Continuing selling pressure drags down stock indices


Saeed: The stability of the main index above 10,350 points supports the positive vision of the market in the medium term

Abu Al-Yazid: EGX30 is testing the level of 10200 points in the short term

Dealers in the Egyptian Stock Exchange expected that investors’ fear of the impact of the capital gains tax law on the market would push the continuation of selling pressures on stocks to test the main index at the level of 10,200 points in the short term.

The main index of the Egyptian Stock Exchange EGX30 decreased by 1.4% at the end of the session yesterday, Sunday, to settle at the level of 10,366 points, and the EGX70 EWI index fell by 1.6% to settle at the level of 2,677 points.

Ihab Saeed, Head of Research at Osoul Securities Brokerage Company, suggested that today’s session will witness an upward rebound in its second half, supported by the consolidation above the 10350 points level, explaining that the rise targets the 10650 points level in the medium term.

He explained that the recent declines are caused by the approaching date of implementing the capital gains tax law on companies listed in the stock exchange, and the best solution currently is to continue tax transactions for companies as they are, by applying stamp tax only.

Saeed said that the index of small and medium-sized companies will continue to decline, targeting the level of 2560 points in the short term.
He advised dealers to take advantage of the opportunities to rise and rebound in selling, reduce purchasing positions, and wait for a clear vision of the future of the market and the possibility of implementing the capital gains tax law.

The EGX50 index of equal weights recorded a decline of 2%, stable at the level of 2267 points, and the “EGX30 capped” index decreased by 1.3%, stable at the level of 12,724 points, and the broader EWI EGX100 index declined by 1.5%, stable at the level of 3615 points.

Ahmed Abu Al-Yazid, head of the technical analysis department at Okaz Securities Trading Company, stated that the main index targets the level of 10,200 points, in the short term, and then re-rises to the level of 11,000 points, in the medium term, provided that the first resistance is at the level of 10,700 points.

He advised trading in the index of small and medium-sized companies, provided that it is quick and without using margin buying, and to wait until appropriate opportunities are available with the strategy set for each investor, and he expected the index to test the level of 2,650 points in the short term.

The market recorded trading values ​​of 1.2 billion pounds, through the trading of 330.6 million shares, with the implementation of 36.2 thousand buying and selling operations, after the shares of 195 restricted companies were traded, 23 of which rose, and the prices of 96 securities declined, and the prices of 76 other shares did not change, The market capitalization of the listed shares stabilized at the level of EGP 696.5 billion.

The net transactions of the Egyptians alone tended to sell at a value of 30.4 million pounds, with a rate of acquisition of 87.9% of the buying and selling transactions on the shares, while the net transactions of Arabs and foreigners tended to sell, recording 22.4 million pounds and 7.9 million pounds, respectively, with an acquisition rate of 8.9%, and 3.1% of trades.

Individuals carried out 19.4% of the transactions, heading towards all sales, led by Egyptian individuals, who recorded a net sale of 73.6 million pounds, while Arab and foreign individuals recorded a net sale of 42.2 million pounds and 384.5 thousand pounds, respectively.

While institutions captured 80.6% of the trading, heading towards buying, with the exception of foreign institutions, which recorded a net sale of 7.6 million pounds, and Egyptian and Arab institutions recorded a net purchase of 104.04 million pounds and 19.8 million pounds, respectively.

The article was written in Al Borsa Newspaper.