Egypt’s EGX30 share index climbs 3.8% in early trade

Egypt's EGX30 share index climbs 3.8% in early trade

Egypt’s EGX30 share index climbed by as much as 3.8% on Sunday after the central bank cut key interest rates for the second month in a row and anti-government protest failed to gather momentum.

Local financial institutions were net purchasers and helped push the index higher for a third straight session.

The central bank cut interest rates by 100 basis points, with overnight deposit rates lowered to 13.25% and lending rates easing to 14.25%.

The stock exchange suspended trading on around 70 shares for 10 minutes after they climbed by more than 5% during the first half hour of trading. The index was 3.3% higher as of 1025 GMT.

Mohamed Farid, the bourse’s chairman, said on Thursday that recent share losses were not justified, after they had plunged following protests against President Abdel Fattah al-Sisi.

“The market responded to the rates cut and the passing of Friday safely … we returned to logic again,” Ibrahim El Nemr, analyst at Naeem Brokerage said.

Egyptian police dispersed a protest in Cairo on Friday, but a huge show of force by security forces prevented protests in central Cairo and other cities.

Activists had called for the demonstrations against Sisi after protests broke out the previous week. A large pro-Sisi rally was also held in the capital on Friday.

“The market is recovering what it lost unjustifiably last week … along with the rate cuts which gave investors a positive message about the market’s performance over the coming period,” said Radwa El-Swaify, head of research at Pharos Securities Brokerage.