Technical analysts predicted that the Egyptian Exchange (EGX) will continue its sideways trend, leaning south, amid uncertainty of the Central Bank of Egypt’s (CBE) vision during the Sunday session.
Last week, the EGX declined by 1.93% and closed at 7,437, after the CBE kept the value of the national currency unchanged for the second week in a row. CBE Governor Tarek Amer had earlier said that maintaining a fixed Egyptian pound value was a mistake.
Ehab Saeed, director of the technical analysis division of Osool Securities Brokerage, said the performance of the stock market’s session will be pressured to stay at 7,400 points during Sunday trading.
He explained that the week’s trading could break the 7,400 points and fall down to 7,250 – 7,200 points.
He added that these expectations are natural under a fixed exchange rate, despite the CBE governor’s hints on imminent devaluation—awaiting the best time for the move.
In regards to the expected performance of the most prominent stock shares, Saeed said that the shares of Commercial International Bank (CIB) are likely to range between EGP 42 and EGP 41.80, having failed to break through the resistance level at EGP 43 last week. Global Telecom is expected to stay at EGP 3.60, while Hermes is expected to range between EGP 11.30 – EGP 11 and Talaat Moustafa between EGP 5.80 and EGP 5.70.
Ehab Rashad, managing director of direct broker for securities at Mubasher Egypt, said the EGX will continue to move horizontally this week, unless the CBE decides to devaluate the Egyptian pound.
He explained that foreigners and Arabs are inclined to sell by fears of injecting investments that are likely to be followed by the Egyptian pound’s devaluation, losing part of the investments they injected equivalent to the devaluation rate.