The Egyptian Exchange (EGX) is facing a tough challenge this week as it attempts to continue its upward direction, after the good performance it recorded last week.
Technical analysts and executives at brokerage firms said that the market’s ability to go beyond 8,000 points would cause it to continue moving upwards.
Experts advised investors to form purchasing centres, should the EGX continue to hike on Sunday below a support level of 7,993 points, which was broken at the end of trading last week.
The EGX closed last week’s trading at a high of 8% at 8,031 points, thanks to the cabinet announcing that it had reached the final stage in the negotiations with the International Monetary Fund (IMF) to borrow $12bn over three years to bridge the funding gap between expenses and revenues in US dollars.
Ehab Saeed, director of the technical analysis division of Osool Securities Brokerage, said that EGX30 would stabilise above 8,000 points. “If the level is broken, the index is likely to go between 8,400-8,500 points this week,” he added.
In regard of the expected performance of the most prominent stock shares, Saeed said that the shares of Commercial International Bank (CIB) were likely to reach a new record high at EGP 48.55 per share, which could push it up to EGP 50-52.
He nominated Hermes to range between EGP 13.80 – EGP 14 and Global Telecom at EGP 4.10. “However, if Global Telecom breaks through that level, it could reach EGP 4.40.”
Ehab Rashad, managing director of Direct Broker for Securities – Mubasher, said that EGX will need to continue above 7,993 points, noting that investors have the chance to form purchasing units as long as the EGX remains above that level.
He added that the market will face a resistance level of 8,260-8,500 points on the short-term, amid the developments with the government’s loan negotiations with the IMF.