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Traders expect improved EGX performance on back of interest rate cuts  - Daily News Egypt

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Traders expect improved EGX performance on back of interest rate cuts 

Accordingly, they expect Sunday’s trading session to witness the results of the CBE decision, which will affect the attractiveness of other investment tools for fixed-income instruments. 


Traders at the Egyptian Exchange (EGX) anticipate improved EGX performance on the back of the recent Central Bank of Egypt (CBE) decision to cut interest rates.

Accordingly, they expect Sunday’s trading session to witness the results of the CBE decision, which will affect the attractiveness of other investment tools for fixed-income instruments. 

Market traders had anticipated that the EGX would receive new incentives following the recent long absence of positive stimuli from the stock market. It has continued its sideways trend between the 10,800-11,200 point levels.

The blue-chip EGX 30 index declined by 1.26% during last week’s trading to close at 10,911 points. The downturn was reported despite numerous attempts to stabilise above this level, having also failed to breach 11,200 points resistance level. 

The broader EGX 100 index rose by 2.15% to 2,885 points, while the small and medium EGX70 EWI index, rose by 3.35% to close at 2,000 points. 

Mohamed Kamal, head of Corporates Department in Al Rowad for Securities Brokerage, said that the market’s attempts to break the 11,200 points barrier continued unsuccessfully until last week. 

However, the CBE decision to reduce the interest rate may renew those attempts during Sunday’s session.

Kamal said that the market is trying to base itself at the 10,800-10,900 points level, in a cross-collateral range between 10,900-11,150 points.

He also said that the market is in dire need of incentives, as it is awaiting the pricing committee’s decision regarding its discussions on fuel prices, which will positively affect many EGX sectors and ensuring positive indicators.

He added that the market is also awaiting the activation of the recently approved tax reduction law on the back of state moves to support Egypt’s markets. 

Kamal suggested that the market will continue its sideways trend during the current week until the emergence of stimuli that would change the market situation.

EGX recorded a trading volume of EGP 10.1bn, through the circulation of 2.3 billion shares, and the implementation of 243,000 operations. This compared to transactions worth a total of EGP 17bn during the previous week.

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https://dailyfeed.dailynewsegypt.com/2020/09/26/traders-expect-improved-egx-performance-on-back-of-interest-rate-cuts/
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