Egypt, S.Arabia step up trade ties through coordination council talks    Egypt reviews progress on $200m World Bank-funded waste management hub    Egypt urges Israel to accept Gaza deal amid intensifying fighting    SCZONE showcases investment opportunities to eight Japanese companies    Egypt, ADIB explore strategic partnership in digital healthcare, investment    SCZONE, Tokyo Metropolitan Government sign MoU on green hydrogen cooperation    Egypt welcomes international efforts for peace in Ukraine    Al-Sisi, Macron reaffirm strategic partnership, coordinate on Gaza crisis    Contact Reports Strong 1H-2025 on Financing, Insurance Gains    Egypt, India's BDR Group in talks to establish biologics, cancer drug facility    AUC graduates first cohort of film industry business certificate    Egyptian pound down vs. US dollar at Monday's close – CBE    Egypt's FM, Palestinian PM visit Rafah crossing to review Gaza aid    Egypt prepares unified stance ahead of COP30 in Brazil    Egypt recovers collection of ancient artefacts from Netherlands    Egypt harvests 315,000 cubic metres of rainwater in Sinai as part of flash flood protection measures    Egypt, Namibia explore closer pharmaceutical cooperation    Fitch Ratings: ASEAN Islamic finance set to surpass $1t by 2026-end    Renowned Egyptian novelist Sonallah Ibrahim dies at 88    Egyptian, Ugandan Presidents open business forum to boost trade    Al-Sisi says any party thinking Egypt will neglect water rights is 'completely mistaken'    Egypt's Sisi warns against unilateral Nile measures, reaffirms Egypt's water security stance    Egypt's Sisi, Uganda's Museveni discuss boosting ties    Egypt, Huawei explore healthcare digital transformation cooperation    Egypt's Sisi, Sudan's Idris discuss strategic ties, stability    Egypt to inaugurate Grand Egyptian Museum on 1 November    Greco-Roman rock-cut tombs unearthed in Egypt's Aswan    Egypt reveals heritage e-training portal    Sisi launches new support initiative for families of war, terrorism victims    Egypt expands e-ticketing to 110 heritage sites, adds self-service kiosks at Saqqara    Palm Hills Squash Open debuts with 48 international stars, $250,000 prize pool    On Sport to broadcast Pan Arab Golf Championship for Juniors and Ladies in Egypt    Golf Festival in Cairo to mark Arab Golf Federation's 50th anniversary    Germany among EU's priciest labour markets – official data    Paris Olympic gold '24 medals hit record value    A minute of silence for Egyptian sports    Russia says it's in sync with US, China, Pakistan on Taliban    It's a bit frustrating to draw at home: Real Madrid keeper after Villarreal game    Shoukry reviews with Guterres Egypt's efforts to achieve SDGs, promote human rights    Sudan says countries must cooperate on vaccines    Johnson & Johnson: Second shot boosts antibodies and protection against COVID-19    Egypt to tax bloggers, YouTubers    Egypt's FM asserts importance of stability in Libya, holding elections as scheduled    We mustn't lose touch: Muller after Bayern win in Bundesliga    Egypt records 36 new deaths from Covid-19, highest since mid June    Egypt sells $3 bln US-dollar dominated eurobonds    Gamal Hanafy's ceramic exhibition at Gezira Arts Centre is a must go    Italian Institute Director Davide Scalmani presents activities of the Cairo Institute for ITALIANA.IT platform    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



HC Securities Executive expects further decline in stock prices
High volatility in markets does not foster a benign environment for IPOs, says Metwally
Published in Daily News Egypt on 09 - 02 - 2016

The Egyptian Exchange (EGX) has been suffering significant drops since the beginning of 2016. During the first month, the benchmark index EGX-30 declined 14.46% from 7,006 points to 5,992.7 points. The market capital also declined by 9% over January to EGP 391bn.
Daily News Egypt interviewed Deputy CEO at HC Securities and Investment Mohamed Metwally and discussed the current status of the Egyptian capital market and its forecasted future.
What are your predictions for the stock market's performance in light of global financial challenges?
We are likely to face a very challenging year in 2016 where the focus of investors will be a flight for safety, which means they will put their funds in fixed income US notes and bonds. We are currently witnessing a systemic exit from emerging markets equities driven by the slowdown in China and the collapse of oil prices, which prompted many investment houses to usher investors to exit.
The exit from Egypt's markets superseded the current exodus driven by its own domestic issues, but exogenous factors will continue to put downward pressure on domestic markets.
The few investment houses that blew the horns early this year will expedite the down slide in most emerging markets and will consequently push emerging markets equities into oversold territories. This is usually followed by the return of smart capital into the markets. I, therefore, anticipate some severe volatility in trading in 2016 but expect the year to end on a positive note. The more we see doom and gloom forecasts, the more likely markets will prove them wrong.
What is the biggest challenge the capital market in Egypt is facing?
The biggest challenges Egypt's equity markets are facing are the poor convertibility of the pound as a result of an exchange rate that does reflect equilibrium of supply and demand, the overhang of the ill-designed and highly unpopular taxes on capital gains, and the 12.5% to 13.5% risk and tax free rates offered by banks to investors.
How do you expect the deterioration of oil prices to continue to affect the stock market?
The collapse of oil prices will have a negative impact on the flow of capital from the Gulf to Egypt's local equity markets.
Will we see further decline in stock prices?
It is highly likely, yes, at least for the first half of the year, for the aforementioned reasons. I expect to see a turnaround in the market sometime in Q3 or Q4 of 2016.
We witnessed the initial public offering (IPO) of several companies in 2015. Do you expect the same for 2016 or will it be the year of acquisitions and mergers?
High volatility in the markets does not foster a benign environment for IPOs. Mergers and acquisitions will continue to be strong throughout 2016 because of the attractive opportunities for long term investors generated by the short term cloudy economic forecasts.


Clic here to read the story from its source.