Egypt Stocks: Volatility looms, CIB’s strong fundamentals lead rebound

 

Egypt Stocks: Volatility looms, CIB’s strong fundamentals lead rebound

 

By Ahmed Kamel

Volatility may cast a shadow on most local equities in this week as uncertainty hits world markets on the back of a second wave of the Covid-19 pandemic.

Volatility will continue as a downward sideways trend may impact a number of blue chips, including Commercial International Bank (CIB). However, the bank’s stocks will rebound due to the lender’s strong financial fundamentals.

CIB’s net profits rose to LE1.8 billion in 2019, up from LE9.5 billion in 2018. Deposits at the bank jumped 6.73 per cent to LE304.4 billion at the end of 2019, up from LE285.2 billion a year earlier.

As I forecast in my last week’s article, the main index fell within 11,600-10,800-points range. However, uncertainty may drag it down below 10,200 points.

Read related article https://egyptfinancial.blogspot.com/2020/10/egypt-stocks-mixed-trading-as-sideways.html 

The benchmark index EGX30 fell by 2.96 per cent to 10,987.43 points. The broader indices EGX70 EWI and EGX100 EWI index plunged 8.22 and 7.68 per cent to 1,820.69 and 2,692.53 points respectively.

Volume rose to LE12.5 billion (around $796 million) last week, up from LE12 billion the previous week. The market capitalization lost LE21.6 billion, or 3.4 per cent, to LE609.1 billion, the Egyptian Exchange said in its weekly report.

Excluding deals, Arabs were net buyers of LE76.9 million, while non-Arab investors were net sellers LE84.4 million.

Arab and non-Arab investors have been net sellers of LE1.097 billion and LE12.813 billion since the beginning of the year, according to data from the Egyptian Exchange.