CAIRO: The Egyptian Exchange (EGX) indexes rallied Thursday, and the benchmark index EGX30 recorded its highest daily close since Aug. 10, 2008, amid intensive purchases by foreign institutions and local retail traders.
Powered by the positive performance of blue chips, namely CIB stock, the benchmark managed to penetrate a strong resistance level of 8,800 points to close at 8,826 points amid upbeat investor sentiment after the Eid al-Fitr holiday, compared with an 8,735-point close Sunday.
The small and mid-cap index EGX70 added 0.91 percent to reach 628 points, and the broader index EGX100 also went up by 0.83 percent to reach 1,108 points.
Market capitalization gained around 3.6 million EGP ($503.4 million), registering 501 billion EGP and up from 497.4 billion EGP Sunday. Total trade value surged to 1.3 billion EGP.
“The benchmark managed to breach above 8,820 points and could witness a wave of profit earning in the middle of next week before resuming its rally targeting 9,200 points,” chief technical analyst at Helwan Securities, and a board member of Helwan Holding Ahmed Abdel Rahman told The Cairo Post.
Abdel Rahman attributed the rise to the positive performance of CIB, Talaat Moustafa, Global Telecom and some real estate stocks.
Reiterating his positive outlook for the market in both the medium and long-terms, Abdel Rahman stressed that the expected profit-earning will not harm the market, but will bolster the uptrend.
“The benchmark reached the major resistance level of 8,825 points; a confirmed breach above this level may send it higher towards 9,300 points as a first target and then 9,700 points as a second target,” Ibrahim El-Nemr, the head of the Technical Analysis Desk at Naeem Brokerage, told The Cairo Post.
Nemr advised investors to buy as long as the indicators are below the stop-loss limit of 8,470 points.
Capital market expert Abdel Rahman Taha predicted that the stock market would cross 8,800 points, citing positive economic news and public satisfaction with recently adopted economic measures.
“The EGX’s performance has featured the negative effect of the Cabinet’s decision to mull a 10 percent tax on stock market profits and dividends, and the Central Bank of Egypt’s (CBE) decision to raise the interest rate. This gives positive indicators for a short and medium-term rally,” Taha told The Cairo Post Tuesday.
The upcoming donor conference—along with the launch of a national project expected to provide jobs for young people—will revive the faltering economy, and consequently boost the stock market, Taha added.
“Such incentives could drive the benchmark index EGX30 to penetrate the 9,000-point barrier, targeting 10,500 points, while the consequences of cutting subsidies along with the oil price hike have been watered down,” he said.