Dubai:
The Egyptian stock market continued its seven-day winning streak on Sunday, becoming the best performing index regionally.
The market was driven by expectations of smooth sailing in the IMF’s $12 billion loan after last week’s decision by the Egyptian Central Bank to depeg and float the Pound, a move that was cheered by stock market investors. The pound tumbled 45 per cent against the dollar on Thursday after the historical move.
The Egyptian EGX 30 index closed 6.12 per cent higher at 9,349.90, after gaining 13 per cent in the previous six sessions.
“This buying has been fuelled by local institutions. But to my surprise, foreigners also resorted to huge buying on Sunday,” Amr Hussein Elalfy, Managing Director — Global Head of Research, at Mubasher Financial Services told Gulf News.
The Egyptian index has gained 33.46 per cent in the year so far, making it the second best performing gauge in the Middle East after the Dubai Financial Market General Index, which has gained 5 per cent since January 1.
More upside:
Elalfy from Mubasher Financial Services expects another 14 per cent upside in the gauge in the next 12 months.
“We expect to see the market by only 40% (over the long-term) as the market is already pricing in devaluation,” said Elalfy, adding he is positive on banks and consumer staples, and negative for consumer discretionary due to high inflation.
In the currency market, the pound weakened slightly from 15.50 against the dollar.
“The spread between the bid and ask has narrowed,” Elalfy said, indicating liquidity in the market.
