The Egyptian stock market ended trading in the green zone last week as the government’s IPO program sparked optimism among stock market dealers.
The benchmark index EGX30 rose 1.4% to close at 17,342 points at the close of last week’s trading, while the EGX70 EWI fell 1.33% to 3,428 points.
The EGX30 Cap Index rose about 1.08% to 21,074 points, while the EGX100 Composite Index fell 1.2% to settle at 5,084 points.
Moatas Ashmawi, managing director of Arabeyah Online, said the EGX30 index had broken through resistance at 16,800 points earlier in the week, with rising purchasing power pushing the index up to 17,300 points.
He explained that lower trading rates from the previous month contributed to the gains in the major indices as the rest of the major stocks followed CIB shares in gains.
He said the lower trading rate was due to liquidity withdrawal operations from Alwarsa amounting to EGP 3 billion in preparation for Beltone’s application process.
Ashmawi expected the main index EGX30 to rise to 17,800 points level in this week’s trading, and the stock market index also expected to perform well with positive and exciting news for the current economy.
Last week, the market recorded a turnover of 15 billion Egyptian pounds and 3.8 billion shares in circulation across 115,600 operations. This compares to two weeks ago when there was a trading value of 6 billion Egyptian pounds and 2.5 billion shares in circulation across 209,000 operations.
Mohammed Hassan, investment fund director at Odin Investments, said the Egyptian stock market had recovered from last week’s plunge as positive news about the withdrawal deal boosted investor sentiment.
Hassan expects the EGX30 index to continue its strong performance in the coming weeks, reaching levels of 17,600 and 17,800 points, supported by stable economic conditions.
He said the EGX70EWI index, which tracks small- and mid-cap stocks, has started to rally after closing at 3,400 support. He expected the liquidity stream to return on positive economic news and continue to rise in the coming weeks.
Hassan advised investors to trade quickly between support and resistance levels for now and avoid margin buying until the market outlook becomes clearer. He said he expects the metric to remain flat in the short to medium term.
Foreigners recorded net sales of EGP 251 million, accounting for 6.6% of equity trading activity, while Arabs, excluding transactions, accounted for 7.1% of net sales of EGP 21.2 million .
Stocks accounted for 82.55% of trading on the Egyptian Exchange over the past week, while bonds accounted for about 17.45%.
