Egyptian Stock Market Research Articles

The effect of financial flexibility on profitability and sustainable growth rate in the Corona pandemic era: Evidence from Egyptian stock market

The effect of financial flexibility on profitability and sustainable growth rate in the Corona pandemic era: Evidence from Egyptian stock market

Stagflation reflections on Egyptian stock market

Stagflation reflections on Egyptian stock market

The Moderating Role of ESG Disclosure on the Relationship between Herding Behaviour and Market Capitalization in the Egyptian Stock Market

The Moderating Role of ESG Disclosure on the Relationship between Herding Behaviour and Market Capitalization in the Egyptian Stock Market

Cryptocurrency volatility and Egyptian stock market indexes: A note

Cryptocurrency volatility and Egyptian stock market indexes: A note

The Effect of Managerial Ability on Firm Investment Decisions: Evidence from Egyptian Stock Market

The Effect of Managerial Ability on Firm Investment Decisions: Evidence from Egyptian Stock Market

How Oil Price Shocks Affect the Egyptian Stock Market Performance in the Context of Recent Challenges

How Oil Price Shocks Affect the Egyptian Stock Market Performance in the Context of Recent Challenges

Investor Loss Aversion and Stock Market Performance (An Empirical Study on the Egyptian Stock Market)

Investor Loss Aversion and Stock Market Performance (An Empirical Study on the Egyptian Stock Market)

The reaction of the Egyptian stock market to recurring devaluations: an event study approach

PurposeThis paper examines the reaction of the Egyptian stock market to two substantial devaluations of the Egyptian pound (EGP) in 2022 and tests the informational efficiency of the Egyptian market.Design/methodology/approachThe paper uses the event study framework to analyze the significance and direction of abnormal returns of the leading index of the Egyptian stock market (EGX30) on and around the devaluation days. It employs both the constant mean model and the market model to estimate the normal returns of the EGX30. Additionally, the paper uses data on two equity indices, one global and one for emerging markets, as benchmarks for normal returns.FindingsThe paper finds that the Egyptian stock market experienced significant positive abnormal returns on the devaluation days of the EGP in March and October of 2022, indicating a positive market reaction to the devaluation. Furthermore, evidence suggests that the Egyptian market may not be informationally efficient as significant positive abnormal returns were observed two weeks before and two weeks after the devaluation day, suggesting news leaks and delayed reactions, respectively.Originality/valueThis study is the first to examine the impact of the recent two devaluations of the EGP in 2022 on the Egyptian stock market. It complements existing literature by analyzing the immediate market reaction to two consecutive devaluations in an African country. Furthermore, the paper evaluates the efficiency of the Egyptian market in processing information related to exchange rates.

Crude Oil Prices and the Egyptian Economy Evidence from the Stock Market

This paper investigates two important things; the role of crude oil prices in explaining the Egyptian stock market return, and what factors derive from Egyptian crude oil prices. Using 6 log difference time series variables this paper finds that multiple regression is an inappropriate model to test the two goals mentioned above. On the other hand, using Vector Autoregression (VAR Model) is much more profitable in achieving the paper’s goals. Although the VAR model results are more reliable, crude oil price fails to explain the Egyptian stock market return because Egypt is not a big oil exporter. Furthermore, the VAR model shows that the Energy sector index, stock world index (S&P 500 the proxy), stock exchange index, exchange rate, and the global financial crisis are all factors that derive and determine the Egyptian crude oil price.

The Role of Digital Accounting in Improving the Quality of Financial Reporting Information and Its Impact on the Accuracy of Financial Analysts’ Predictions: A Field Study

The main objective of the research is to study the role of digital accounting in improving the quality of financial reporting information and its impact on the accuracy of financial analysts’ forecasts in the Egyptian business environment. This ultimately leads to enhancing the relevance, reliability, consistency, comparability, and understandability of the accounting information contained in financial reports, which positively affects the accuracy of financial analysts’ predictions. Consequently, it stimulates investment activities in the Egyptian stock market, increases trading volume, and contributes to the achievement of Egypt’s Vision 2030. The research was based on a field study, and data was collected through survey questionnaires. The research sample consisted of (85) individuals, including internal auditors and accountants working in companies listed on the Egyptian Stock Exchange. The study also provided several recommendations, the most important of which is the necessity of adopting digital accounting in companies as one of the requirements of the digital age and the digital economy, so that they can meet the requirements for digital transformation and the establishment of a digital Egypt. Companies should also focus on providing the necessary technologies to implement digital accounting. Keywords: Digital Accounting, Quality of Financial Reporting Information, Accuracy of Financial Analysts’ Forecasts

