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EGX correction expected to dominate performance pending new stimuli - Daily News Egypt

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EGX correction expected to dominate performance pending new stimuli

EGX30 targets support level of 10,800 - 10,970 points this week


Traders on the Egyptian Exchange (EGX) expect that the blue-chip index’s corrective performance will continue during most of this week’s sessions, targeting the support level of 10,800 – 10,970 points.

This is set to continue until the market’s weaknesses are overcome and new incentives for real estate, industry, and communications stocks emerge. This is likely to occur in addition to the positive expectations that international institutions have for the Egyptian economy for the next period.

In a report published at the end of last week, Moody’s said that Egypt’s credit rating reflects flexibility in the face of financing shocks. This was one of the reasons for the ratings agency maintaining the country’s B2 rating with a stable outlook. It also stressed the importance of improving the country’s ability to withstand debts to raise the rating for the next period.

Last week, the blue-chip EGX30 declined by 2.46% to close at 11,180 points, while the broader EGX100 EWI rose 0.6% to the 2,748 points level.

Moataz Ashmawy, Managing Director of Arabeya Online for securities, said the EGX30 will fluctuate between 10,800 and 11,200 points during this week’s sessions. This will remain until leading stocks resume their rise and positive performance.

He explained that the current market declines are an opportunity to transfer liquidity from the small and mid-cap index (EGX70 EWI) shares to the EGX30 shares which are considered less risky. The latter index is also expecting a possible strong rise.

Ashmawy ruled out that the EGX has been affected by global market declines during the past period, given that the Egyptian market is still trying to form an upward trend. This compares to the US market and the Dow Jones Industrial Average, the latter of which declined by 0.6% at the end of last Friday’s session to end the week at 28,133 points.

The market capitalisation during the last week reached EGP 627.4bn, reflecting a downturn of 0.5% from EGP 630.5bn in the week before. Shares accounted for 74.3% of the total trading value, while bonds grabbed 25.7% of trading.

The market recorded a trading value of EGP 11.3bn, off the circulation of 2.7bn shares, with 225,000 transactions implemented. This compared to transactions worth EGP 9.9bn at the end of week before, on 3.01bn shares executed through 250,000 operations.

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https://dailyfeed.dailynewsegypt.com/2020/09/05/egx-correction-expected-to-dominate-performance-pending-new-stimuli/
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