Egypt’s shares are expected by analysts to keep their rally alive, with investors likely to build up new positions in large-caps ahead of the earnings season.
The main index saw a return of purchasing powers, which helped push its gains, according to analyst Sameh Gharib of the Roots Stock Brokerage House.
As the main index successfully exceeded the resistance level at 18,100 points, the neutral outlook now sees a horizontal movement between 18,200 and 18,400 points, Gharib noted.
Resistance levels for the EGX30 are now between 18,100 and 18,300 points, while the EGX70 index now targets the 828 to 856 range.
Last week, the market closed on a positive note, after a mixed performance by the main indices the week before.
The benchmark index EGX30 rose 3.27% to 18,363.29 points, gaining 582.27 points, with trading volumes reaching 1.29bn shares, and a total turnover of EGP 4.9bn.
The market capital surpassed the EGP 1tn mark, increasing by EGP 24.6bn, totalling EGP 1.006tn, compared to EGP 981.4bn by the end of last week.
It is worth noting that Thursday’s session saw the initial public offering (IPO) of CI Capital, with a total value of EGP 1.7bn, by offering 225.6m shares, representing 54.84% of the company’s capital.
The heavyweight Commercial International Bank (CIB) made its biggest weekly gains since March, rising by 6.3% to EGP 94.99 per share.
On the other hand, the small- and medium-sized enterprise index EGX70 slipped 0.15% to 865.82 points, while the broader index EGX100 increased by 0.81% to 2,291 points. The equal-weighted EGX50 went up 2.3% to 3,084 points.
Meanwhile, Pharos Research affirmed its overweight recommendation for Porto Group Holding’s stock based on a fair value (FV) of EGP 0.47 per share, according to a recent report.
The stock’s FV has been bolstered by the company’s development portfolio of Golf Porto Marina and Porto Pyramids, Pharos added.
The Egypt-based firm posted a net profit of EGP 245.5m during 2017, versus EGP 117.5m a year earlier.
Moreover, the board of the Egyptian real estate firm has proposed distributing bonus shares at a 1:5 ratio.
The EGX-listed company’s capital amounts to EGP 501.5m distributed over 5.015bn shares at a par value of EGP 0.10 per share.
In other market news, the Egypt-based Unionaire Group is planning to list on the Egyptian Exchange this year to pave the way for floating a stake on the local stock market in the second half of 2018.
The electronics manufacturer selected CI Capital to manage its potential IPO, sources familiar with the matter told Daily News Egypt.
The Egyptian manufacturer also picked up independent law firm Matouk Bassiouny as the IPO’s legal adviser, the sources added.
The firm is still studying the suitable alternatives to implement the IPO through shareholders’ partial exit or boosting capital or both, sources noted.
Elsewedy Electric announced the approval of its stock split, making its nominal value EGP 1 instead of EGP 10.
Market analyst Sameh Gharib said that blue-chip stocks supported the performance of the main index, especially Elsewedy and CIB.
Gharib also said that he expects EGX30 to target the 18,500-point level next week, with main support lying near 18,000 points.
Meanwhile, the Financial Regulatory Authority (FRA) on Thursday said that Global Telecom Holding has confirmed that there is no further information regarding the mandatory offer since its latest disclosure on 3 April 2018.
The company stressed it does not know any news related to the write-off, the FRA added in a statement to the EGX in response to rumours regarding the request for a write-off or the possibility of making a new mandatory purchase offer.
Earlier this month, Global Telecom said that Amsterdam-based VEON Ltd, its main shareholder, had notified the FRA that it withdrew its mandatory offer to buy the remaining stake in the telecommunications company.
The Dutch company said it had withdrawn its offer as time passed without getting any approvals.
Global Telecom’s capital amounts to EGP 2.7bn distributed over 4.7bn shares at a par value of EGP 0.58 per share.
In November, the FRA said that a mandatory tender offer was submitted to buy 42.31% of Global Telecom’s capital at EGP 7.9 per share.
On the side of financial results, the financial indicators of Credit Agricole-Egypt have shown a 28.85% year-over-year rise in consolidated profits for the first quarter (Q1) of 2018, recording a net profit of EGP 601.47m from EGP 467.12m.
Revenues from interests increased to EGP 1.3bn in the three-month period ending March 2018, versus EGP 1.08bn in Q1 2017, the bank said in a filing to the EGX.
Meanwhile, standalone profits grew to EGP 605.7m in Q1 2018 from EGP 475m in the corresponding period of 2017.
The bank had previously posted a net profit of EGP 1.95bn for 2017, compared to EGP 1.35bn in profits for 2016.
Credit Agricole’s capital amounts to EGP 1.24bn distributed over 310.9m shares at a par value of EGP 4 per share.
On another note, the Egyptian and Saudi stock markets are the most preferred for investors this year on the back of their good performance, compared to their peers in the Middle East and North Africa (MENA) region, Renaissance Capital CEO for MENA Ahmed Badr said.
The two Arab countries are currently implementing long-term economic reforms, Badr added during an interview with Enterprise.
The CEO said that he is not upbeat about the outlook for the Emirati and Qatari stock markets after their liquidity was slashed.
He indicated that investors must look “more attentively” at Saudi Arabia and Egypt.
Answering a question on why Saudi Arabia is the flavour of the year, Badr said that the investors are awaiting MSCI’s potential classification of the Saudi Stock Exchange (Tadawul) as an emerging market in June, Badr said.
“When the impact of the MSCI upgrade takes full effect in May 2019, it will very likely attract about $14bn in passive flows that just follow the index,” he added.