The Egyptian Exchange (EGX) continued to climb at the end of the Tuesday’s trading, recording a rise of 1.94% to reach 7,139.44 points.
The increase follows the Central Bank of Egypt’s (CBE) decision to devalue the pound by 14.5% against the dollar, after holding an exceptional dollar auction for $200m.
The Board of Directors of the EGX decided Monday to allow shares that required to be traded in foreign currencies to be traded in Egyptian pounds. The move was lauded by stock market experts, who projected that it would revive the volume of shares traded in US dollars after the recession experienced due to the lack of dollar liquidity.
The shares of five registered companies are traded in US dollars on the EGX: the Faisal Islamic Bank of Egypt, Al Arafa for Investment and Consultancies, Naeem Holding (NAHO), Egypt Kuwait Holding, and Maridive and Oil Services SAE (Maridive Group).
Ehab Abdel Rahman El-Saeed, a board member at Osool Securities Brokerage (ESBC), said the CBE’s decision to provide an exceptional auction for $200m Monday bolstered the benchmark index, EGX-30, which climbed above the resistance level of 7,100 points during Tuesday trading.
He added that, after the market began Tuesday’s session moving towards 7,157 points, it took a horizontal trend, tending to decrease. The session closed at 7,139 points.
El-Saeed pointed out that the EGX’s increasing trend slowed Tuesday, affected by the 6.7% increase it registered on Monday following the devaluation of the pound against the dollar, raising the latter’s exchange value from EGP 7.73 to EGP 8.85.
El-Saeed expected trading to take on a horizontal trend during Wednesday’s transactions, ranging between 7,100 and 7,150 points, plateauing after the increase it has registered in the previous eight sessions.
For his part, Chairman of EAC-Themar Securities Brokerage Adel Abdel-Fattah said the decisions the Central Bank of Egypt took on Monday and Tuesday pushed investors to increase the volume of transactions to take advantage of the low prices of shares.