CAIRO: Indexes of the Egyptian Exchange (EGX) ended the week on a sharp decline, amid growing selling pressures on blue chips led by the Egyptian institutions, after former Minister of Defense Abdel Fatah al-Sisi submitted his resignation Wednesday to announce his presidential bid.
Benchmark index EGX30 fell by 2.45 percent to close at 8,251 points, the small and mid-cap index EGX70 edged down by 1.03 percent to 627.1 points and the broader index EGX100 declined by 0.93 percent to 1,094 points.
“The benchmark index EGX30 failed to penetrate the resistance level near 2005-2006, despite approaching this level in most sessions this week during its sideways move to score the highest record since September 2008 on Thursday morning at 8,597 points, after Sisi resigned,” Ehab Saeed, head of technical analysis at Osool Securities Brokerage told the Cairo Post late Thursday.
Market capitalization lost 3 billion EGP ($400 million), reaching 487.4 billion EGP, compared to 490.4 billion EGP last week.
Saeed further noted that traders, especially local institutions, unexpectedly tended towards profit taking shortly after Sisi’s announcement, which led to disappearance reduction of buy orders on most equities.
The analyst attributed EGX30’S sharp loss of 230 points, to the sharp decline of all sectors topped by the leading shares such as CIB, Global Telecom, Hermes and Talaat Mustafa, due to profit taking on Thursday.
Turnover has slightly dropped to range between 850 million EGP and 1.07 billion EGP in most of the week’s sessions, compared to a daily average of 1.25 billion EGP last week, Saeed detailed.
Additionally, EGX70 failed to cross the previous resistance level of 660 points, due to profit taking on some small and mid-cap stocks, as well as random movement of Orascom Construction Industries’ (OCI) heaviest weight share, added the technical analyst.
The analyst expected the benchmark to maintain the new support barrier at 8,130 to 8,200 points, which is expected to stop EGX30 from declining. He reiterated a positive long-term outlook.
Last week, the indexes showed a mixed performance, with the benchmark index EGX30 edging up by 3.9 percent to close at 8,459 points, its highest level in five and half years, while the market capital incurred a 1.2 billion EGP loss.
In turn, the small and mid-cap index EGX70 fell by 2.68 percent to end the week at 633 points, compared to 651 points at the end of last week. The broader index EGX100 closed 0.99 percent down this week, at 1,104 points.