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ELITE Issue6: Apr.2019 Page | 5

EGX INDICES FEPS & UNICEF

MONTHLY ANALYSIS BOND

With a market cap of $953 billion dollars, the Egyptian stock
exchange (EGX for short) is considered to be one of the important

markets for investment in Egypt. In this article we are spotting the light

on a one month performance of EGX. In particular, we’ll be talking about
EGX 30 and EGX 50. What do these indices mean? EGX30 stands for the

top 30 companies in terms of liquidity and activity. The Index is weighted
by the adjuste d free floated market capitalization. EGX50 includes top 50

companies in terms of liquidity and activity. The index is designed to

balance the impact of price changes among the constituents of the index
as they will have a fixed weight of 2% at each quarterly review.

Mohamed Fawzi
nd
General overview Economics. 2 Level

FEPS & UNICEF Agreed on Producing High Quality Research

on Children and Adolescents

The Faculty of Economics and Political Science has recently signed a

cooperation agreement with the United Nations Child Fund-UNICEF Egypt.
The cooperation aims at developing evidence-based high quality research to

help formulate and implement better public policies in a number of
developmental fields; related to sustainable development and achieving multi-
Fig 1.1 Fig 1.2 dimensional equality for children in Egypt. The cooperation also targets
As we can see the general trend of both indicators over a year is heading for an increase but in a capacity building for promising researchers that are able to identify innovative
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decreasing rate until it reached its trough on the x-axis in the 9 of December 2018. It’s worth noting evidence-based policy solutions to improve the well-being of children and

that this trend does not mean that EGX is acquiring losses however it’s acquiring positive rates of adolescents in Egypt. The cooperation coincides with Egypt's endeavors to
change at much smaller rates than previous percentages in earlier months of 2018. achieve justice and social inclusion in its 2030 vision.

Feb\March Performance Within the framework of this cooperation, the end of February witnessed the Nadine Alaa

successful launch of the first research activity, in which FEPS’ faculty
members and students were invited to prepare research papers on “Child and Economics TA
Adolescent Wellbeing in Egypt". Research papers are to be presented in a
FEPS-UNICEF
conference that will be held in October, 2019.
TEAM
Prof. Mahmoud El-Said, Dean of the Faculty of Economics and Political
Science, delivered the opening speech in the presence of Prof. Omneia Helmy,
Vice Dean for Post-Graduate Studies and Research, Prof. Mona Esam Fayed,
Associate Professor at the Economics Department and the coordinator of the
cooperation agreement. UNICEF was represented by Dr. Luigi Peter Ragno,

Chief of the Social Policy (SPME), UNICEF and Ms. Marisa Foraci, UNICEF
Social Policy specialist. Many faculty members and students participated in
this event.

A number of the faculty members and senior students have recently sent their
Fig 2.1 Fig.2.2 research abstracts to be evaluated by a committee of Economic professors

from both FEPS and UNICEF. The authors of the eligible abstracts will go
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Both graphs show a decreasing trend until the line touches the x-axis at the 6 of March 2019 with a into a process of many specialized workshops to end up with a high quality
few fluctuations in both indices to reach a level of 14,643 for EGX30 and 2394 for EGX50. Let’s evidence-based research paper ready to be used in public policy making

understand then, why would a level decrease? This happens when at a certain time, too many shares of

a certain company are being sold and thus the supply of a share is high while the demand on it is low.
If we look on the macro or aggregated level, we can find that even more companies are witnessing this

occurrence and it resulted in a very small positive change in the percentage. However the question EXISTENTIAL! A poem
remains, why would shareholders sell their shares in the companies? Simple answer, the company
they’re investing in is not giving them satisfactory dividends; the company might be making losses, or

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their might be a better investment elsewhere and this is the actual reason of the decline in 6 of March
2019. Before I state the “better” investment, it’s good to link it with the general economic flow of

Egypt first. Can you feel it too? The slow death of your atoms? ..The burning out?

Things You Need To Know You're not a stranger,…Not for now.

