EGX indices' divergent paths amid persistent corrections

Muhammed Khalid , Thursday 7 Dec 2023

Egypt's EGX indices witnessed a volatile week ending on 7 December, marked by fluctuations and varied performances as corrections persisted.

EGX trading hall. Ahram Gate.
EGX trading hall. Ahram Gate.


According to financial analyst Mahmoud Atta, profit-taking operations occurred on the Egyptian Exchange as part of a natural correction, notably after the EGX30 failed to breach the 26,000-point mark.

Consequently, corrective measures brought the EGX30 close to 24,000 points by week's end.

While the EGX30 dipped slightly by 0.2 percent to 24,686 points, the EGX70 and EGX100 indices showed marginal increases, rising by 0.22 percent to 5,286 points and 0.47 percent to 7,682 points, respectively.

Stock market expert Hanin El-Mahdy highlighted the market's struggle with margin during recent sessions, explaining how high margin rates constrained index growth, affecting investor profitability.

El-Mahdy noted a pattern of Egyptian institutions selling to balance accounts and generate month/year-end profits, while foreign institutions stepped in, stabilizing the market and ensuring liquidity flow through position adjustments.

Market capitalization shrank by 0.75 percent to EGP 1,663 billion over the week, and trading value dropped from EGP 276.5 billion to EGP 242.2 billion.

Looking ahead, Atta predicts a rebound in the EGX30, targeting around 25,200 points in the coming week.

He also foresees a rise in the egx70 index to approximately 5400 points, driven by the continued strong performance of select small and medium-sized financially robust stocks.

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