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USD CBE auction (Tuesday, 18 Oct): 8.78 (unchanged since 16 March 2016)
USD parallel market (Tuesday, 18 Oct): 15.50 (from 15.40 on Sunday morning, 16 Oct, Reuters)

EGX30 (Tuesday): 8,213.53 (-0.36%)
Turnover: EGP 578.83 mn (85% above the 90-day average)
EGX 30 year-to-date: +17.23%

THE MARKET ON TUESDAY: EGX30 closed 0.4% down. Today’s top gainers were Orascom Construction, Elsewedy Electric, EFG Hermes. On the flip side, today’s worst performers were Egyptian Iron and Steel, Edita, and Egyptian Resorts. The market turnover was EGP 578.8 mn, and local investors were the sole net buyers.

Foreigners: Net short | EGP -80.4 mn
Regional: Net short | EGP -3.3 mn
Domestic: Net long | EGP +83.7 mn

Retail: 38.5% of total trades | 37.6% of buyers | 39.4% of sellers
Institutions: 61.5% of total trades | 62.4% of buyers | 60.6% of sellers

Foreign: 22.0% of total | 17.0% of buyers | 27.0% of sellers
Regional: 15.0% of total | 14.8% of buyers | 15.1% of sellers
Domestic: 63.0% of total | 68.2% of buyers | 57.9% of sellers

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PHAROS VIEW

Why Devaluation is Not Going to Solve it All

While the IMF board is getting ready to discuss the USD12 billion loan package, Egypt is also getting ready to devalue its currency and cut energy subsidies. Although investors have been longing for such a shift in monetary policy, we examine below the repercussions of switching to a more flexible exchange rate regime on the external sector, and whether it would be the magic solution to Egypt’s tight external position. Highlights of the note by Pharos’ Ramy Oraby and Radwa El Swaify include:

• External sector pressure to persist, pulling EGP further down in FY2017
• Non-petroleum exports of goods: High inflation to negate benefits from local currency weakness
• Remittances are highly affected by oil price as much as it is by the confidence in the Egyptian banking system
• Suez Canal revenues are negatively affected by global trade rather than the value of the currency
• Foreign direct investment is a key winner of floatation, but needs elimination of capital controls

Tap or click here to read the full note (pdf).

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WTI: USD 50.76 (+0.93%)
Brent: USD 52.14 (+0.89%)
Natural Gas (Nymex, futures prices) USD 3.24 MMBtu, (-0.61%, November 2016 contract)
Gold: USD 1,263.50 / troy ounce (+0.05%)

TASI: 5,460.9 (-1.9%) (YTD: +5.3%)
ADX: 4,269.3 (+1.2%) (YTD: -0.9%)
DFM: 3,318.0 (+1.4%) (YTD: +5.3%)
KSE Weighted Index: 343.1 (0.0%) (YTD: -10.1%)
QE: 10,484.1 (+0.6%) (YTD: +0.5%)
MSM: 5,583.6 (0.0%) (YTD: +3.3%)
BB: 1,137.0 (0.0%) (YTD: -6.5%)