: Back in 2016, Egypt has requested a loan of US$12 billion from the International Monetary Maybe when you detach from that blackhole that sucked you in,
Fund(IMF) to be paid on basis of 6 imbursements. To my analysis, I don’t think Egypt is in great need

of that loan however, this act was one by the government to provide a green signal to the world that our And stop wondering what makes you "you"…You're not the only one who
credit rating is good. However, in order to receive our green passport or our desired loan, the IMF has hears them…I hear them too.
to support the Egyptian authorities in the structural reform to ensure that we will be able to repay back They whispered all the things you didn't want to hear and left you in despair.
the debt. We’ve heard about important reforms such as exchange rate flexibility, subsidy reform; and
spending more on health, education and infrastructures. Yet, the most important one was the But you forgot.
encouragement of investors to invest their money. The government is planning to do this by issuing It's a shame that you can neither stop time nor keep up with it….You know the
shares for 5 massive public companies. The companies are 1)Eastern company for smoke 2)Abo Qir for truth, it lies within you.
Fertilizers 3)Heliopolis for housing and development 4)Alexandria for Mineral Oil 5)Alexandria
container & Cargo handling company. It’s worth noting though that a recent decision was made and So close yet so far away…You just need to silence the voices,.Open up your
Alexandria for mineral oil has been excluded from the offerings program. mind,
And see.
Reason for decline :
You know why you're here….You just don't know what you know yet.
As we have previously mentioned, these companies are the biggest and most profit-making public firms The closer you get to the answer the more frantic your eyes get..Don't be so
in the Egyptian economy. Thus their offerings are such a very attractive investment to all types of investor. scared. REEM Mustafa
As far as I can see, the general decreasing trend of the indices in Figure 1.1 and 1.2 is because of the Political Science, 3 Level
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following reason. Ever since the Minister of Finance announced that the price estimation of the offered You cannot possibly live in two bodies…This is your home, stranger.
shares is calculated based on the average price offerings on the previous month, big investors (price-takers)
were trying hardly to decrease the indices’ value so that they will be able to buy the shares of the 4 You're young and you're old…You're a misfit toy in this crowded isle.
companies at a low price and thus doubling and tripling their profits. And in some strange way you belong here.
In my opinion, they’re winners because of two reasons. The first one is they’re buying very important
shares for a low price and second thing is that a company like Eastern Company is always profit-making ELITE HIGH BOARD: Prof. Dr. Mahmoud Elsaid
and thus there will always dividends to distribute for shareholders. Back to our main point, the first (Chairman)--Prof. Dr. Hanan Mohamed Ali (member)--
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company shares to be offered are Eastern Company’s on the 3 of March. Unlike what was expected, Prof.Dr. SamyElsayyed (member)--Prof. Dr. Mazen Hassan
declarations by the government state that that the price of Eastern’s share was not undervalued and (member)--RamyMagdy Ahmed (editor in chief)
17EGP/share is its normal price. Let’s have a look on figures 2.1 and 2.2. We can see EGX30 and EGX50
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declined exponentially until it touched the x-axis at the 6 of March. At that date, the final disclosure note Editorial Board: SilvanaSobhy--NahedTahaElzeiny--Mai
of the company was published and this is why we see the lowest trough at that date. We can see other Osama Soliman--Lina Hesham—Sara Naserldin --
troughs for the second time in both figures 2.1 and 2.2 however I wasn’t able to find a clear reason to it after NermineTawfik
looking at Egypt’s internal affairs at that date. On an international scale, I found that most of the This issue is dedicated to
international stock exchange markets, especially the New York stock exchange in Wall Street, faced a Editors (this issue): Esraa Yaacoub--Farah Ezzeldin--
sudden and exponential decline. The decline was due to Fedex announcing that it has incurred losses at that our praying victims in
date. It does sound a little bit reasonable since if we took a look back at the graphs we realize that the drop Christchurch, New Zealand Fareeda Khalifa--Abdelrahman ElHadidi--Aya Shaaban--
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was sudden between the 19 and 20 of March. The good news, though, is that this week ended with a Abdelrahman Osama--Maries Adel--Mayar Tarek--Amr
positive percentage change of 0.4%& Year to date of 13.4% for EGX30 and 0.57%& year to date of #HelloBrother Samy--Dina Ehab--Mohamed Fawzi
11.92% for EGX50. The trend seems to be rising again and I expect that it will improve more especially
after Fitch ratings raised Egypt’s score to B+! This will encourage foreign investors to put their money in
EGX.

ELITE Issue6: Apr.2019 Page | 5