Ahmed Kamel – Egypt Daily News
Egypt’s benchmark stock index extended its decline on Monday, October 26, closing down 1.66% at 48,416.94 points amid heavy net selling by foreign investors. The broader market moved unevenly: the EGX100 fell 0.24% to 21,014.87, while the small- and mid-cap EGX70 rose 0.23% to 15,317.12.
Mustafa Shafie, head of research at Osool Holding, attributed the main index’s fall to foreign investors’ withdrawals, including sales by both institutions and individuals. Egyptian investors were net buyers of shares, with reported net purchases of 37.714 billion Egyptian pounds, while Arab investors recorded net buying of 922 million pounds. Foreign investors were net sellers, with net sales reported at 38.636 billion pounds.
The selling extended beyond listed shares. Foreign investors recorded net sales of 39.1 billion pounds in local debt instruments, particularly treasury bills, equivalent to about $695.4 million. Egyptian investors bought 38.1 billion pounds’ worth of treasury bills, or about $678.5 million, while Arab investors purchased 952 million pounds, equivalent to $16.9 million. Foreign investors, however, bought government bonds worth 1.14 billion pounds, or about $20.3 million.
The figures point to pressure across several Egyptian investment markets, although activity differed by instrument: foreign investors sold shares and treasury bills but purchased government bonds. The day’s equity performance also varied by company size, with the main index declining more sharply than the EGX100, while the EGX70 ended slightly higher.
The market decline comes amid wider concerns about investor confidence, currency pressure and the cost of imports. Economist Hany Genena has warned that economic activity could slow across multiple sectors in the final quarter of 2026 and the first quarter of 2027. He said businesses were facing cost pressures, including higher prices for imported materials, and suggested that Egypt could experience a mild recession.
Genena has argued that the slowdown may extend beyond real estate to sectors such as electricity, cars and furniture. Higher oil prices and more expensive imported inputs, he said, could increase production costs and squeeze company profit margins. He estimated that the value of Egypt’s imports could rise by between $10 billion and $15 billion compared with the previous year.
Those projections are the economist’s assessment, not a confirmed forecast from the Egyptian government. Genena said the pressure on companies could coincide with a later stabilization in the exchange rate and a recovery in growth. He also argued that tight monetary policy might limit the pass-through of higher costs into broader inflation, but at the expense of economic activity in the near term.
Genena has also cautioned individual investors against making hurried decisions during sharp market moves. He said a fall in market capitalization represents a decline in the assessed value of listed shares, rather than money disappearing from the economy. He described the volatility as a reason for investors to examine companies carefully and avoid following speculative swings.
For investors seeking lower exposure to market volatility, Genena pointed to cash and lower-risk instruments, including money-market and fixed-income funds and certificates of deposit. He also recommended keeping some exposure to gold as part of a diversified portfolio. He said gold could benefit next year from continued Chinese purchases and the possibility that the United States would resume cutting interest rates. These were his views, rather than guarantees about future returns.
On the Egyptian pound, Genena linked recent dollar pressure to higher oil and import costs, as well as demand to build strategic stocks of goods. He said the exchange rate’s direction would depend in part on whether the Central Bank of Egypt maintained tight monetary policy. In his view, injecting liquidity to ease pressure on businesses and traders could intensify pressure on the pound and feed inflation.
Genena nevertheless characterized the dollar’s rise as temporary and said he believed the pound was undervalued by about 10%. He expected currency conditions to stabilize as the current pressures eased. That outlook contrasts with the immediate caution reflected in foreign investors’ selling activity and the stock market’s continuing weakness.
Monday’s closing figures show a market under pressure, but not a uniform retreat across all indices or financial instruments. The EGX30 and EGX100 fell, while the EGX70 posted a modest gain; foreign investors sold shares and treasury bills but bought government bonds. The diverging flows underline the uncertainty facing Egypt’s financial markets as investors weigh currency risks, import costs and the outlook for economic growth.
