By Fatheya El-Garhy
The market has reacted positively to the decision to delay the ruling on the legality of the Constituent Assembly. Buying power increased in the market leading to an increase in the value of trading.
The Egyptian Exchange (EGX)’s main index, the EGX30, rose 2.03% to close at 4,862.5 points. The EGX70 index for small and medium sized enterprises (SMEs) rose 1.02% to close at 436.59 point. It is expected that the EGX70 will approach the 441 point level, followed by the resistance level at 443 points. The EGX100 index rose 1.85% to close at 750.8 points.
Orascom companies were behind the rise in the markets, the most prominent of which was Orascom Construction Industries. The company’s shares rose 5% to close at EGP 262 per share, accounting for 15% of all market transactions. Orascom Telecom Media and Technology (OTMT) shares continued to rise, closing at EGP 0.58 per share, accounting for 17.8% of market transactions and leading in the value of trading.
Orascom Telecom Holding continued to trade between EGP 3.15 and EGP 3.30 per share, as it has since mid July, closing at EGP 3.24. The Commercial International Bank (CIB) was able to maintaining trading at above the main support level of EGP 27 to close at EGP 27.58 per share, rising 1.5%. The Hermes Group moved away from the support level of EGP 10.5 per share to close at EGP 10.8, rising 1.9% The value of trading was EGP 410.9m with 198.5 million shares traded in 21,500 trades. Market capital equalled EGP 339.9 billion.
Ihab Saeed, Director of the Technical Analysis Division of Osool ESB Securities Brokerage, said that the main index yesterday targeted the short term resistance level at 4,870 points with strong support from Orascom Construction Industries. The company’s shares closed at their highest ever level at EGP 266 per share, a rise of 5.2%, testing the resistance level at EGP 267. He predicted that the company’s shares would break through and target the next resistance level at EGP 278 before profit taking forces them back down. He also expected the CIB’s shares to break through the resistance level at EGP 28 and to eventually test resistance levels at EGP 29 and EGP 30 during the week’s sessions.
El-Saeed noted that the nearly 100 point rise as well as trading over the EGP 400 million level indicated that the market was optimistic, with the main index overcoming the state of lassitude it had been in since the beginning of the week. He predicted that the EGP70 index for SMEs would test the resistance level at 443 points before profit taking causes the index to fall to EGP 441.
El-Saeed predicted that the market would rise another 70 to 80 points to close at approximately 4,950 points before stabilising for several sessions. He then predicted that the market would test 5,000 points.
Walaa El-Helby, an official with CI Capital, said that OTMT injected the EGX with some vigour after the company’s stock coupon provided new liquidity to the market. At the same time, the announcement that the new government would be announced instilled some confidence in traders that was reflected in their decisions
Trading by foreigners, driven by individual trades, resulted in net purchases of EGP 14.6m, accounting for 22.07% of the market. Trading by Egyptians resulted in net sales of EGP 12.2 million, accounting for 70.1% of total transactions.
Non-Egyptian Arabs recorded an EGP 2.5 million in net sales, accounting for 7.85% of market transactions. Arab trading was supported by sales by individuals, despite purchases by individuals. Trades made by individuals rose, accounting for 63.7% of all market transactions while trades by institutions fell to 36.3%.