Egyptian Exchange (EGX) indexes rose collectively at the end of last week, with market dealers expecting the EGX to continue its upward to test 15,000 points in the short term, after Saudi Telecom Company (STC) offered to buy a majority stake of Vodafone Egypt.
Last week, Vodafone International and STC announced they signed a memorandum of understanding to sell the former’s 55% stake in Vodafone Egypt to STC for approximately $2.392bn.
The benchmark EGX30 recorded a rise of 1.3%, closing at 13,918 points. The small and medium companies index EGX70 also rose by 0.75% to settle at 538 points. Broader EGX100 rose by 0.87% to 1,395 points, while the EGX30 capped was up 2.07% closing at 16,099 points.
Mohamed Hassan, managing director of MEDAF for asset management, said that if the EGX broke the resistance level at 14,000 points, it would then target 15,000 points, advising investors not to increase weights until the market breaks the resistance level.
At the beginning of last week, the EGX witnessed some decline, recording 13,550 points, but it started to bounce back following STC’s offer to acquire 55% of Vodafone Egypt. The market further rose at the end of last week, to approach the resistance level at 13,918 points.
Meanwhile, the market capital reached EGP 708.1bn, up 1.5% from the week before last.
Shares accounted for 29.7% of the total trading value, while bonds seized about 70.22%.
Investment research showed that STC’s possible acquisition of Vodafone Egypt led to increasing the value of Telecom Egypt (TE) share – which has 45% stake in Vodafone Egypt – to EGP 18, which encouraged investors to buy TE’s share.
The total trading on the EGX reached EGP 9.7bn last week, executed through 96,000 transactions on 796m securities, compared to total trading of EGP 10.4bn executed through 84,000 transactions on 767m securities in the week before last.
Arabeya Online, a brokerage company, said the EGX30 is moving sideways in long- and short-terms..
It also added the index moved down in the medium term, and advised investors to trade between the daily and weekly supports and resistances, and to purchase in the event that the main index turned up in the short-term. It also advised them to select stocks with the highest performance which moved upward in the short term.
For shareholders, it advised them to trade on the weekly resistance points with activating the stop-loss in the event of breaking the nearest daily or weekly support level or the trend turning to a downside in the short term.
Arabeya Online stated that the important support levels are 13,500, 13,170, and 12,900 points, while the important resistance levels are 13,920, 14,125, and 14,395 points.
Egyptians accounted for 67.2% of transactions on the EGX, while foreigners had 23.5% and Arabs 9.4% after excluding deals.
Foreigners recorded a net sale of EGP 76.4m last week, while Arabs recorded a net purchase of EGP 36.7m after excluding deals.
Notably, Egyptians’ transactions represented 65.8% of trading on listed shares since the beginning of the year after excluding deals, while foreigners had 24.5% and Arabs recorded 9.7%.
Foreigners were net sellers at EGP 190.5m, and Arabs recorded net sales of EGP 199.4m on listed shares after excluding deals since the beginning of the year.