Traders in the stock market expect a sideway trend to dominate the Egyptian Exchange (EGX) session this week, until the Central Bank of Egypt (CBE) unveils its stance on moving the interest rates on Thursday. They said that this would weaken the purchasing power in fear of raising the interest on one hand and the intensive sales of foreign and Arab investors in the previous session, which led the EGX to the red zone, on the other hand.
Moreover, they noted that the fate of the stock market trading will also rely on the repercussions of the relative shift in the quality of terrorism in the Sinai after rockets were fired towards Israel. The IS claimed responsibility of the attack.
On the positive side, the EGX is awaiting a new package of placements that will inject new blood to enhance the size of trading. Aside from El Farasha for Manufacture and Printing Packing Materials’ (EFMP), MM Group’s, and Raya Contact Center’s (RACC) expected placements, the EGX approved listing Banque du Caire’s capital shares of EGP 2.25bn with a nominal value of EGP 4 per share.
The EGX grants a six-month deadline for companies, starting at the date of listing, to hand in their documents, determine the fair value for the implementation of the initial public offering of shares, and start trading among dealers in the market.
Head of the technical analysis department at the National Bank of Kuwait for investment in the Middle East and North Africa, Mohamed Al-Aasar, said that the market is expected to move between 12,900 and 13,400 points this week.
He pointed out that the best strategy for the market now is to combine short-term trades, as the shares will not move in wide price ranges. He added that the expectations of the market performance in March are positive and indicate reaching 14,000 points.
He noted that this week, trading may see a wave of decline at first before it bounces back up.
Hisham Hassan, head of technical analysis at Acumen Asset Management, said that the market is awaiting negative repercussions from the world because of an incident in which rockets from Sinai were fired towards Israel. He added that the CBE monetary policy committee is on the minds of the traders, due to the expected negative effect if the CBE raises interest rates again.
On the other hand, Hassan noted that if the CBE lowers interest rates, the EGX will move up towards new record highs and may move beyond 13,500 points.
He added that food, telecommunications, and banking sector stocks are recommended for trades this week.
The technical research unit at CI Capital Holding, in its daily report on the EGX performance, stated that following the hike in tradings last Tuesday, the 12,570 points region has become vital to stop the market from bleeding. It added that EGX30 will continue moving up as long as it remains above 9,600 points in the medium term.
Food sector shares, led by Juhayna, continued performing well, along with Edita, which gained 20% last week.
The main index, EGX30, rose by 2.41%, or 308.79 points, to 13,114.86 points during trading last week.
Turnover on the main index shares amounted to EGP 5.4bn, spanning 1.08 billion shares.
EGX70 also climbed by 6.11%, or 30.17 points last week, to 523.87 points. Total transactions amounted to EGP 1.02m.
Meanwhile, EGX100 increased by 4.66% to 1258.97 points, up from 1202.88 points in the week before.
EGX 50 index moved up by 3.19% at 1995.29 points, up from 1933.57 points in the previous week.
Market capitalisation last week closed with an increase of EGP 11.9bn, at EGP 634.3bn.
Egyptians tended to sell, netting EGP 299m, while foreigners and Arabs bought shares worth EGP 208.5m and EGP 90.5m respectively.
Individuals accounted for 54.69% of total trading, with a net sale of EGP 133m, while institutions accounted for 45.31%, tending to buy.
Egyptians dominated the market, with 69.27% of total trading, while the shares of foreign and Arab recorded 21.9% and 8.8% respectively during the last week.