The Egyptian Exchange (EGX) witnessed an increase last week with the support of the banking sector led by the Commercial International Bank (CIB), which accounted for about a third of the market’s trading during the week. Traders expected the market to continue to rise despite the CBE’s decision to keep interest rates unchanged last Thursday.
The CBE’s monetary policy committee decided at its Thursday meeting to maintain the main operation, and overnight deposit and lending rates at 12.75%, 12.25%, 13.25%, respectively, as well as credit and discount rate at 12.75%.
Last week, the benchmark EGX30 closed at 0.69% and rose to 13,824 points, and the small and medium-sized enterprises index EGX70 rose 2.56% to close at 535 points.
The broader index EGX100 also rose 2.02% to 1,390 points, and the EGX30 capped rose 0.55% closing at 15,987 points.
Haitham Yousry, head of investment at Solidere Securities Brokerage, expected purchasing power in the stock market to continue growing this week, suggesting that EGX30 would target 14,350-14,500 points, breaching the resistance level of 14,000 points.
The market capital was EGP 701.7bn last week, up 0.82% from the week before last, in which it recorded EGP 696bn. Shares accounted for 32.56% of the total trading value, while bonds seized about 67.44%.
Yousry pointed out that banking and pharmaceutical sectors would be a good bet in the rise of EGX in the medium term, led by CIB, whose share’s price would reach about EGP 90 in the short term.
The EGX has witnessed a rise from a strong support level of 13,800-13,900 points, which is a positive sign for the market to complete its upturn.
The CIB share’s trading value reached EGP 201.4m last week, according to Yousry.
The total value of trading on EGX reached EGP 12.6bn executed through 100,000 transactions over 1bn securities last week, compared to EGP 13.2bn trading value executed through 85,000 transactions over 682m shares in the week before last.
Chairperson of Egyptian Arabian Themar Securities Brokerage (EAC) Adel Abdel Fattah believes the market can test 14,000-14,200 points this week.
Egyptians accounted for 64.2% of trading on the stock market, while foreigners had 25.6%, and Arabs 10.1% after excluding deals.
Foreigners registered net sales of EGP 151.7m last week, while Arabs recorded net sales of EGP 87.9m after excluding deals.
Abdel Fattah said the market saw a positive performance, led by the banking sector, and the stock swap with Pioneers Holding, excluding the company’s share.
He advised investors to avoid margin trading and focus on stocks with good performance, expecting that the banking sector stocks will continue their upturn in the coming period.
Egyptians represented 65.3% of the trading on listed shares since the beginning of the year after excluding deals, while foreigners recorded 25.5% and Arabs 9.2%.
Foreigners were net sellers at EGP 161.5m, while Arabs recorded net sales of EGP 151m on listed shares after excluding deals since the beginning of the year.