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Intermediate3 min readThe Economy and Saving in Egypt · 10/13

Foreign, Arab and Egyptian Investor Flows

After each session you see lines like "foreigners were net buyers". That statement says something real, but far less than many people read into it. Here is what those figures actually mean.

What you will learn

  • Understand what net buying and net selling mean for each group.
  • See why the nets of all groups add up to zero.
  • Know why one day of net buying is not a price forecast.
In this lesson

Who is trading?

Trading data splits market participants by nationality into three groups, Egyptian, Arab and foreign, and by type into individuals and institutions. Each group has two figures: how much it bought and how much it sold. The difference is the "net": more buying is net buying, more selling is net selling.

Why the nets add up to zero

Every trade has a buyer and a seller. If foreigners bought 100 million more than they sold, someone else must have sold 100 million more than they bought. Total buying across the market equals total selling, and the nets of all groups sum to zero.

Foreign+100
Egyptian−80
Arab−20
Total (EGP million)+100 − 80 − 20 = 0
An invented day: foreigners net buyers, Egyptians and Arabs net sellers by exactly the same amount.
An invented exampleIn an invented session, foreigners bought EGP 300 million and sold 200 million: net buying of 100 million. Egyptians bought 900 and sold 980: net selling of 80. Arabs bought 100 and sold 120: net selling of 20. Total buying is 1,300, total selling 1,300, and the nets sum to zero.

How to read the figure

First, check whether the figure covers stocks only or the whole market. Total flows can include bonds and bills, which are a very different activity from stocks. Second, look at the trend over weeks, not one day. A single large institutional deal can flip a whole day's net.

Watch out"Foreigners were net buyers" does not mean the market will rise, or that foreigners know something you do not. For every pound they bought, someone else sold a pound, and each side has its reasons.

See the trading summary

The trading summary page shows buying, selling and the net for each group, with stocks shown apart from bonds and bills.

Check yourself

1. In a session, foreigners net bought 50 million and Arabs net sold 10 million. What was the Egyptian net?

The total must be zero: 50 − 10 − 40 = 0.

2. Foreigners were net buyers today. What does that mean?

The figure describes what happened; it does not forecast what comes next.

Summary

  • Net = buying − selling for each group: Egyptian, Arab, foreign, individuals and institutions.
  • Every trade has a buyer and a seller, so all the nets sum to zero.
  • Separate stocks from bonds and bills, and look at weeks, not a day.

Related terms

Related lessons

Educational content only, not investment advice. Companies and figures in the examples are invented for illustration.