Egyptian stocks, which has been the best performing index in the Middle East, rose more than 3 per cent on Tuesday, extending gains for a fourth session, as foreigners piled up in large-cap stocks.
The Egyptian EGX 30 stock index closed 3.37 per cent higher at 12147.95, after hitting a peak of 12,171.66, breaching the previous all-time high hit in April 2008.
“Egyptian markets have already been on a roll because of foreign investors buying in, but today it’s a psychological level of breaching the 12,000 peak,” said Amr Hussain Elalfy, managing director — global head of research at Mubasher Financial Services.
In stock specific action, Global Telecom Holding jumped more than 11 per cent, while Ezz Steel rose 8 per cent. Misr Hotels also jumped 8 per cent.
“The stocks that have been driving the market higher were CIB, Global Telecom among others. They were all the large cap stocks that have been driving the market higher. We are witnessing buying frenzy from foreign investors as things have relatively stabilised on exchange rate,” Elalfy said.
Mubasher said the outlook depends on the impact of devaluation on financial statements of these company. “At least we will get a sense of how companies are faring in post devaluation period,” Elalfy added.
Egypt decided to freely float their currency from November 3, and markets have been on an uptrend since then.
Mubasher is bullish on consumer staples and select companies in industrial sector.
“We prefer names which have inelastic demand amid rising rate environment,” Elalfy added. Higher rate environment would benefit banks, financial services firms among others.
“We will see companies coming back to the market for listing, and companies owned by the government, so we would see a revival in the IPO market,” he added.
The index has gained 73 per cent since January 1, compared to a 12 per cent gains on Dubai Financial Market General Index.
On Tuesday, the Dubai Financial Market General Index closed 0.75 per cent lower at 3,505.18. The Abu Dhabi Securities Exchange general index closed flat at 4,479.01.