The first trading session witnessed optimism amongst stock exchange experts after raising the interest rate by only 2%, hitting their expectations, which were between 400 basis points and 600 points, despite the issuance of investment certificates by the National Bank of Egypt (NBE) and Banque Misr (BM) with a fixed interest rate of 19% and 22% decreasing for 3 years, which can draw liquidity from the markets.
The Egyptian Exchange (EGX) rose on Sunday, as EGX30 increased by 1.68% to 16,694 points, and the share of the Commercial International Bank, the largest in terms of relative weight in the index, increased by 0.96%.
EGX70 recorded an increase of 1.42% to 2,846 points, and the broader EGX100 index rose by 1.63% to 4,301 points, and the EGX30 Capped recorded an increase of 1.87% to 19,911 points, and the market capitalization of listed shares rose to the level of EGP 1.07trn.
Moataz Ashmawy, Managing Director of Arabeya Online, suggested that the main index would target the resistance level of 17,000 points, reaching the level of 17,200 points, after the index penetrated the level of 16,600 points.
He pointed out that the small and medium-sized companies index targeted the resistance level of 3000 points, which is an important area for the index.
Ashmawy added that the session at the beginning of the week was positive, and the market was able to absorb the news of raising interest rates from the Central Bank of Egypt.
He explained that the issuance of 19% certificates by NBE and BM will not have a significant impact on the market, due to the different type of bank customer from the stock market customer, but added that the latter’s attractiveness has become supported by part of the liquidity of investment certificates in the coming period.
He advised investors to choose stocks with strong financial solvency and keep them, and to avoid margin trading, with high risk levels.
The market witnessed trading values of EGP 1.2bn, through the trading of 235 million shares, by carrying out 50,000 buying and selling operations, after the shares of 198 listed companies were traded, 91 shares rose during the session. The most rising shares were Ezz Steel – Alexandria, by 18.4%, while the share of Ezz Steel increased by 8.8%.
The prices of 20 shares fell, and the most declining share was the Egyptian Kuwaiti Holding share, 1.87%, Cairo Investment and Real Estate Development, by 1.68%, while the prices of 87 shares did not change.
Mohamed Abdel Hakim, head of the research department at Ostoul Securities Brokerage, expected that the EGX30 index will test the resistance level of 18,000 points, with the completion of the rise during the coming sessions, and the EGX70 index will also test the resistance level of 3,000 points.
Abdel Hakim said that the purchasing power was good during Sunday’s session, and the constituent materials sector is the best performing sector due to the depreciation of the pound, and rumors spread about the Elsewedy Electric Company and that there are Arab institutions intending to acquire minority stakes in the company, in addition to the possibility of a partnership between Heliopolis Housing and Development and an Arab foundation.
Elsewedy Electric rose by 5.8% during Sunday’s trading to reach EGP 15.87 per share, and Heliopolis Housing and Development rose 6.06% to reach EGP 9.45 per share.
The net transactions of Arab and foreign investors tended towards selling, with net transactions of about EGP 34.9m, and EGP 60.8m, respectively, accounting for 6.31% and 3%, respectively, while the Egyptians tended towards buying, with net transactions of about EGP 95.7m, accounting for 90.69%.
Individuals carried out 79.61% of the transactions, heading towards selling, as Egyptians and Arabs recorded a net sale of EGP 10.6m, and EGP 33.4m net purchases, respectively, and foreigners recorded a net sale of EGP 1.7m.
Institutions captured 20.38% of the trading, heading towards selling, with the exception of local institutions, who recorded a net purchase of EGP 106.3m, while Arab and foreign institutions recorded a net sale of EGP 1.5m and EGP 59m, respectively.