Expectations of EGX’s rebound to continue towards 13,000 points this week

Mahmoud Hashem
4 Min Read
EGX seeks to increase competitiveness by lowering entrance fee (AFP File Photo / Khaled Desouki)

Analysts in the market expect the rebound of the Egyptian stock exchange (EGX) to continue this week towards the level of 13,000 points, supported by the decision of the Central Bank of Egypt (CBE) to fix the price of banking interest rates after last weeks’ trading experienced a loss of 800 in the leading index.

The curve of the dollar price witnessed a strong decline since 25 January by 13.5%, from the level of EGP 18.85 to EGP 16.3 last Thursday, followed by an increase in the EGX’s main index denominated by the dollar, from the level of 2,300 points to 2,600 points with a 13% increase and an equivalency of the main index, which declined by 2% from 12,882 points to 12,600 points during that period.

In terms of stocks, the majority of their movements stabilised during that period, especially the Arafa share, which increased from 15 cents to 16 cents, whereas the Naeem share declined from 63 cents to 61 cents, and Trans Oceans Tours (TRTO) from 7 cents to 6 cents.

Kuwait Holding Company declined by one cent from 65 cents to 64 cents, whereas Maridive and Oil Services’ (MOIL) stock increased from 25 to 29 cents.

Last week witnessed the government’s decision to voluntarily cross off the Tourism Urbanization Company (TOUR) from EGX, through the Egyptian General Company for Tourism and Hotels (EGOTH), because of the futility of continuing its registration after the government’s initial steps in the governmental offerings program through the registration of Banque Du Caire.

The technical analysis report by CI Capital Holding said that the company’s main index has penetrated the area of 12,570 points, targeting 12,000 points and 11,800 points. The market’s current resistance continues to stay at the levels of 12,570 and 12,600 points.

In the medium term, this decline is considered a correction movement, according to the report, which adds that the maximum expected decline of the EGX’s main index is at the level of 11,000-11,300 points.

Mohamed El-Aasar, head of the technical analysis department at Watany Capital Securities Brokerage, said that the market is moving in a horizontal range during this week’s trading, similar to last week, allowing more opportunities to trade on stocks.

“It is likely for the thirties stock to move between 12,350 points and 12,900 points. Stocks will not witness a large decline during the new month,” he said.

He stressed that it is positive for leading stocks to move, especially the stocks of Hermes, the Arab Cotton Ginning Company (ACGC), and Talaat Moustafa.

For his part, Mohamed Lotfy, head of the brokerage department at Ostool Company, said that EGX continues its sideway movements in anticipation of positive incentives of stocks that lead the market, targeting the level of 14,000 points.

He added that the CBE’s trend to stabilise the interest rate represents one of the pillars of stability this week, expecting stocks not to be exposed to strong changes. “Liquidity available for traders from selling treasury stocks of Global Telecom are considered an incentive to continue the hike,” he noted.

Global Telecom plans to buy treasury stocks worth $524m, whereas the period of receiving offers from traders to sell shares has ended.

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