EGX30" يفقد قمته التاريخية ومصر تخفض سعر صرف الجنيه للمرة الرابعة خلال عامين
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00:00 We are talking about the movements in the Egyptian markets.
00:05 Mr. Eissa Fathi, a member of Cairo's financial paper company, joins us.
00:10 Welcome, Mr. Eissa, and thank you for being here.
00:14 We are losing 900 points today, the liquidity is very high.
00:19 How much do we expect to see a big withdrawal of liquidity
00:23 and the accounts that are now 30%?
00:30 First of all, my greetings to you all.
00:38 Ramadan is approaching.
00:40 May God's mercy be upon you and the Muslim Ummah.
00:44 What happened today may seem dramatic,
00:50 but it was expected to happen.
00:53 I am trying to remember the word "surprise"
00:56 because we were expecting this to happen a while ago.
00:59 It was always a matter of when.
01:02 I think the government used the shock method
01:06 that was used on November 3, 2016.
01:09 The intervention was also well-planned.
01:12 It was a compensation plus a high interest rate.
01:16 At that time, the interest rate reached 20%,
01:19 which was less than 15%.
01:23 The exchange rate rose from 8 pounds to 16 GD.
01:27 After that, the exchange rate was restricted
01:31 until we reached 15.70,
01:35 which was when the coronavirus outbreak began.
01:41 The situation began to move in the negative direction
01:45 that we have been suffering from in the past.
01:48 When the situation hit the stock market,
01:51 there were two things that were the opposite of each other.
01:54 The high interest rate was expected to lead to the market crash.
01:58 But the exchange rate was the one that was left to the exchange rates.
02:05 At first, the interest rate was used by the banking sector.
02:11 The companies that issued the exchange rate
02:15 were considered to be using the new currency
02:20 or the new dollar prices for their selling contracts.
02:26 When investors saw the market move,
02:33 and we were making 4% and the CIP was above 80%,
02:37 and the yield was 116%,
02:40 there was a push in the direction of the T+0 process.
02:46 People were ready to take a risk.
02:51 But it was clear that there was a short selling.
02:56 There was a hit in the stocks,
02:58 which led to the T+0 process having to end today.
03:03 So the hit happened.
03:05 We moved from a 4% rise in 30% to a 3% decline.
03:09 We lost about 7%.
03:11 The same thing happened in 30%.
03:13 At first, the market was red,
03:15 but it turned green during the session,
03:17 and then it returned to a 3% decline at the end of the session.
03:21 So we can say that there were some bad stock market trends
03:27 that led to this.
03:29 This is what explains the size of the exchange rate,
03:32 which is considered to be the largest,
03:34 even if it happens again with a trading volume of more than 9 billion.
03:40 But I imagine that the exchange rate in this way
03:46 is around what the government aims to reach,
03:52 to be around 50% or less in the coming period.
03:57 Will this decline continue for a long time, Mr. Issa?
04:01 Will we see a complete decline or a disappearance
04:05 of the exchange rate in the equity market,
04:08 or the decline of the equity market after this decision?
04:11 I think that all the surrounding conditions say
04:17 that the exchange rate in Egypt will be unified
04:20 under the dollar pressure that has come recently
04:24 and is expected to come from the IMF.
04:27 In addition, this high interest rate will also
04:31 limit the exchange rate to the dollar or dollar,
04:36 and therefore, those who have something to keep
04:40 until things change and the market opens in the coming period
04:44 will start to see another rise.
04:47 The important thing is that the state continues to have policies
04:51 that adjust things and do not suffice with what has been done today.
04:55 The economic structure must be reconsidered,
04:58 and the general spending must be reconsidered
05:02 and its priorities arranged so that there is no further pressure
05:06 on the currency through projects that have been proven
05:10 in the past period that they are not profitable,
05:13 not in the dollar or even in the local currency.
05:16 Therefore, the issue must not be taken as if we have dollars now,
05:20 and then in the coming period, if this is done,
05:23 it will be a problem.
05:25 In addition, on the level of the war in Gaza,
05:28 a lot of effort must be made to stop that,
05:31 because this will affect the passage of the Suez Canal
05:35 and will bring things back to normal.
05:38 What is the value of the exchange rate in your opinion
05:41 that we will reach now after this gap has been reduced?
05:46 And today, to what extent can we see the continuation
05:49 of the pressure on the real estate sector,
05:52 which has fallen in the market in a greater way, Mr. Issa?
05:55 Look, I agree with what Mr. Issam Izz Al-Arab said
06:02 about the fair value in the exchange market,
06:05 because the market is what determines it.
06:08 It is not the share that determines the conditions of buying and selling,
06:12 and the expenses and cash flow.
06:15 As long as there is a greater supply than the demand,
06:19 or an equal supply, the price will remain stable.
06:23 On the contrary, it is true that if the demand
06:26 exceeds the supply, the price will rise.
06:29 Therefore, how does the central bank manage the issue?
06:33 I think it will leave the banks the freedom to move.
06:37 We will find that each bank buys at a different price
06:40 than the other, depending on the requirements it has.
06:43 The bank that has equal requirements for the currency it has
06:46 will stabilize its price, and the bank that has the opposite,
06:49 which has more demand than supply, will raise its price.
06:52 The opposite is true.
06:55 So the whole story is related to the supply and demand
06:58 that are submitted to the banks.
07:01 Yes, the issue of the cash box and the payments
07:04 that will be submitted to the government
07:07 will remain a decisive matter after this decision.
07:10 We thank you, Mr. Issa Fathi Al-Oudh Al-Muntadab
07:13 for joining us from Cairo.
07:16 from Cairo.