2023-08-21 12:04:00
Expect banks to issue new savings certificates in January
Dubai – Al Arabiya.net
Posted on: August 21, 2023: 04:04 PM GST Last updated: August 21, 2023: 06:29 PM GST
Member of the Board of Directors of Elite Financial Consulting, Mohamed Kamal, said that the main Egyptian Stock Exchange index had reached the important and stubborn resistance point of the index at 18000 and 18050 points, which it has been trying to pass during the previous sessions for more than a week.
Kamal added in an interview with Al-Arabiya that the market lacks enthusiasm and strength to breach the 18,000 point strongly, and we can wait until the beginning of the fourth quarter of this year to see more motivating things for the Egyptian market to overcome the main point of resistance.
He said that what is strongly observed is the decline in trading volumes, which had averaged about 3 billion pounds per session, and now have declined to between 1 and 1.5 billion pounds. Although it was almost satisfactory, the market needs more.
Kamal mentioned that the stock market in any country is greatly affected by the economic and social situation, and there was speculation about a decrease in the exchange rate of the pound against the dollar and it was the main driver of the market during the previous period, because with the flotation in the previous times, the companies’ assets were re-priced.
He said, “We may see in the coming period or in the fourth quarter of this year the possibility of resorting to devaluation of the Egyptian pound – if there is no hard currency or dollar resources available, especially since this coincides with the return to negotiations with the International Monetary Fund, and this will be a great stimulus for the stock market.” In addition to working on the implementation of the government offering program and the state’s exit from the ownership of some banks, companies and economic entities, this is considered an incentive for the entry of direct foreign investments – whether from Arab countries or others – to the Egyptian market.
He added that if government banks offered new savings certificates with distinct returns, they would be a strong competitor for investment in the stock exchange, but they generate a return without risk, and he expected it to range between 20 and 25%, like the certificates that were offered at the beginning of last year and are due next January, and their returns will be large. And if banks offer certificates with distinct returns, they will be a strong competitor to the Egyptian Stock Exchange, especially since the return in the certificates is without risk.
He ruled out that the central bank would raise interest in the coming period, but the excess liquidity in the market will be absorbed through banks issuing certificates with attractive returns.
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