The Impact of Private and Public Information on the Trading Behavior in the Egyptian Stock Market

The Impact of Private and Public Information on the Trading Behavior in the Egyptian Stock Market

The Impact of Russia-Ukraine War on The Egyptian Stock Market

The study aims to investigate the Egyptian stock market response to the Russia-Ukraine war, by employing GARCH model on firms registered in Egyptian Stock Market for a period from March 2022 to March 2023. It is expected that the war will have a significant negative impact on Egyptian economy through food, energy, and Tourism, which will have a significant implication on Egyptian stock market, in addition to the direct effect of the war on the Egyptian stock market. the Russia and Ukraine market represent 40% of Egyptian tourism market. Therefore, Egypt witnessed increase in food and energy prices which affects the state general budget and foreign currency reserve. The inflation and supply chain disruption resulted from the war affect the performance of Egyptian companies which affect negatively on stability of Egyptian stock market and lead to exit of foreign investors. Keywords: Russia-Ukraine war, Egyptian Stock Market, Egyptian Economy.

Financial distress and stock price crash risk in Egyptian firms

Economic policy uncertainty intensified as a result of the global financial crisis. To overcome these obstacles, firms handle issues with financial distress and crash risk more proactively. This paper offers new insights into the relationship between financial distress and crash risk on the Egyptian stock market during the period of 2014–2021 and presents how managers strengthen the bad news hoarding mechanism to their advantage. Data were collected via financial statements and reports obtained from the Thomson Reuters database using 824 annual observations of 103 Egyptian firms via the generalized method of moments and ordinary least squares. Results show a strong positive impact of financial distress on crash risk using OLS and GMM. Results support the role of managerial opportunism to cover up bad news that undermines a firm’s economic fundamentals. The findings support an agency theory of how financial distress affects crash risk. The findings support conducting robust tests for alternative financial distress and crash risk measures.

The Relationship between Cash Ratio and Firm Profitability Applied Study on Egyptian Stock Market

The Relationship between Cash Ratio and Firm Profitability Applied Study on Egyptian Stock Market

Enhancing purchasing stock intention in investor–brands interaction: the moderated mediation role of sector knowledge

PurposeThis study seeks to investigate the interrelationships among sector reputation, purchasing stock intention, sector engagement and attitude toward the sector. Moreover, it aims to explore the moderating role of sector knowledge in the indirect relationship between sector reputation and purchasing stock intention, mediated by sector engagement and/or attitude toward the sector.Design/methodology/approachDrawing upon the theory of planned behavior, the research framework is empirically tested. A survey involving 300 potential and actual investors was conducted, representing individuals investing in tourism brands within the Egyptian stock market. The validity and reliability of the constructs were assessed using AMOS, while Hayes’s PROCESS macro was employed to examine the mediation and moderated mediation effects.FindingsThe findings reveal that sector reputation significantly influences sector engagement, attitude toward the sector and purchasing stock intention. Furthermore, the attitude toward the sector serves as an explanatory factor for investors’ propensity to purchase stocks of tourism brands. The study confirms the serial mediation effect of sector engagement and attitude toward the sector, respectively, in the relationship between sector reputation and purchasing stock intention. Additionally, it confirms the moderated mediation role of sector knowledge in the relationship between sector reputation and purchasing stock intention, mediated by attitude toward the sector.Practical implicationsThe research outcomes suggest that executives in the tourism industry should identify key determinants to enhance purchasing stock intention by fostering greater sector engagement and fostering positive attitudes toward the tourism sector.Originality/valueThis study contributes to the existing literature by shedding light on the importance of maintaining a positive brand reputation and emphasizing the influential role of investors’ knowledge, engagement and attitude in shaping investment decisions in the stock market. These insights contribute to the understanding of investor behavior and have practical implications for organizations in managing their brand reputation and fostering positive customer–brand interactions in the stock market context, thus the current study was conducted.

