Egyptian shares are expected by analysts to halt their rally this week amid a profit-taking streak from a sustained market rally, but the mid-term outlook is still in an upwards trajectory, according to analysts polled by Daily News Egypt.
“We could see a profit-taking streak this week, with investors booking gains from the sustained market’s rally. This is normal, but the mid-term trend is suggesting that the market will keep the rally alive with fresh stimulus and a number of initial public offerings (IPOs) which could serve as a main boost to the market in the long-term,” said analyst Sameh Gharib of the Roots Stock Brokerage House.
EGX30 is now targeting resistance at the level of 17,100 points, followed by 17,500 points, while the support levels are now at 16,750 and 16,400 points, Gharib noted.
Meanwhile, analyst Ayman Fouda said that the benchmark EGX30 index has resistance at 16,400 and 16,500 points and has support at 16,200 and 16,000 points.
The EGX70 index has a short-term resistance at 909 and 918 points, while it has support at 885 and 878 points, he added.
Fouda recommended investors to hold onto their stocks, in line with performing quick trades between support and resistance levels to protect earnings and keep a percentage of liquidity in investment portfolios to add new purchasing positions near support levels.
EGX30 hits a new record high
The Egyptian Exchange (EGX) saw a positive performance last week, boosted by the buying activity of foreign investors.
The second week of March saw the benchmark index reach a new record high at 17,000 points, as the capital market reached its highest level ever.
The main index EGX30 rose 2.3%, gaining 526.8 points, as it closed at the level of 16,999 points, with weekly trading volumes reaching 1.5bn shares, with a total turnover of EGP 9.1bn.
The market cap ended the week at EGP 972.4bn, adding EGP 14.5bn, compared to EGP 957.9bn by the end of the previous week.
The small and medium enterprises EGX70 went up 0.56% to 899.82 points, while the broader index EGX100 increased by 1.27% to end the week at 2,117 points.
The equal-weighted index EGX50 closed at 2,836 points, rising by 2.38%.
Meanwhile, Ajwa Group for Food Industries said that it turned to a loss in the full year ended 31 December 2017.
The company suffered losses worth EGP 5.6m last year, against EGP 9.7m in profits during 2016, according to the company’s statement to the EGX.
Sales increased to EGP 438.17m in 2017, compared to EGP 318.26m in the prior year, the Egyptian unit of the Saudi Arabia-based Ajwa Group for Food Industries said.
As for the first nine months of 2017, the company reported losses of EGP 962,400, compared to profits amounting to EGP 17.03m in the same period a year earlier.
On another note, Arabia Group for Real Estate Investment announced that it plans to float 20% to 30% of its shares on the EGX.
The company’s IPO is expected to take place before the end of 2018, company chairperson Tarek Shoukry said in a presser.
The IPO is aiming at increasing the company’s capital to finance future projects and expansion, Shoukry added.
The Egyptian real estate developer has not appointed an adviser for the offering yet, but it will choose one of the local companies in the near future, according to the chairperson.