Egypt's stock market is expected to experience mixed movements in the upcoming session as investors await the Central Bank's decision on interest rates. The market has been under pressure from foreign selling and low liquidity, exacerbated by regional geopolitical tensions. Experts believe that the 54068-point level for the EGX30 index and 20200 points for the EGX70 index are crucial in determining short-term market trends.
The Egyptian stock market closed on a decline, with the EGX30 index dropping 1.29% to 54224 points, and the EGX70 index falling 1.16% to 20222 points. The EGX100 index also decreased by 1.14% to 26686 points. The total trading value was around 9.2 billion pounds, with the market capitalization of listed stocks reaching approximately 4.3 trillion pounds. A total of 221 companies were traded, with 45 stocks rising and 157 declining.
According to Shreef Wahid, a financial expert, the Egyptian stock market is currently experiencing a state of fluctuation and re-pricing due to regional geopolitical tensions and the Central Bank's move to withdraw over 500 billion pounds from the banking system. This has led to a decrease in liquidity, causing a temporary decline in the market. Wahid believes that the 54068-point level is a crucial support level that will determine the market's short-term direction.
Wahid expects the market to test its liquidity in the upcoming session, and a break below the 54068-point level could indicate continued selling pressure and a deeper correction. On the other hand, the EGX70 index is expected to continue its upward trend, with its components experiencing a natural correction after significant price increases. Wahid advises investors to focus on long-term investment horizons and dividend-paying stocks.
Rami Hegazy, another financial expert, attributes the market's decline to continued foreign selling and the market's wait for the Central Bank's interest rate decision. He identifies the 54200-point level as a key support level for the EGX30 index, followed by 53800 points, while resistance levels are at 54800 and 55100 points. Hegazy expects the market to rebound from its current support levels.
Hegazy notes that the market remains in a good state despite current fluctuations, with recent declines representing a healthy profit-taking and rebalancing of investment portfolios. He expects sectors such as communications, construction, tourism, and transportation to continue performing well. The market's trend is expected to remain positive in the long term.
The Egyptian stock market has seen significant foreign selling, with Egyptian investors recording a net sale of 555.8 million pounds, while Arab and foreign investors bought with a net value of 71.6 and 484.2 million pounds, respectively. The market's performance is closely tied to the Central Bank's decision on interest rates and regional geopolitical developments.
Key points
- The Egyptian stock market faces challenges from foreign selling pressure and low liquidity.
- Experts expect the market to rebound from current support levels.
- The market's long-term trend remains positive despite short-term fluctuations.
