CAIRO: The Egyptian Exchange (EGX) surged Thursday and market capitalization gained 3.8 billion EGP ($531.43 million) amid high volume, backed by strong buying tendency among local and foreign institutions.
The market shrugged off separated clashes on the first anniversary of the Rabaa al-Adaweya and Nahda Square sit-indispersal and continued its uptrend to hit a new 6-year high.
Boosted by the positive performance of the market bellwether CIB stock, the benchmark index EGX 30 managed to penetrate the 9,300 barrier to register a new six-year high after edging up by 1.06 percent to hit 9,386 points compared to 9,288 points Wednesday.
The small and mid-cap index EGX70 rose by 1.25 percent, registering 642.9 points, up from 634.9 points Wednesday. The broader index EGX100 also went up by 1.1 percent to reach 1,149 points.
Market capitalization amounted to 516.9 billion EGP, up from 513.1 billion EGP last session.
Chief technical analyst at Helwan Securities Ahmed Abdel Rahman attributed the rise to the rally of the heavyweight CIB which soared to 46.5 EGP, in addition to local and foreign institution purchases.
During mid-session, the analyst had expected today’s session to end in the green zone, boosted by local institutions’ purchases. “Local institutions will increase their purchases with the aim of giving a positive outlook about the stock market and its ability to rise despite the current political upheaval,” he told The Cairo Post Thursday.
“EGX however is likely to see a correction wave in the upcoming sessions as traders are distributing their positions in preparation to gain some profits,” Abdel Rahman said.
Most leading shares were topped by CIB, Amer Group, Talaat Moustafa, Hermes, Sodic and Citadel reaching the overbought level, raising the possibility of an upcoming correction that could drive the benchmark toward 9,200 points, Abdel Rahman added.
“EGX’s rally with this remarkable increase in trading volume indicates that the market does not react to Muslim Brotherhood calls for security disorder. It also reflects the stability of state institutions, namely the military, the police and the government,” capital market expert Dr. Abdel Rahman Taha told The Cairo Post.
Abdel Rahman added; “the benchmark is likely to resume its bullish uptrend toward 10,000 points in the near future as the government is making progress in launching new investments along with mulling new legislations.”