Egyptian Exchange (EGX) declined in recent sessions, affected by regional geopolitical tensions following the Saudi Aramco incident.
After worries about global oil production, it is expected that the EGX would recover partially, especially with optimism about the Central Bank of Egypt’s (CBE) decision on interest rates on 26 September. The CBE’s Monetary Policy Committee (MPC) will determine interest rates in its coming meeting, after seeing a previous cut by 150 basis points at the last meeting as economic indicators improved.
Mohamed Othman, head of Technical Analysis Department at Pharos Holding for Financial Investments, believes the EGX30 index at the last two sessions closed below the predefined support level 14,800, ending the session at 14,745 points associated with low volumes, however, the purchasing power was still absent.
The significance of the support level of 14,800 lies in the fact that it represents the previous two weeks’ low, and the neckline of a bearish short-term pattern. “Therefore, we will adopt a conservative viewpoint as long as the indices keep trading below the aforementioned level until the market proves the opposite,” Othman said.
He reiterates monitoring the weekly close, as a confirmed violation below 14,800 would pave the way for further declines to reach the first support level of 14,500.
In this regard, those who are heavily investing in the market are advised to reduce margin exposure at any rebounding attempt while monitoring new entry points.
On the other hand, any potential rebound above 14,800 will revive hopes and will face resistance levels between 15,000-15,127, where the selling pressure will reappear.
In the last week, the EGX30 closed at 14,742.07 points, recording a decline of 2.44%. The EGX70 index posted a 3.04% loss, concluding the period at 539.57 points, while the S&P index declined by 3.93% and concluded the period at 2,192.29 points.
The EGX30 capped index declined by 2.54% and concluded at 17,889.1 points, while the EGX 100 index declined by 2.75% and concluded the period at 1,439.86 points.
Total market capitalisation reached EGP 738.0bn at the end of the period, representing a decrease of 2.26% over the last week.
The total value traded recorded EGP 12.5bn, while the total volume traded reached 1,029m securities executed over 116,000 transactions last week.
For the week before last, the total value traded recorded EGP 10.0bn, while the total volume traded reached 770m securities executed over 105,000 transactions.
Stocks trading accounted for 39.76% of the total value traded of the main market, while the remaining 60.24% were captured by bonds during the last week.
Egyptians accounted for 53.5% of the value traded in listed stocks after excluding deals during the period. Foreigners accounted for 40.3%, while Arabs captured 6.2%. Foreigners were net buyers, with a net of EGP 48.1m, and Arabs were net buyers, with a net of EGP 85.9m, after excluding deals in listed stocks.
Since the beginning of the year, Egyptians represented 66.3% of the value traded in listed stocks after excluding deals, foreigners accounted for 24.7%, and Arabs captured 9.0%. Both foreigners and Arabs were net sellers by EGP 1,472.8m and EGP 739.3m, respectively, after excluding deals in listed stocks during this year since it started.
