Stock market slumps to 15-month low

Egypt’s benchmark EGX30 index fell to 7550.98 points Wednesday, the lowest level recorded since April 2014. 

The index opened the month of July above 8,300, but has dropped every day of trading since. This week has seen a particularly steep decline, with the index falling by more than 9 percent since Sunday. Year-to-date, the index is down by more than 15 percent.

Egypt’s other indices, the EGX100, EGX30 and EGX20, are also down.

Experts attribute the market’s decline to both local and international factors.

On the domestic side, local investors have responded negatively to a new regulation announced on June 29 that requires investors who buy Global Depository Receipts (GDRs) — a financial instrument that allows Egyptians to invest in foreign companies via international banks — to receive returns in Egyptian pounds. The move closed a backdoor that reportedly allowed Egyptian investors to get around currency controls by purchasing GDRs in pounds and selling them for dollars.

A wave of violence, including deadly attacks in Sinai and the assassination of Prosecutor General Hesham Barakat, has also depressed investor sentiment.

The market has also been sensitive to global trends, experts say, particularly the ongoing debt crisis in Greece. An anticipated deal to lift international sanctions on Iran could also see more Iranian oil on the market, which could push global commodity prices down.