CAIRO: The Egyptian Exchange (EGX) indexes ended Monday’s trading session on a collective decline amid selling pressures mainly from local retail investors as well as Arab institutions and individuals.
The benchmark index EGX30 fell 0.12 percent to hit 8,311 points, down from 8,321 points Sunday. The small and mid-cap index EGX70 dropped 0.19 percent to hit 604 points and the broader index EGX 100 also decreased 0.12 percent to reach 1,060 points.
Market capitalization lost more than 300 million EGP ($42 million), registering 483.5 billion EGP down from 483.8 billion EGP Sunday. Total trade value amounted to 1.2 billion EGP.
Walid Helal, a technical analyst at El-Mokattam Securities Brokerage and a member of the Egyptian Society of Technical Analysts (ESTA), attributed the slight decline to the failure of a Beltone-Hermes deal.
An alliance between Beltone Financial Holding and business tycoon Naguib Sawiris refused Monday to accept an offered stake of 9.5 percent in EFG Hermes, as they sought a 20 percent stake.
“Beltone said the offered stake will not allow the consortium an acceptable representation in Hermes board,” according to Reuters.
Helal expects the market is likely to witness a strong leap in conjunction with the economic reform procedures adopted by the government.
The Cabinet decided Saturday to raise fuel prices in light of reform measures aimed at restructuring subsidies that eat up 20 percent of the state’s budget. Egypt recently imposed a 10 percent capital gains tax on stock market profits and dividends, in addition to a 5 percent exceptional tax on those gaining more than 1 million EGP annually.
“EGX will resume its rally in the upcoming days, ahead of holding the ‘Donor Conference’ to obtain financial aid to support Egypt’s limping economy,” Helal added.
Ibrahim El-Nemr, head of the Technical Analysis Desk at Naeem Brokerage told The Cairo Post that the benchmark breached above the previous resistance level of 8,190 points, adding that “bulls are gathering more power.”
“This power may send the EGX30 higher towards 5,500 points as a next target,” Nemr said, advising investors to buy near supports.