Egypt’s shares are expected to move upwards in the short-term as investors are set to embark on a fresh purchasing streak amid fresh stimulus in the market, analysts told Daily News Egypt.
“The Egyptian Exchange (EGX) is likely to maintain the bullish trend this week and test 16,000 points,” analysts told Mubasher.
The EGX is expected to perform positively during this week’s sessions, customer relations manager at Arabeya Online Michael Mamdouh Naguib said.
The benchmark EGX30 has resistance at 15,983 points, 16,000, and 16,040 points, while it has main resistance at 15,630 and 15,640 points, Naguib indicated.
The EGX30 index may break 16,000 points on the back of high trading volume exchanged at a turnover exceeding EGP 1bn, as well as when the Commercial International Bank (CIB) surpasses EGP 86.5bn he highlighted.
The index is projected to hover around 16,500 points amid heavy liquidity, backed by robust financial results, he indicated.
For his part, head of the capital market committee at the African Economic Council Ayman Fouda said that the Egyptian stock market will carry on the upward trend, in line with the continuous pumping of liquidity into the market by investment funds.
The EGX30 index is likely to retest 16,000 and 16,100, Fouda indicated, adding that the index has support at 15,812 and 15,555 points.
As for the small-and mid-cap EGX70 index, he noted it has a short-term resistance at 752 and 760 points, while it has support at 740 and 736 points.
The Egyptian Exchange rallied in August on the back of a positive sentiment supported by the outlook upgrade by Moody’s to Egypt’s credit rating.
The benchmark index EGX30 ended a three-month declining streak, and rose by 2.75% in August, as it closed on Thursday at 16.009.41 points, up 4.8% for the week.
Market capital went up by EGP 8.1bn to a total EGP 881.7bn in July.
Meanwhile, the small and medium sized enterprises (SMEs) index EGX70 levelled up 0.38%, as it ended the month at 747.38 points, and was up 1.27% for the week.
The broader EGX100 gained 0.32% in August, and closed at 1,936.41 points, posting weekly gains of 2.12%.
The equal-weighted index EGX50 added 0.75% by the end of the month, supported by weekly gains of 3.6%.
Notably, the previous week has only one trading session on Sunday due to the Eid holiday.
Meanwhile, Al Ezz Dekheila Steel- Alexandria was among best performers last week, after it profited during the first half of 2018, as compared with the corresponding period last year.
The Egyptian steel manufacturer logged EGP 902.9mn in consolidated profits in the six-month period ended June, against a net loss of EGP 78.9mn the year-over-year, the company said to the EGX.
Sales grew to EGP 21.2bn at the end of June, versus EGP 14.49bn in first half (H1) 2017.
As for the standalone business, the company generated EGP 1.6bn in profits, compared to EGP 716.9m in H1-17.
Al Ezz Dekheila previously reported profits in first quarter (Q1) of 2018 due to higher sales.
Consolidated profits surged to EGP 431.7m during the three-month period ended last March, versus EGP 68.8m in Q1 2017.
In other market news, the board of Abu Qir Fertilisers recommended a cash dividend distribution of EGP 1.1 per share to shareholders for FY 2017/2018.
The dividends will be paid based on an increase in shares by 1.26bn shares, versus EGP 10.5 per share based on 126.2m shares before stock split last year, the Egyptian firm said in a bourse filing.
In October, the extraordinary general meeting of Abu Qir approved splitting the nominal value of the stock in a ratio of 1-for-10 shares.
Accordingly, the issued-capital stood at EGP 1.89bn, distributed over 1.26bn shares at a par value of EGP 1.5 per share.
Abu Qir previously posted a net profit of EGP 2.4bn in FY 2017/18, versus EGP 2.2bn for FY 2016/17.
Meanwhile, Qalaa Holdings, the main shareholder in Taqa Arabia, announced its first investment in generating solar power through photovoltaic (PV) cells at a cost of EGP 1.35bn.
The Cairo-based firm aims to establish, operate, and manage a 50 MW solar power plant in Benban Solar Park in the Upper Egypt governorate of Aswan in collaboration with Hassan Allam Holding, according to a statement to the EGX.
Revenues of the project are expected to stand at around EGP 10.8m per annum, Qalaa Holdings said.
Five international funding institutions headed by the International Finance Corporation (IFC) have financed the ongoing project, the statement added.
The trial operation of the project is set in late 2018, the statement indicated, pointing out that electricity generation and sale will begin in early 2019.
The project follows the second phase of the feed-in-tariff scheme and helps diversify the North African nation’s electricity sources and diminish pollution, Qalaa Holdings added.
Notably, Taqa Arabia holds 60% of the solar power project, while Hassan Allam owns 40%.
Meanwhile, Cleopatra Hospital said it was studying several investment opportunities in the Egyptian market including buying a new hospital.
The company stressed that it had not yet made any acquisitions or that it had received a green light from relevant authorities in this regard, it said in a statement to the EGX.
Cleopatra Hospital’s announcement came in response to news circulated in the media that it was planning a new acquisition after it failed to acquire Al Nozha Hospital.
The company further added that among the acquisitions it was considering was El Katib Hospital.
The Financial Supervisory Authority (FSA) said previously that it denied the mandatory tender offer (MTO) made by Cleopatra Hospital for the full acquisition of Al Nozha.
In the first six months of 2018, Cleopatra Hospital achieved a 153.4% year-over-year surge in consolidated net profits to EGP 133.4m from EGP 52.6m.