Egypt: Stock market reacts to geopolitical shifts, EGX30 drops by 0.73%

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Egypt - In response to the recent geopolitical shifts, the main index turned negative, registering a 0.73% drop at the close of Tuesday’s session, settling at 29,401 points.

The EGX70 EWI saw a rise of 0.86%, reaching 6,754 points, while the comprehensive EGX100 climbed by 0.51% to 9,633 points. Conversely, the EGX30 Capped experienced a 0.75% decrease, concluding at 36,095 points.

Bassem Atallah, head of Aman Securities, forecasts the EGX30 to fluctuate between 27,500 and 30,000 points towards this month’s end.

Mid-week sessions often witnessed corrective movements; this was evident as certain stocks surged by approximately 7% following a recent slump, prompting profit-taking among investors.

Atallah recommends that investors avoid margin buying, highlighting its proven ineffectiveness in the regional markets amid current events. Investors utilizing personal funds remain unaffected by downturns and can await market stabilization. In contrast, margin trading can lead to enforced sales by firms.

The day’s trading volume reached EGP 4.5bn, with 1.3bn shares exchanged across 140,000 transactions. This activity followed the trading of shares from 207 companies. By the end, 89 stocks rose, led by the National Housing Company (NHC), which soared by 19.99%.

Meanwhile, 70 stocks dipped, with “North Cairo Mills and Bakeries” facing the steepest fall of about 5.73%. 48 stocks remained stable, and the market’s total value was recorded at EGP 1.98 trillion.

Financial analyst Doaa Zidan predicts the main index may test the 29,600-point resistance level and could potentially reach 30,500 points shortly. She also identified the initial support zone beginning at 28,500 points.

Zidan attributed the previous session’s corrective trend to profit-taking, noting that while trading volumes were moderate, the petrochemical sector continued to outperform.

Egyptian investors predominantly engaged in buying, with net transactions totaling around EGP 276m (86.37%), whereas Arab and foreign investors leaned towards selling, with net transactions of EGP 102m and EGP 174m (8.11% and 5.52%, respectively).

Individuals executed 76.96% of trades, with Egyptians making net purchases of EGP 5m. Arab and foreign individuals favored selling, with net transactions of EGP 9m and EGP 246,000, respectively.

Institutional trading accounted for 23.03%, predominantly selling, except for local institutions, which made net purchases of EGP 271m. Arab and foreign institutions recorded net sales of EGP 93m and EGP 174m, respectively.