Cairo bourse continue to shed heavy losses Monday worth 7.8 billion Egyptian pounds (US$996 million) as China’s market crash rippled through the markets
The market capitalisation has recorded 420.799 billion pounds during the closing session of Monday.
China’s Black Monday
Chinese stocks suffered Monday their worst single-day loss in more than eight years, shining an unwelcome spotlight on the country’s financial condition at a time when its leaders are putting on two big events meant to showcase China’s global standing.
The Chinese government media dubbed it “Black Monday,” a surprisingly bleak description to come from the People’s Daily, which normally tries to cushion bad news. The Shanghai Composite Index’s 8.5% loss was its biggest percentage decline since February 2007, leaving the market down 0.8% for the year and down 38% from its mid-June peak. At that point stocks were up 60% for the year, having doubled over the preceding 12 months.
“Compared with the selloff in June and July, when investors still harbored hope of government rescue measures, this time investors are completely despairing because the previous government stabilization measure have failed,” says Amy Lin, analyst at Capital Securities told the Wall Street Journal.
Emerging markets, once the world’s great economic hope, could see the good times end as Beijing falters, according to the Observer.
China sent markets into a spin this month after it revealed an 8.3% decline in exports in June. In an attempt to reverse the slump, Beijing began devaluing the yuan. The devaluation persisted for three days, raising investors’ anxiety levels. Could there be worse to come? The answer came last week, when a survey showed that in August, activity in China’s factories shrank at the fastest pace in almost six and a half years. Export demand had dwindled further, and domestic sales were not much better.
Global Stock Selloff
Britain’s FTSE 100 closed at 5,898, which is down 288.78 points on Friday’s close. In terms of GBP lost, this equates to £73.88 billion, according to Sky’s financial analyst, Guy Harding. And it means that the FTSE 100 has just posted its longest losing streak since 2003.
And the pan-Europan Stoxx 600 had its worse day since the end of 2008, according to Marketwatch. German and French stocks suffer worst day since 2011
The pan-European FTSeurofirst300 has provisionally closed down 5.4%, which is its lowest level this year.
That includes a 5% tumble on the German DAX, while France’s CAC shed 5.6% and Spain’s IBEX lost 5.7%.
The S&P 500 is down 5.2 per cent at 1,867.90, taking it down 12 per cent from its record high in May and deeper into correction territory, defined as a fall of 10 per cent from an index’s last peak. The Dow Jones Industrial Average is 6.5 per cent lower at 15.416.0. a loss of over 1,000 points.
“Investors in China have lost confidence in the central bank, and it’s a very alarming and difficult situation for the markets,” said Bruce Bittles, chief investment strategist at Milwaukee-based Robert W. Baird & Co., which oversees $110 billion. “It ultimately depends on whether the China situation results in a severe economic slowdown. It that happens, it’s going to ripple through the U.S.”
Egypt Indices
Back to indices in Egypt where President Abdel Fattah al-Sisi issued a decree lowering the top tax rate on companies and individuals from 25 percent to 22.5 percent. The decree also suspended a 10 percent capital gains tax for two years as of August 2015.
The highest income bracket to which the new 22.5 percent rate will apply went down from 250,000 Egyptian pounds ($31,948.88) to 200,000, the decree said.
Egypt’s benchmark index, EGX30 plunged 1.92 percent to 6654.06 points lowest levels in almost two years.
The newly-launched EGX50 EWI index sank 4.45 percent to 1150.86 points.
EGX20 also dived 3.71 percent to 432.8 points.
In addition, the mid- and small-cap index EGX70 retreated 5.17 percent to 365.48 points. The price index, EGX100 pushed down 3.82 percent to 794.05 points.
Turnovers lower again
On Monday, the bourse’s trading volume has reached 216.219 million securities, with turnovers closed at 578.203 million Egyptian pounds, exchanged 24,108 thousand transactions.
Also during the closing session, 178 listed securities have been traded in; 133 declined, 11 advanced; while 30 kept their previous levels.
Investors’ Activities
Local investors were net sellers Monday seizing 78.74 percent of the total market, with a net equity of 45.488 million pounds, excluding the deals.
On the contrary, the non-Arab foreign and Arab investors were net buyers capturing 15.43 percent and 5.83 percent, respectively of the total markets, with a net equity of 39.348 million and 6.139 million pounds, respectively, excluding the deals.
