Technical analysts expect the Egyptian Stock Exchange (EGX) will begin this week’s trading with a decline of 100 points, due to the Central Bank of Egypt’s (CBE) latest increase of the interest rate by 50 basis points (bps) on Thursday.
This will place the market’s main index target at approximately 6,700 points, according to the analysts, who also expect the index to move horizontally between 6,600 to 6,900 points during the next five sessions.
Head of the technical analysis department at Arabeya Online for Securities Brokerage Ahmed Khaled said the interest rate in banks always has an inverse effect on the stock market since each is considered an investment tool that aims to attract investors.
He however noted that the increase in interest rate will not have a major effect on indexes trading since it was highly expected after Banque Misr and the National Bank of Egypt (NBE) issued savings certificates with a high interest rate (12.5%) last month.
Khaled expected a decline of 100 points in EGX trading on Sunday and a decline throughout the rest of the week, ranging between 6,600 to 6,700 points.
He attributed his expectations to the short wave of profits over the past six sessions but noted that EGX did not exceed the main resistance level of 6,900 points over this period due to the weakness of purchasing power.
Head of the technical analysis department at Naeem Investment Banking Ibrahim El-Nemr also expected a decline in EGX trading on Sunday by no more than 100 points. He based this on the increase in interest rate, despite that the market was able to accommodate the increase after banks issued the high-interest saving certificates.
El-Nemr expected a movement in EGX that ranges between 6,700 to 6,900 points during this week’s trading and that the horizontal price movement will dominate the market, so long as the main index does not fall below the main support level of 6,300 points.
Last week’s indexes and trade values
| Change rate | The week before | Last week | Comparison aspects |
| +2.14% | 6,698 | 6,812 | EGX30 |
| +2.07% | 364.09 | 371.63 | EGX70 |
| +1.14% | 760.95 | 769.6 | EGX100 |
| +3.26% | 579.79 | 598.72 | NILEX |
| – 18.75% | 3.2 | 2.6 | Total trade values |
| +1% | EGP 421.6bn | EGP 426bn | Market capital |
Trading among different segments of traders last week
| Net trading in million pounds | Market share % | Comparison aspects |
| +70.28 | 83.26 | Egyptians |
| – 44.28 | 9.6 | Foreigners |
| – 26 | 6.78 | Arab |
| +149.5 | 34.19 | Institutions |
| -149.5 | 65.81 | Individuals |
