Dubai: The Egyptian index jumped 1 per cent on Tuesday ahead of an interest-rate cut from the north African country’s central bank.
The Egyptian Exchange (EGX) index closed 1 per cent higher at 14,932.73, padding up on gains from the beginning of the year. The index has now gained 14.75 per cent since January 1, a marked improvement after a decline of 13 per cent witnessed in 2018.
“Egypt has been very strong this year so far. We expect a small one at the upcoming central bank meeting on Thursday. Stocks that have are heavily leveraged are leading the rally, as the impact of lower interest expense will further help earnings growth,” Vrajesh Bhandari, portfolio manager at Al Mal Capital, told Gulf News.
Banks and financial institutions have been leading the rally.
“The Egyptian index is poised for further gains towards the second target of 17,000 in the near term,” Shiv Prakash, senior analyst with First Abu Dhabi Bank Securities (FABS), said in a note. FABS had recommended a technical buy from 12,000 on December 17.
Prior to this year, foreign investors had chosen to stay away due to concerns over emerging markets amid the devaluation of the Turkish Lira.
However, foreigners have been positioning themselves since the beginning of this year.
“We are also seeing a recovery of foreign inflows, following six months of outflows,” Bhandari said.
Elsewhere in the region, Saudi Arabia’s Tadawul All Share Index closed at 8,600.32, up 0.60 per cent.
“Saudi index is heading towards the final target of 9,000 in coming weeks,” Prakash said.
The Parallel Market NOMU index closed 1.61 per cent lower at 3,275.97.
Saudi Basic Industries closed 0.49 per cent higher at 123.20 riyals, while Al Rajhi Bank ended 1.8 per cent higher at 102 riyals.
Saudi Kayan Petrochemicals closed more than a per cent lower at 13.70 riyals. The Muscat MSM 30 index closed 0.40 per cent lower at 4,124.79.
In the UAE, the Dubai Financial Market (DFM) general index fell 0.46 per cent to 2,484.80, while the Abu Dhabi Securities Exchange (ADX) general index ended 0.44 per cent lower at 5,024.49.