Post 4 – My Current Data Set and Analysis

The most consistently (and frequently) collected data about the Egyptian economy I have been able to find have to do with stocks. For this reason, I decided to use data on these stocks—instead of sector-level or firm-level investment data—as the data set for my project. This data is much more detailed than any of the investment data I was able to find at the sector or firm level. Records are taken every day, the data is clearly labeled and processed without too much trouble, and stock valuation provides a pretty good sense of how investors are feeling about companies—and industries as a whole.

I’ve decided to use firms from the EGX 30 index. The EGX 30 is an index made up of 30 firms traded on the Egyptian stock market. The EGX is based out of both Egypt and Alexandria. The EGX 30 index (along with the EGX 70 and EGX 100 indices) takes into account both the market capitalization and the value of the stock. The index is updated two times a year; as the value or market cap of a stock drops, it’s removed as a constituent of the index and other companies are added to it. Though very few clear historical record of past iterations of the EGX 30 exist online (and I’ve hunted quite a bit!) I was able to reconstruct the EGX 30 as it would have been in August 2010—ie., the iteration at the time of the revolution in January. The EGX does publish a record of which stocks are added and removed to the exchange and when the changes were made, so it’s straightforward to recreate missing records based on the records of the rebalancing.

Like other data from Egypt, historical data about specific stocks within the EGX are hard to come by. Still, I’ve been able to locate a source that provides me with the data I need. I’ve also got access to how these stocks are classified—that is, I can see which sector each company has registered in with the Egyptian government. By matching these up with the list I created I’ve been able to look at how the highest-performing stocks right before the revolution were affected by the unrest.

Unfortunately, as I mentioned, the stock exchange closed very soon after the revolution. This means that I lack data for around two and a half months—data that would be very interesting to look at as well, as these months were some of the most violent of the revolution. Still, the fact that the stock exchange closed at all says a lot about the economic instability at the time. Also, as soon as the exchange opened in late March, many stocks quickly lost value (some of course more than others). This quick change alone has provided me a lot of good data that I’ve been working from. I’m still putting together the conclusions from the data, but I’ve been able to develop a few different ways to isolate what I believe are the effects of the sector on the company’s stock price.