Egypt shares extend rally, record best weekly gains since September

Elsayed Solyman
5 Min Read

Egypt shares closed on an up note last week, recording best weekly gains since last September, according to bourse data and Daily News Egypt calculations.

The benchmark EGX30 index closed this week soaring 2.61% or 363.8 points to close at 14,319.34 points, which is the highest weekly performance since the first week of September.

The EGX70 index ticked up 2.06% to 789.71 points, while the EGX100 index added 2.12% to reach 1,776.59 points.

The equal-weighted EGX50 index grew 2.3% in a week to 2,532.17 points at a turnover of EGP 5.8bn.

About 1.8 billion shares were traded on the EGX30 index this week at a turnover of EGP 5bn.

Market capitalisation closed at EGP 780.7bn this week, gaining EGP 10.8bn.

The heavyweight Commercial International Bank (CIB) rose 2.36% in a week to EGP 78.14, as 5.4 million shares were traded at a turnover of EGP 424.8m.

Egyptian investors were net sellers with EGP 199.4m, while foreign and Arab investors were net buyers with EGP 30m and EGP 169.4m, respectively.

Egyptian investors dominated 76.6% of market transactions this week, while foreign and Arab investors made up 13% and 10.4%, respectively.

Individuals were net sellers with EGP 242.6m, dominating 71% of market transactions this week, while institutions were net buyers with the same value.

Foreign investors were net buyers on the Egyptian Exchange (EGX) with EGP 8.34bn since the beginning of 2017, according to the EGX’s monthly bulletin.

Arab investors were net buyers with EGP 635.14m since January 2017, excluding transactions, the EGX added.

Foreign buying was the main supporter of the EGX since the flotation of the Egyptian pound (EGP) in November 2016, analysts said.

Analysts forecasted foreign buying to rise over the coming period after the issuance of the new investment law and the expectations of lowering interest rates.

Egyptian investors dominated 77.69% month-on-month of total market transactions in October, while foreign and Arab investors made up 13.88% and 8.43%, respectively.

Foreign buying amounted to EGP 177.82m in October, while Arab buying came in EGP 228.11m, excluding transactions.

Technical analyst at the African Economic Council Mona Mostafa said in a research note that the EGP flotation has boosted the purchasing power of foreign investors in the EGX, which increased the liquidity levels.

The EGX has attracted foreign investment as their profits doubled on the back of the EGP depreciation and the stocks’ profitability, Mostafa highlighted.

Foreign buyers are likely to maintain their support of the EGX over the coming period, especially after the new investment law, which aims to lure direct and indirect investments to Egypt, she expected.

At the level of Arab investments, she noted that Arab investors are only trading in the EGX because of profit-takings and correction phases that the Arab markets are currently witnessing.

The analyst indicated that Arab buying on the EGX would remain the same until the Arab markets and oil prices settle.

Moreover, Hesham Hassan, head of technical analysis at Acumen Securities Brokerage, said that foreign investors are representing the true supporter of the EGX since the liberalisation of the exchange rate.

The technical analyst anticipated foreign buying to carry on its positive performance in the EGX, in line with reducing interest rate expectations over the next period.

Meanwhile, foreign investments in the Egyptian Exchange (EGX) stood at EGP 13bn after the flotation of the Egyptian pound in November, Chairman Mohamed Farid said in a broadcast call to CBC.

Foreign inflows in Egyptian debt instruments rose to $15bn since the liberalisation of the exchange rate.

The Central Bank of Egypt (CBE) had previously announced that Egypt’s trade deficit declined 8.4% in fiscal year 2016/2017.

photo caption

EGX foreign buying hits EGP 8.3bn in 10 months

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