Egyptian shares are expected to move upwards this week, as foreign investors are likely to embark on building new positions in blue-chip stocks ahead of the imminent earnings season. The indices of the Egyptian Exchange (EGX) are likely to see a sideways trend this week, Watheeqa Securities Brokerage Branch Manager Ahmed Abdel Hamid said. The benchmark index EGX30 is projected to move between 17,400 and 17,700 points, Abdel Hamid added. The EGX is likely to maintain the positive performance as long as the EGX30 is settled above 17,000 points, he noted. For his part, the head of the capital market committee at the African Economic Council, Ayman Fouda, said that the Egyptian stock market is likely to continue the sideway-to-rising trend during this week's trading sessions. The EGX30 index has a short-term resistance at 17,730 and 17,850 points, and has support at 17,540 and 17,450 points, Fouda highlighted. The small- and medium-caps EGX70 index has a short-term resistance at 878 and 885 points, and support at 860 and 855 points, he pointed out. Fouda recommended investors to hold onto their stocks between support and resistance levels to protect earnings, in line with performing quick trades. He advised traders to pick stocks with positive financial news that are likely to rise and to avoid buying on margin. EGX30 keeps rally alive The EGX closed on an up note last week, despite the rising geopolitical tensions across the region. The benchmark index EGX30 gained 0.94%, or 165.33 points, and closed at the level of 17,781.02 points. Traded volumes totalled 1.14bn shares with a total turnover of EGP 5.19bn. The market capital increased by EGP 3.7bn to EGP 981.4bn, compared to EGP 977.6bn last week. The Commercial International Bank (CIB) recorded its highest gains in months, of 2.85%, to EGP 89.36 per share. EGX70 slipped 0.06% to 867.15 points, while the broader index EGX100 rose 0.46% to 2,273 points. The equal-weighted index EGX50 levelled up 0.44% to 3,008 points. Arab investors were net buyers with a net EGP 306.7m, while Egyptian and foreign investors were net sellers at EGP 278.8m and EGP 27.8m respectively. Financial analyst Saed Elfekky said that the main index is now targeting to restore the 18,080 level, noting that the Egyptian Exchange is set to maintain its upwards trend on the short and medium terms. Meanwhile, Egyptian Exchange Chairperson Mohamed Farid said last week that financial derivatives are expected to be launched in the Egyptian securities market for the first time over the coming period. The financial derivatives are one of the financial instruments that limit risks for investors, Farid remarked on the sidelines of Middle East Investment Conference 2018. Earlier this month, Farid projected that only two state-run companies would be listed on the EGX this year. Meanwhile, the financial indicators of Arabian Food Industries Co (Domty) showed it has turned to profit during the first quarter of 2018 due to higher sales. Net profit stood at EGP 40.5m in the three-month period ended March 2018, against a net loss of EGP 6m in Q1 2017, the dairy products firm said in a filing to the Egyptian Exchange. Sales grew to EGP 591.9m in Q1 2018, from EGP 471m in the prior-year period. Domty had previously posted a net profit of EGP 61.52m for the full-year ended December 2017, compared to EGP 25.5m in profits in 2016, including minority shareholders' rights. In other market news, Amer Group Holding Co has started the execution of the 90-feddan first phase of Porto Said project in western Port Said. The project will be implemented at a cost of EGP 3bn, Amer Group added. For his part, Port Said Governor Adel El Ghadban said that the project will provide 6,000 permanent jobs, in addition to 5,000 temporary ones. This project will upgrade the tourism and services levels in Port Said, as well as boost the governorate's hospitality capacity, El Ghadban noted. Meanwhile, Porto Group Holding aims to achieve EGP 2.1bn in revenues from the 439 units of the shore area of Porto Dead Sea. The investment cost of the area amounts to around EGP 1.6bn, and the company is expected to recognise the revenues during 2018 over about 70 units, the Egyptian real estate developer said in a filing to the Egyptian Exchange. The project is comprised of two areas, namely the 780,500 sqm mountain areas and the shore area spanning 19,500 sqm in a constructed space of 66,600 sqm, according to the filing. On Sunday 15 April, Porto Dead Sea, a subsidiary of Porto Group, announced the beginning of delivering the first phase of Porto Dead Sea in Amman, Jordan. On another note, EFG Hermes is expected to obtain the regulatory approvals to manage Islamic funds within a month. These funds could exceed EGP 100m in value, EFG Hermes Asset Management Managing Director Khalil El Bawab said at a press conference last week. Finally, Pioneers Holding Company for Financial Investment's board has approved a year-long EGP 2.9bn investment plan. The company will finance the plan through EGP 1.8bn divestments, Pioneers Holding said in a filing to the Egyptian Exchange on Thursday. Divestments will include a partial exit from its subsidiary Rooya Group, in addition to other full or partial exits in other investments, the company added. The plan will be also financed through raising the company's capital by EGP 1.1bn after obtaining approvals of the general meeting and the regulatory authorities over the coming period, the company noted. The EGX-listed firm indicated it has several promising investment opportunities in different sectors. The board had previously approved a 30% capital increase to EGP 4.68bn from EGP 3.6bn.
