year. However, no developments were announced yet. As the year ends, the stock market has stabilised around 5300-5400 points, leaving many important questions about 2013: will the new constitution bring stability, will the 25th of January celebration go by in peace, and will all of this reflect on the stock market and the Egypt's current economic situation.
