The standard stock exchange index, EGX 30, ended Monday’s session above the resistance level of 5,800 points for the first time this month amid expectations of a continuing increase.
The index closed Monday at 5,893 points compared to 5,793 points on Sunday, gaining 1.73 per cent, while the EGX70 index for small and medium sized enterprises (SMEs) rose 0.94 per cent to close at 546.61 points.
The referral of the case against the Constituent Assembly to the Constitutional Court contributed to the positive trend in the stock market. “The decision was satisfactory to those who are in favour of the dissolution of the assembly and those who are against it”, said Ihab Saeed, director of the technical analysis division of Osool ESB Securities Brokerage.
Saeed added that the penetration of the 5,800 points level happened with low transaction amounts not exceeding EGP 500 million, indicating that it may be a “false breakthrough” and that it must be sustained by larger transaction amounts, otherwise we may witness a fall in the index.
The index will retreat in the beginning of Tuesday’s session anyway, said the analyst. however, if the decrease is mild (of around 30 or 40 points), the market will settle above the resistance level, and will start targeting the 6,100 points level in the short term.
The resumption of the negotiations with the International Monetary Fund over the $4.7 billion loan scheduled today may impact the market positively as the loan will inject liquidity in the market and will therefore increase the monetary offer.
The market’s performance is the decrease of the interest rate on the platinum certificate of deposits (CD) issued by the national bank of Egypt by 1 per cent; a decision that may help to revive the economy, by inciting the investors to find other channels to invest their money other than the banks’ deposits.
