The Egyptian Exchange (EGX) witnessed a rise over the past week sessions, and traders are expecting a strong rebound in the medium term after the Christmas holidays, to test the level of 14,500 points.
The benchmark index EGX30 saw a rise of 0.35% last week and closed at 13,884 points. The index of small and medium companies EGX70 also rose 0.27% to settle at 529 points, while the broader index EGX100 fell 0.08% to 1391 points, and the EGX30 capped was down 0.22% closing at 16,227 points.
Mohamed Hassan, managing director of MEDAF for asset management, said the market moved sideways during the past week, predicting that it will keep moving sideways in the short term, targeting the level of 14,000 points which is the main resistance level and is likely to go upward after exceeding this level.
He added that the trading value was weak, as the average trading reached about EGP 350m during the past week, pointing out that the market needs new liquidity from investors in light of the government IPOs programme.
Hassan stressed the need to adopt new measures to stimulate foreign investment, suggesting that the EGX will see a long consolidation phase, followed by a rise in the medium term.
Market capitalisation of the EGX has reached EGP 700.5bn during the last week, down 0.18% from the week before last. Shares acquired 46.45% of the total trading value, while bonds had about 53.55% of transactions.
Mohamed Abdel Hakim, head of the research division at Faisal Brokerage, expected the market to resume rising to the levels of 14,000 – 14,500 points with the support of continuing purchases.
The total value of trading on the EGX reached EGP 6bn during the last week on 948m securities executed through 66,000 transactions, compared to EGP 7.9bn trading value on 552m securities executed through 87,000 transactions during the week before last.
Abdel Hakim pointed out that the market is likely to reach 14,500 points on the mid-term after Christmas.
He added that the market during the weekend session rose by 1%, which was expected after the main index EGX30 broke the most important resistance barrier at 13,800 points and continued its rise.
Abdel Hakim advised investors to stay away from marginal purchases and to maintain existing financial positions.
Moreover, Egyptians accounted for 70.6% of trading on the EGX, while foreigners accounted for 20.4%, and Arabs by 9% after excluding deals.
Ibrahem Elnemr, head of technical analysis at Naeem Brokerage, said the last week’s sessions witnessed a noticeable decrease in trading volumes, in the absence of sufficient sales and influential forces.
He explained that the successive declines of the market in the previous period brought it close to support areas at 13,250 points, noting that the market reached this area about four times during the year and then bounces back.
Last week, foreigners recorded a net purchase of EGP 201.9m, while the Arabs recorded a net sale of EGP 10.5m, after excluding deals.
Elnemr expected the market to rebound from the current levels up to 16,000 points during the coming period, indicating that the market will consolidate at the end of the year despite the absence of the influential forces.
The market is likely to trade between 14,050 and 14,100 points during the current week’s sessions, he expected, advising investors to selectivity as the market does not move as a single block now.
Noteworthy, the Egyptians’ transactions represented 66.7% of the trading value of the shares listed since the beginning of the year after excluding deals, while the foreigners scored 24.6% and the Arabs scored 8.7%. Foreigners recorded a net sale of EGP 1.7bn while the Arabs recorded a net sale of EGP 1.057bn on listed shares after excluding deals since the beginning of the year.