The Egyptian Exchange (EGX) is poised for cautious trading this week following last week’s sharp downturns. Market sentiment is buoyed by the anticipation of a corrective movement’s end and the resurgence of strength in the indicators, underscored by positive year-end corporate results.
The EGX30 index fell approximately 7.22% to 29055 points, while the EGX70 EWI index dropped 4.19% to 6596 points by last week’s close.
Mohamed Farag, Head of Technical Analysis at Tropicana Securities, predicts the main index will fluctuate sideways, challenging the 30,000-point resistance level, and potentially extending to the 30700-point zone. A stable performance above this threshold could propel the index towards 32200 points.
Farag highlights last week’s significant sell-off, marked by reduced trading volumes and values, which kept traders on edge. Nonetheless, the last session’s uptick is a hopeful indicator.
Last week, EGX transactions totaled around EGP 18.7 billion, involving 3.6 billion shares across 572,000 trades. This contrasts with the previous month’s EGP 30.4bn turnover from 3.8 billion securities traded in 750,000 transactions. Listed companies’ market cap shrank by 6.13% to EGP 1.94trn.
The EGX30 Capped index saw a 7.52% decline to 35,343 points, the EGX100 index fell 4.68% to 9,411 points, and the S&P index decreased by 1.82% to 6,880 points.
Abdullah Farag, Technical Analysis Head at Tycoon Brokerage, anticipates the main index will rebound to test the 29,850-point resistance, with eyes on the 30,700-point zone, reflecting a cautiously optimistic outlook initiated last Thursday.
He notes the previous week’s pronounced corrective dip, bottoming near the 28,200-point support before recovering at week’s end.
Farag advises investors to retain stocks until targets are met and to leverage the downturn to initiate new buys at support levels, cautioning against margin buying due to heightened risks.
Egyptians dominated trading on listed stocks at 82.6%, with foreigners at 11% and Arabs at 6.4%, excluding deals. Foreigners net sold EGP 490m, while Arabs net bought EGP 62m.
Year-to-date, Egyptians constituted 88.8% of the listed stock trade value, with foreigners at 4.8% and Arabs at 6.4%. Foreigners net bought EGP 2.3bn, while Arabs net sold EGP 628m, excluding deals.
