EGX to continue in downtrend on short, medium terms: Expert

CAIRO – 8 October 2018: Head of the Egyptian Association of Technical Analysts Ahmed Shehata expected the benchmark of the Egyptian Exchange (EGX) to decline on the short and medium terms.

Sehata attributed the decline to external pressures on emerging markets after the rise in US interest rates and the increase of interest rates in some of these emerging markets, which led to attracting foreign investments to these markets, in addition to the rise in the price of oil globally, thus raising the budget deficit of the state.

Shehata ruled out the positive impact of the government's initial public offering (IPO) program on the Egyptian stock exchange, especially after news about the adoption of stock prices according to the average price during the last month and the weakness of the liquidity level in the Egyptian stock market.

The head of the Egyptian Association of Technical Analysts also expected EGX30 to break the level of 14,150 points down to reach the level of 13600 points during the current week, after excluding the existence of purchasing power again as the index reached the level of 14,150 points for the lack of any stimuli.

In 2016, Egypt announced the launch of the government’s IPO program to offer shares over three to five years in several state-owned companies in fields such as petroleum, services, chemicals and real estate.

The state’s IPO program comes in light of the economic reform program adopted by Egypt and conducted under the supervision of the Ministry of Investment.

It targets to offer 15-30 percent stakes of some state-owned companies on the stock exchange (EGX), and to increase funding to Egyptian companies and maximize the benefit from state assets.

It will also serve as a main tool to attract local and foreign capital flows to Egypt.
In March 2018, Former Finance Minister Amr el-Garhy said that 23 state companies have been chosen for the first phase of the state IPO program, with total shares worth LE 80 billion.

Garhy clarified that the market value of the shares to be listed is worth LE 430 billion.
Market Capitalization lost around LE 107 billion during the third quarter of current year, reaching LE 803.86 billion.

On Thursday, the Egyptian Exchange (EGX) announced that Sunday, October 7, is an official holiday for the bourse on the occasion of the 45th anniversary of October War victory.

EGX added in a filing to its official website that trading will resume on Monday, October 8.

EGX ended Thursday in red, and market capitalization lost LE 9.5 billion, as EGX30 dropped 1.46 percent, EGX50 declined 1.79 percent, EGX70 decreased 0.55 percent, and EGX100 inched down 0.80 percent.