The Egyptian Exchange (EGX) indexes bled heavily at the beginning of Sunday’s trading session amid intense selling by Egyptians leading to market losses of EGP 31.5bn, following the disruptions experienced in the country last Friday.
The EGX halted trading on 70 companies for 10 minutes after stocks fell by 5%. Afterwards, trading was suspended for more 30 minutes on the back of EGX100 index falling by 5% for the first time since November 2016, amid strong sales by Egyptian investors.
Traders believe that the declines in Sunday’s session is due to panic and random sale wave by Egyptians. However, foreigners’ purchases may contribute to ease the concerns of shareholders and then consolidate the stock market during Monday’s session.
Managing Director of Arqaam Capital, Sherif Heshmat, said the strong decline witnessed by the EGX indexes was caused by the fear of analysts and investors from the tensions in Egyptian streets.
He explained that this situation will quickly end with the return of foreign dealers during Sunday’s session, as foreign dealers always take Sunday off.
Heshmat expected the market to consolidate in Sunday’s session and advised dealers to benefit from the current buying opportunities as the market will bounce back after what he described as “an incidental event.”
Head of Technical Analysis at Beltone Financial, Mohab Agena, said the EGX30 found a strong resistance point at 15,000 and speculators began to sharply attack the index reaching key support levels at 14,800 and secondary support at 14,500.
He predicted that the market will witness an upward move from the current support area to levels of 14,400-14,500 points, advising investors to use the expected upward movement to reduce their sales, and wait for a new sell sign.
EGX ended Wednesday’s session in red, finishing the session below 14,000points.
The benchmark EGX 30 dropped by 5.32% to close at 13,958.11 points.
While, the small and mid-cap index EGX 70 dropped by 5.66%, to close at 509.02 points, and the broader index EGX 100 plunged by 5.68%, to 1,358.04 points.