Egypt Stocks: Rebound needs fresh incentives

Egypt Stocks: Rebound needs fresh incentives 

By Ahmed Kamel

Egypt’s benchmark index may stabilize this week, firming above 10,500 points as bearish pressures ease. However, mixed trading may persist in the short term. 

The EGX30 index should firm above 10,500 points by the end of the week, while fresh incentives will badly needed to lure foreign investors buying into Egypt’s blue chips in the medium term.  

Funds will continue their speculative trading in the coming weeks. Retail investors are advised to be selective and buy into defensive stocks, such as the food and medical sectors.

The indices were mixed last week. The main index EGX30 slipped 4.3 per cent to 10,515 points. However, the broader indices EGX70 EWI and EGX100 EWI index rose by 2.75 and 1.89 per cent to 1,870.7 and 2,743 points respectively.

Volume fell to LE8.8 billion (around $560 million) last week, down from LE12.5 billion the previous week. The market capitalization shed LE3.7 billion, or 0.6 per cent, to LE605.4 billion, bourse data showed. 

Arab and non-Arab investors have been net sellers of LE1.1 billion and LE13.6 billion since the beginning of the year, bourse data showed. 

The banks sector’s index fell by two per cent on the back of losses of the market heavyweight Commercial International Bank (CIB).   

CIB accounts for 40 per cent of the EGX30 average weight, according to bourse data. 

The banks’ sector topped last week's traded volumes with 27.5 million stocks worth LE1.3 billion, market data showed. 

The real estate sector ranked second with 299.6 million shares worth LE769.4 million. The financial services sector ranked third with 291.6 million stocks worth LE441.2 million, according to bourse data.