Weak purchasing power remains the biggest challenge for the Egyptian stock market at the current time, pending any positive news or stimuli to open dealers' appetite to trade a gain. Mohamed Osman, Head of Technical Analysis at Pharos Holding, said that in case the purchasing power failed to drive the Egyptian Exchange (EGX) above the level of 11,288 points once again, the market would be vulnerable to further decline. "Meanwhile, we believe that the support area lies between 11,100-11,200 points, which should resist any further selling pressure," Osman added. According to the current performance and the weakness of purchasing power, Osman said that Pharos Holding's conservative point of view remains intact, until a consistent purchasing power reappears. As a result, a rebound off the latter levels should be seen as a chance to reduce exposures at relatively better levels. Osman noted that the first resistance level lies at 11,500 points, followed by 11,675 points. Last week, the benchmark index EGX30 closed at 11,261.35 points, recording a decline of 0.64%. The EGX70 EWI posted a 1.24% gain, concluding the period at 2,212.85 points, while the S&P index declined by 1.44% to conclude the period at 1,869.19 points. The EGX30 Capped declined by 0.89%, to conclude at 13,781.59 points, while the EGX100 EWI rose by 0.77% and concluded the period at 3,223.36 points. Total market capitalisation reached EGP 688.6bn last week, representing a decrease of 0.19% over the week before. The total value traded recorded EGP 32.1bn, while the total volume traded reached 3,116 million securities executed over 206,000 transactions last week. For the previous week, the total value traded recorded EGP 17.6bn, while the total volume traded reached 3,346 million securities executed over 239,000 transactions. Stocks trading accounted for 28.7% of the total value traded of the main market, while the remaining 71.30% were captured by bonds over the last week. Egyptians represented 84.6% of the value traded in listed stocks after excluding deals during the period, whilst foreigners accounted for 10.3%, while Arabs captured 5.1%. Foreigners were net sellers, with a net of EGP 95.0m, and Arabs were net buyers, with a net of EGP 56.1m, after excluding deals in listed stocks. Since the beginning of the year, Egyptians have represented 84.6% of the value traded in listed stocks after excluding deals, whilst foreigners accounted for 8.8%, and Arabs captured 6.6%. Foreigners were net buyers by EGP 53.1m, and Arabs were net buyers with EGP 237.0m, after excluding deals in listed stocks since the beginning of the year.
