By Samir Al Khoury,

The Egyptian main index, EGX30, rose to 30,174 points yesterday, marking its highest level since March 18, 2024, before closing at 30,141 points. The index has also increased by about 25% since hitting its lowest point on May 1, 2024, when it recorded 24,192 points up until yesterday’s close. Based on this performance, the EGX30 index can be considered to be in a bull market.

Despite the significant volatility experienced by the Egyptian Stock Exchange since the beginning of the year, and although the EGX30 reached an all-time high of 34,501 points on March 11, 2024, before undergoing a notable decline, the index is still up by approximately 21% since the start of the year.

The Central Bank of Egypt kept interest rates unchanged at 27.25% during its meeting last month, aligning with analysts’ expectations. Egypt’s consumer price index decreased on an annual basis in July, recording 25.70%, which is below the expected 26.60% and the previous reading of 27.50%. However, the index remains significantly above the Central Bank of Egypt’s target inflation rate of 2%. Despite this, the real interest rate has turned positive, with the gap between the nominal interest rate and the inflation rate now approximately 1.50%. This may prompt the Central Bank of Egypt to either maintain interest rates at their current level for an extended period or begin reducing them in the near future.

Egypt’s foreign exchange reserves increased in July, reaching approximately $46.49 billion, which is higher than the previous figure of $46.38 billion.

Technical indicators suggest that the EGX30 index may continue to be supported in the coming period for several reasons:

• Firstly, the alignment of the 20, 50, and 200-day moving averages, all trending upwards, with the 20-day average above the 50-day average, and the 50-day average above the 200-day average.

• Secondly, the Relative Strength Index (RSI) stands at 65 points, indicating positive momentum for the EGX30 index.

• Thirdly, the MACD indicator (blue) is crossing above the Signal Line (orange) in the positive zone, providing further positive momentum for the EGX30 index.

Please note that this analysis is provided for informational purposes only and should not be considered as investment advice.

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