Cairo - Mubasher: Analysts are having different opinions regarding the steep decline seen by the indices of the Egyptian Exchange (EGX), as the reasons remain unclear.
Experts are wondering about the reasons behind the recent excessive selling by local institutions, which some described as totally random and more like individuals’ speculations.
The director of the International Monterey Fund (IMF) for Middle East and Central Asia, Jihad Azour, said that Egypt has some fiscal and Monterey tools including interest rates that can help in containing the surging inflation rates.
Azour recently said in a press conference that interest rates are the right tool to address the inflation rate, something he said the IMF is currently discussing with the Egyptian government.
The head of the technical analysis department at Osool Securities that he anticipated the EGX fall due to the absence of stimulus, as well as other technical factors that reinforce the downwards trend scenario such as the horizontal movement of the main index.
Ihabd Elsaid added that with no good news, and the delay in applying the tax on capital gains, as well as the stamp duty, a weakened purchasing power is normal.
Elsaid negated that the recent IMF talks affected the Egyptian stock exchange, noting that the president’s visit to Saudi Arabia are good news that did not prevent the fall of the benchmark index today, adding that he expects EGX30 to rise by 50 points on Monday’s session, as some stocks narrowed losses by the end of Sunday’s session, he also noted that the level of 12,740 points now represent a resistance level.
Capital markets expert Toni Kamal said that the recent remarks by the IMF regarding raising interest rates to combat inflation rates have helped in the fall of the market indices.
Why anyone would bear the risk of the stock exchange when he can enjoy a 20% interest level with no risks, he asked, noting that there has been excessive “hysterical” selling by the Egyptian institutions since the pound flotation.
Kamal said that the random selling activity should be questioned, as he believes it has not reasonable explanation, unless there is something that they are aware of that other involved parties don’t know about.
Mohamed Gaballah of Pioneers Holding said that the recent recommendation by the IMF to raise interest rates, as well as not revealing the date for applying the stamp duty are representing a pressure on the market.
The last support levels for the main index was 12,800, it was broken to a target of 12,580, he added, noting that Marginal buying has negatively impacted the market.
