The EGX 30 index closed at 30,774.19 points during August trading, recording an increase of about 4.75 percent, while the EGX70 EWI index recorded an increase of 3.48 percent, ending the month’s trading at 7,076.3 points.
As for the EGX30 capped index, it recorded an increase of about 4.79 percent, closing at 37,653.92 points, and the EGX100 EWI index recorded an increase of about 3.96 percent, closing at 10,148.81 points.
Supporting factors
In turn, the Managing Director of Alpha Financial Investment Management, Mohammed Hassan, said in exclusive statements to the Sky News Arabia Economy website that the market movement during August’s trading witnessed a strong decline at the beginning of the month due to some negative news issued by the United States of America (referring to the weak employment data and its effects on the markets).
The week from the 5th to the 8th of the month witnessed fluctuations in global markets, following the employment data in the United States. As for the Egyptian Stock Exchange, it reacted to these developments by losing about 55 billion pounds on Monday, August 5th, and its main index fell by 2.33 percent to close at 27,840 points.
Hassan added that the market during the following periods, and in conjunction with the general economic situation in Egypt, starting with the confirmation of the timetable for the IMF review next October, the strong results of the listed companies, and the news related to converting the Saudi deposit at the Central Bank of Egypt into investments, all represented positive factors for the path and movement of the market indicators.
- The International Monetary Fund said in a review that it had eased several conditions in its $8 billion financial support package for Egypt, including allowing Cairo more time to implement reforms.
- At the beginning of the month, Saudi Investment Minister Khalid Al-Falih said in a meeting with Egyptian government officials that “the Kingdom has a plan to increase the investments of the Saudi Public Investment Fund in Egypt… and a plan to convert our deposits in Egypt into investments.”
The Managing Director of Alpha Financial Investment Management Company explained that the results of the companies’ business – especially the real estate ones – announced during the month for the second quarter of this year were positive, and some of them recorded historic sales for Egyptian companies such as Palm Hills, Talaat Moustafa, and Orascom, whether inside or outside Egypt, in addition to the positive performance of the movement of the indicators of the banking and non-banking financial services sectors.
He expected that next month would witness more positive movement in the market and its indicators, supported by the expected entry of liquidity from foreign investors and the conversion of Saudi Arabia’s deposit into investments, with opportunities to direct a percentage of it to listed stocks, which would support the EGX70 index exceeding its targets at 8,000 points, with the main market index reaching 34,000 points.
Total Trading
During August’s trading, the Egyptian Stock Exchange recorded a total trading value of about EGP 1.522 billion, while the trading volume amounted to about 23.153 million papers executed in 2,603 thousand transactions, compared to a total trading value of EGP 1.014.2 billion and a trading volume of 22.089 million papers executed in 2,215 thousand transactions during the previous month.
Stocks accounted for 7.23 percent of the total trading value within the compartment, while the trading value of bonds/treasury bills represented about 92.77 percent during the month.
Investor Trading
In terms of investor trading, Egyptians’ transactions accounted for 88.1 percent of the total transactions on listed stocks, while foreigners accounted for 6.1 percent and Arabs for 5.7 percent, after excluding deals.
Foreigners recorded a net purchase of EGP 1,185.1 million, while Arabs recorded a net sale of EGP 1,031.7 million, after excluding deals.
Market forecast
Regarding the expected market movement and performance, the economic expert, member of the board of directors of Al-Hurriya Securities Company, Dr. Hanan Ramses, explained in exclusive statements to the “Sky News Arabia Economy” website that it is expected that market transactions during the month of September will witness more activity and the injection of liquidity rates into the market, supported by the strong business results announced, which reflected upward trends for a number of sector indicators, in addition to cash distributions.
She added that the most prominent sectors expected to gradually rise are the chemicals, real estate, and non-banking financial services sectors, in which most of the listed stocks have begun their upward path.
She pointed out that the banking sector is also one of the promising sectors with the continued stability of interest rates and the stability of banks’ financing plans, in addition to the attractiveness of savings certificates that continue until now. The chemicals sector also enjoys many opportunities, especially after the end of the previous gas problems that had led to the shutdown of some production lines earlier, which was reflected in the companies’ tendency to raise the prices of their products and thus the ability to achieve expected price booms.
In terms of indicators’ targets, she expected the main market index EGX30 to target levels between 30,000 and 32,000 points, with strong chances of reaching 34,500 points, supported by the liquidity expected to be witnessed by the market during September’s trading.
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