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Egypt shares to move sideways as CBE leaves interest rates on hold EGX30 closed almost flat last week as foreign investors book gains awaiting fresh stimulus
Egypt shares are expected to move sideways in the coming few weeks after the Central Bank of Egypt (CBE) left interest rates on hold amid uncertainty about the timing of resuming easing cycle in tough market conditions. The Monetary Policy Committee (MPC) of the CBE decided in its meeting on Thursday to keep the current interest rates unchanged. Overnight deposit rates, and overnight lending rates, remained unchanged at 16.7%, and 17.7%. The rate of the main operations, and the discount rates were also both kept at 17.25%. The Egyptian Exchange (EGX) is likely to maintain the sideway moves after breaking 13,800 points and hovering around 13,500 and 13,400 points. The benchmark EGX30 index may retest 13,500 points after closing Tuesday's trading session near 13,800 points, customer relations manager at Arabeya Online, Michael Mamdouh Naguib said. The index is likely to carry on the downward trend and break 13,500 points to see main support at 13,160 points, Naguib projected. He stressed that the upward movement recently seen by the local market was just a correction trend, adding that the EGX may maintain the negative performance in the medium-term. The EGX30 index could target 14,000 and 14,100 points if it breaks 13,800 points, Naguib indicated. For his part, Osama Naguib, head of technical analysis at Arab Finance Securities, said that the EGX30 index hovers around 13,400 points and is likely to move downwards. He noted that higher trading volume amid the bearish trend of the EGX is a negative sign in the meantime which could lead to further declines. The EGX30 has support at 13,400 and 13,150 points, Naguib highlighted, pointing out that sell-offs still weigh on the market if the index is below 14,800 points. Last week, the EGX finished the week at a lower level, amidst speculations about the CBE policy meeting decision. Benchmark index EGX30 declined 0.37% to 13,681.67 points, while the small and medium-sized enterprise index EGX70 settled 1.1% lower at the level of 695 points. The broader index EGX100 decreased by 1.27% to 1,737.98 points, and the equal-weighted EGX50 also fell 0.79% to 2,182.98 points. Naguib said that the EGX30 maintained a downwards trend on the medium run, with horizontal movements on the short term, and fluctuations between support and resistance levels. The same also goes for the EGX70, which is nearing the resistance level at 700 points, he added. Meanwhile, B Investments Holdings reported a 52.8% year-over-year rise in consolidated profits for the first nine months of 2018 (9M18). Net profit stood at EGP 147.84m in 9M18, compared to EGP 96.75m a year-ago, including minority shareholders' rights, the company said in a filing to the EGX. Standalone profits grew to EGP 56.4 million in the January-September period from EGP 35.5 million in the prior-year period. B Investments previously posted a 21% year-on-year rise in consolidated profits for the first half of 2018, registering EGP 112.07 million, versus to EGP 92.59 million in H1-17. In other earnings news, EFG Hermes Holdings posted a revenue of EGP 1.36 billion for the third quarter of 2018, compared to revenue of EGP 1.014 billion in Q3-17. Revenues for the marketing, insurance, and brokerage industry jumped by 128% year-on-year in Q3-18 to EGP 440 million, according to a statement. The non-banking financing sector maintained steady growth in Q3-18 by jumping 81% year-on-year with a turnover of EGP 286 million, the Egyptian investment bank said. Revenue from the non-banking sector made up 28% of total revenues in the three-month period ended September, compared to 19% in Q3-17, the company highlighted. The company's fees revenue surged by 79% to EGP 847 million, the statement added. “We are looking forward to continuing this strong achievement in the last months of 2018," CEO of EFG-Hermes Karim Awad commented. Awad added that the company's total revenue for Q3-18 surpassed EGP 1 billion, an annual growth of 24% “despite the simultaneous slowdown of the summer season and Eid al-Adha”. He also projected that the recently launched factoring activity will boost the company's financial results in the coming period. EFG Hermes also reported a 23.7% year-on-year drop in consolidated profits for the first nine months of 2018. The Cairo-based firm's profits retreated to EGP 767.16 million during the period starting January to September from EGP 1.005 billion in the year-ago period, according to a filing to the Egyptian Exchange (EGX). Standalone profits surged to EGP 190.8 million at the end of September from EGP 178.10 million in the corresponding nine-month period of 2017. Meanwhile, Orascom Investment Holding posted a 346% year-on-year hike in consolidated profits for the first nine months of 2018. The company logged EGP 1.07 billion in profits for the nine-month period ended September, versus EGP 239.9 million in the prior-year period, according to a filing to the Egyptian Exchange (EGX). On the other hand, the company's standalone profits eased to EGP 175.1 million at the end of September from EGP 296.7 million in the corresponding nine-month period of 2017. Orascom Investment previously announced it had turned to losses during the first half of 2018, suffering a consolidated loss of EGP 141.2 million, against profits of EGP 359.32 million in H1-17. As for the standalone business, the company had turned to losses with EGP 61.04 million in H1-18, compared to profits of EGP 367.7 million in the prior-year period. On Thursday, Telecom Egypt said its consolidated profits rose slightly during the first nine months of 2018 as compared with the same period last year. The telecom company recorded a net profit of EGP 3.51 billion in the nine-month period ended September, versus EGP 3.48 billion in the prior-year period, according to a filing to the Egyptian Exchange (EGX). Revenue surged to EGP 17.35 billion at the end of September from EGP 13.12 billion in the year-ago period. At the level of standalone business, the state-owned landline monopoly's logged an EGP 2.04 billion in profits, up from EGP 1.6 billion in the January-September period of 2017. Telecom Egypt previously posted a 4% year-on-year growth in consolidated profits for the second quarter of 2018, recording EGP 1.28 billion, compared with EGP 1.23 billion for Q2-17. In the first half of 2018, the company's net profit fell 18.2% to EGP 2.06 billion, from EGP 2.52 billion in H1-17.
