Largest sovereign wealth fund reduces its holdings in Egyptian equities

Egypt Independent

31-01-2025

Investments by Norway's sovereign wealth fund in companies listed on the Egyptian stock exchange decreased during 2024, reaching $100.3 million in 11 companies by the end of the year, compared to $134.6 million in 13 companies during 2023.
According to data published on its website, the investment portfolio of the Norwegian Pension Fund, the largest sovereign wealth fund in the world, in the shares of 89 Arab companies, amounted to about $5 billion.
The UAE topped those countries, as the fund's investments in its companies amounted to about $3.06 billion in 42 companies by the end of last year, compared to 36 companies with investments of $2.17 billion in 2023.
Qatar came in second place, as its investment portfolio amounted to about $1.1 billion in 16 companies, compared to $1.2 billion in 17 companies during 2023.
In Kuwait, the fund invests about $730 million in 13 companies, compared to $688.7 million in the same number of companies during 2023.
Its investments in Morocco were limited to $21.5 million in 4 companies, compared to $14.8 million in the same number of companies.
The Norwegian sovereign wealth fund exited its investments in Bahrain and Tunisia during the past year, which amounted to about $28.6 million and $1.5 million, respectively, by the end of 2023.
Bassem Abu Ghoneima, finance expert, said that the decline in the fund's investments is due to the wave of foreign divestment from listed stocks on the stock exchange witnessed last year.
He explained that the net sales of foreigners in listed stocks on the stock exchange during 2024, according to data from the Egyptian Stock Exchange, amounted to 1.6 billion pounds, while net sales of Arabs recorded about 10 billion pounds.
Abu Ghoneima pointed out that the fluctuation of the exchange rate and the lack of clarity in the decision-making cycle were major reasons for the wave of selling shares by foreigners on the stock exchange during 2024.
In a related context, the stock exchange has completed the semi-annual periodic review of market indices, which will begin to be implemented starting next Sunday, the first trading session of February, while the Egyptian Stock Exchange indices witnessed a number of changes during the review period for February 2025.
The results of the semi-annual review resulted in the inclusion of 6 companies in the main index, namely: 'EIPICO,' 'Ibnsina Pharma,' 'Misr Aluminum,' 'Orascom Development – Egypt,' 'Rameda,' and 'Al Qalaa,' while the following were excluded: 'Ezz Steel,' 'El Sewedy Electric,' 'Faisal Islamic Bank,' 'BN Investments Holding,' and 'Misr El Gedida for Housing.'
The stock exchange management conducts two reviews each year for its indices, the first of which ends in January and is implemented on the first of February for the period from July 1 to December 31, and the second review ends at the end of July and is implemented at the beginning of August for the period from January 1 to June 30. The reviews monitor the change in the criteria and various determinants of companies according to the methodologies of each index, and the review includes excluding ineligible companies and including companies that meet the criteria.
The EGX 70 index for small and medium-sized companies (SMEs), which is equally weighted, saw the exclusion of 17 companies, of which 3 joined the main stock exchange index, compared to the joining of about 17 companies. As for the EGX 100 equally weighted index, it witnessed the exclusion of 14 companies in exchange for the joining of 14 other companies.
Abu Ghoneima, a capital market expert, called for the share price to be determined in the opening session according to the last trading price in the previous session, instead of being determined based on the weighted average.
He called for the abolition of relative weights from the index and the listing of companies with equal weights, to be more expressive of the market movement, and not to have about 5 shares dominate 75% of the relative weight of the main index.
About 17 stocks joined the index, such as 'Oden', 'Extracted Oils', 'BN Investments Holding', 'United Bank', 'Cleopatra Hospital', 'Elico', 'Sinai Cement', 'Cairo Housing', 'Cairo for Investment', 'Qatar National Bank', 'International Fertilizers', 'Al-Ahly Development', 'Sharm Dreams', 'Kabo', 'Mansoura Poultry', and 'Misr El Gedida'.
The committee excluded each of: 'Arab Ceramics', 'EIPICO', 'Housing and Development Bank', 'Al Tawfiq Leasing', 'Arabia Investments', 'Orascom Development', 'Financial and Industrial', 'Al Qalaa Holding', 'Egyptians for Investment', 'Misr Aluminum', 'Gadwa Industrial', 'Digitize', 'Ibnsina Pharma', 'Rameda', 'Al Nasr for Civil Works', 'Giza General Contracting', and 'I Capital'.