Do free-floated shares and board characteristics influence corporate risk disclosure? An empirical analysis on conventional banks in a developing country

Purpose This study aims to explore the status and drivers (including free-floated shares, board size, rule duality and board independence) of corporate risk disclosure (CRD) for the conventional listed banks in the Egyptian stock market from 2010 to 2021, which include the country’s major political upheavals and the COVID-19 pandemic. Design/methodology/approach This study based on a sample of 117 annual reports of sampled banks from 2010 to 2021. RD index of Al-Maghzom (2016) was developed and adopted to quantify CRD using an unweighted scoring system. The multiple linear regression model was used to validate the hypotheses. Findings The analysis shows that the COVID-19 pandemic increased insignificantly disclosure of all risks except for segment risks. In addition, findings reveal that all sampled banks adhere highly to the requirements of mandatory RD, with a low level of adherence to voluntary RD. Moreover, the analysis concluded that the board size and free-floating shares positively affect the disclosure of financial, operational, general information. Research limitations/implications The study’s limitations include the content analysis methodology, reliance on annual reports, emphasis on financial and non-financial risks, focus on listed conventional banks in Egypt. Practical implications Current study’s findings are more likely to be useful for many parties. It informs investors about the characteristics of the boards’ directors of Egyptian listed banks that disclosed risk information. Banks should disclose more comprehensive risk information. For academics, the current study’s limitations can be considered in their future research. Originality/value This work fills a new research area in which there is relatively little research in emerging financial markets that adds new evidence to the relationship between RD and both free-floating shares and board characteristics, particularly in Egypt.

The Effect of Overconfidence Bias on Investors Decisions in the Egyptian Stock Market: The Role of Information Acquisition

The Effect of Overconfidence Bias on Investors Decisions in the Egyptian Stock Market: The Role of Information Acquisition

Investigating the Impact of Foreign Portfolio Investment on Macro-Economic Stability: Empirical Evidence from Egypt

Foreign Portfolio Investment (FPI) flows have fluctuated significantly in the Egyptian stock market from 1993 to 2020. This high volatility of FPI has drawn attention to assess its possible effects on the Egyptian economy in terms of macroeconomic stability. Therefore, this study aims to empirically investigate the relationship between FPI flows and the inflation rate, which is a critical indicator of macroeconomic stability. For this purpose, the study applies a vector autoregressive (VAR) model to test the short-run dynamics among the variables of interest. Also, it conducts the granger-causality test to check the causalities among variables. Additionally, it applies the auto-regressive distributed lag (ARDL) model to examine the long-run relationships among these variables. An error correction (ECM) can then be applied by analyzing both the short-run and long-run relationships among the model variables. Empirical results showed that FPI flows increase the inflation rate in Egypt in both the short-run & long run, thereby negatively impacting the macro-economic stability of the Egyptian economy.

Measuring the impact of intellectual capital on productivity and investment decisions: An empirical study on non-financial listed companies on the Egyptian Stock Market

Measuring the impact of intellectual capital on productivity and investment decisions: An empirical study on non-financial listed companies on the Egyptian Stock Market

Determining audit fees: evidence from the Egyptian stock market

PurposeThis paper aims to empirically examine the determinants affecting audit fees in the Egyptian context concerning different organizational forms and governance mechanisms.Design/methodology/approachThis study adopts financial and non-financial data from 62 Egyptian firms listed on the Egyptian Stock Exchange from 2015 to 2020. The proposed audit fees model is developed by adopting panel data analysis to examine the effect of auditee, auditor and engagement attributes on audit fees. The validity of the proposed equation for determining audit fees on an annual basis was established by applying the fixed effect model results for the year 2020.FindingsThe results revealed that the most significant determinants that affect audit fees are liquidity, audit committee independence, audit report lag and the status of the audit firm. Audit fees of 95.7% are determined by these factors. The validation test proved that the proposed model was more accurate and closer to the estimated data at nearly 90.2%.Practical implicationsThe results of this paper would send early signals to audit firms, stakeholders and regulators regarding the determinants of audit fees, and provide an objective standard for fee-setting to be used by stock market regulators and professional bodies, in determining a minimum amount of audit fees that ensure a reasonable level of audit quality.Originality/valueTo the best of the authors’ knowledge, for the first time, this paper empirically examines the determinants of audit fees in an emerging market like Egypt and presents evidence for a period of six years.