The Egyptian Exchange (EGX) is likely to move sideways in the short term amid a profit taking streak from individual investors awaiting a fresh stimulus and imminent earing season for the first quarter (Q1) of the year.
Purchasing powers are expected to dominate the indices of the EGX in the mid-term, but in the short term, investors likely to book gains from a sustained market rally, the Head of the capital market committee at the African Economic Council, Ayman Fouda, said.
The benchmark EGX30 index has resistance at 14,810 and 14,930 points after seeing a rebound at support level of 14,635 points, Fouda highlighted, adding that the index may retest 15,000 points.
The small- and mid-cap EGX70 index has a short-term resistance at 695 and 705 points, while it has support at 677 and 669 points, he indicated.
Head of client relations at Arabeya Online Brokerage, Michael Naguib, said that the benchmark is likely to maintain seeing correction despite a rebound witnessed last week.
Naguib highlighted that the index has stop-loss limits at 14,600 points and by breaking this support level it may retest 14,300 and 14,000 points.
The EGX30 index has resistance at 14,950, 15,080, 15,200, and 15,320 points, he added.
The EGX’s indices went down during the third week of March, whereas market capitalisation decreased by EGP 10.4bn to EGP 820.7bn.
The benchmark EGX30 index lost 208 points, or 1.39%, to 14,782 points.
The heavyweight Commercial International Bank (CIB) declined 1.84% at EGP 68.25, with a turnover of EGP 333.4m.
The EGX70 index went down 1.78% to 685.53 points, while the broader EGX100 index retreated by 1.71% to 1,740 points.
In company news, Credit Agricole Egypt’s ordinary general meeting (OGM) has approved a cash dividend distribution to shareholders for fiscal year (FY) 2018 of EGP 4.24 per share.
The eligibility of dividends will be for shareholders registered until 15 April, the bank said in a statement to the EGX. The dividends will be paid as of 18 April, according to the statement.
Moreover, the extraordinary general meeting (EGM) has approved the proposed amendments of articles 19 and 23 of the company’s article of association.
In February, Credit Agricole reported a consolidated profit of EGP 2.2bn for 2018, versus EGP 1.95bn in 2017.
Meanwhile, Raya Holding for Financial Investment’s board of directors has approved the establishment of a non-banking financial services company with EGP 100m in issued capital.
A new company, Aman Company for non-banking services, will be set up with a paid-up capital of EGP 30m, Raya Holding said in a statement to the EGX.
The board also decided to establish Aman for Securitisation with an issued and paid-up capital of EGP 5m, the Cairo-based firm added.
The company reported a 14% year-over-year (y-o-y) drop in its consolidated profits for FY 2018.
It logged EGP 89.12m in net profit for the 12-month period ended 31 December 2018, versus EGP 103.22m in 2017, including minority shareholders’ rights, according to its statement to the EGX.
Revenues grew to EGP 7.9bn last year, from EGP 6.7bn in 2017, the company said.
At the level of standalone business, the company achieved a profit of EGP 22.9m in 2018, compared to EGP 515.8m a year earlier.
Furthermore, the company’s board of directors has recommended a cash dividend distribution of EGP 0.17 per share.
In November 2018, Raya Holding posted EGP 58.6m in consolidated profits for the first nine months of 2018, (9M18) versus EGP 87.8m in the corresponding period of 2017.
As for standalone financial results, Raya turned to losses in the 9M18, incurring EGP 6.6m against a profit of EGP 558.8m in the same period a year earlier.
In other earning news, Al Ezz Dekheila Steel – Alexandria (EZDK) reported a 78.6% y-o-y growth in its consolidated profits for a full-year ended 31 December 2018.
The steel company achieved a profit of EGP 647.35m last year, compared to EGP 362.4m in 2017, including minority shareholders’ rights, according to a filing to the EGX.
The company’s sales increased to EGP 41.29bn in 2018, versus EGP 34.37bn a year earlier.
In February, EZDK posted an EGP 2.5bn in standalone profits for FY 2018, versus EGP 2.2bn in 2017.
Additionally, the company’s management has proposed a cash dividend distribution of EGP 140 per share for FY 2018, in addition to an EGP 20 per share dividend payment for Q4 of last year, according to a separate statement.
The company noted it has recommended the distribution of EGP 40 per share for each Q1, Q2, and Q3 of 2018.
In November 2018, EZDK posted a 62.2% y-o-y hike in consolidated profits for 9M18, recording EGP 2.27bn from EGP 1.4bn.
The EGX-listed steel manufacturer achieved sales of EGP 28.19bn at the end of September 2018, versus EGP 20.49bn in the corresponding 9M17.
Meanwhile, EFG Hermes reported a 15% y-o-y decrease in its consolidated profits for FY ended 31 December 2018.
Net profits stood at EGP 1.05bn during the period between January and December 2018, versus EGP 1.24bn in 2017, including minority shareholders’ rights, the Cairo-based investment bank said in a filing to the EGX.
The firm’s revenues increased to EGP 2.4bn last year, from EGP 1.98bn in 2017, according to the filing.
At the level of standalone business, EFG Hermes logged EGP 595.27m in profits for the 12-month period ended last December, compared to EGP 94.4m in the prior year.
In the same vein, EFG Hermes’ board of directors has proposed a cash dividends distribution of EGP 0.65 per share for FY 2018.
In November 2018, EFG Hermes posted a consolidated profit of EGP 767.16m for 9M18, versus EGP 1.005bn in the same period a year earlier.
Meanwhile, standalone profits grew to EGP 190.8m in 9M18, compared to EGP 178.10m in the corresponding period of 2017.
In other market news, the Sixth of October for Development and Investment (SODIC) announced that its undeveloped land portfolio will be increased to 7m sqm, following the cooperation with the New Urban Communities Authority (NUCA).
SODIC is expecting to utilise this portfolio for the development of a series of projects in the coming decade, which may see the closure of EGP 150bn ($8.69bn) deals.
Furthermore, SODIC also signed a partnership agreement with the NUCA to build a full-fledged urban project over 500 feddan in Sheikh Zayed City.
The anticipated project is expected to be constructed at a value of EGP 43bn upon which the NUCA will allocate up to EGP 15.3bn under the deal over 11 years.
The consolidated income statements of SODIC showed a 24.7% y-o-y profit decline during FY 2018, recording EGP 450.9m.
In listed lenders news, Abu Dhabi Islamic Bank – Egypt’s (ADIB) OGM has approved a $30m financing from Abu Dhabi-listed ADIB.
The financing has a maturity of seven years at an expected interest rate of 9.88% to be approved by the Central Bank of Egypt (CBE), ADIB Egypt said in a statement to the Egyptian Exchange (EGX).
The OGM has also agreed to extend the maturity date of the ongoing financing worth $39m without an interest rate, to end in 2028 instead of 2023.
Additionally, the OGM has endorsed 2018’s financial statements, as well as the bank’s business and audit report for last year.
Moreover, the bank’s EGM has approved the amendment of articles 18,25,29, 42, and 45 of the bank’s articles of association.
In February, the ADIB Egypt reported consolidated profits of EGP 850.23m for FY 2018, compared to a net profit of EGP 631.5m in FY 2017.
The lender’s revenues reached EGP 3.1bn last year, up by EGP 474m or 18% y-o-y.
Returns on Murabaha recorded EGP 5.7bn in 2018, versus EGP 4.12bn in 2017.
Meanwhile, the ADIB Egypt’s standalone profits amounted to EGP 806.4m for the 12-month period ended last December, versus EGP 434.8m in the corresponding period of 2017.