By Samir Al Khoury
Egypt has finalized its largest foreign direct investment deal to date with the Emirati company ADQ, committing to invest $35 billion in the development of the city of Ras El Hekma.
Morgan Stanley suggests that the Ras El Hekma deal sets the stage for the flotation of the pound and the fulfillment of the International Monetary Fund agreement. Meanwhile, Goldman Sachs predicts that this agreement will help address Egypt’s financing shortfall for the next four years.
On a different note, the International Monetary Fund has reported significant progress in its discussions with Egypt.
Consequently, the overall outlook for the Egyptian economy seems somewhat optimistic, with analysts anticipating a substantial influx of foreign currency in the upcoming months.
The Egyptian pound also improved against the dollar in the parallel market, reaching 50 pounds per dollar after previously recording more than 60 pounds per dollar. Egyptian bonds and stocks also rose.
The real estate sector was the main support for the rise in the Egyptian Stock Exchange, as the share price of Talaat Mostafa Holding Group, the largest real estate company by market value in Egypt, recorded 73.49 pounds, the highest level ever.
It is worth noting that Egypt has suffered for nearly two years from high inflation, which recorded a rate of 29.80% in January 2024, which is a lower rate than expectations (32.50%) and the previous reading (33.70%), in addition to the scarcity of the US dollar.
The main index EGX30 has risen about 18% since the beginning of the year until today. The Egyptian Stock Exchange is witnessing sharp fluctuations at this stage, as the EGX30 index recorded 30,696 points on January 31, 2024, which is its highest level ever, only to return and decline to 26,459 points the next day. It is currently trading at 30,000 points. But despite these large fluctuations on the EGX30, the technical indicators are still somewhat supportive of it.
Firstly, the GOLDEN CROSS between the 50-day moving average at approximately 27,032 points and the 200-day moving average at 21,628 points is still prevailing, indicating an upward trend for the EGX30 index.
Secondly, the Relative Strength Index records 58 points, which is a level exceeding 50 points, which indicates 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.
Taurex is the trading name of Zenfinex Global Limited, Stochastic Africa SL Ltd, Zenfinex Global LLC, and Zenfinex Limited.
Zenfinex Global Limited is registered in the Republic of Seychelles with registration number: 8428731-1 and is regulated by the Financial Services Authority of Seychelles (license number SD092). Its registered office address is F20, 1st Floor, Eden Plaza, Eden Island, Seychelles.
Stochastic Africa (SL) Limited is a company registered in Sierra Leone with Company Number: SL270319STOCH05271 and is licensed by the Bank of Sierra Leone under license number BSL/SAL/2023 and with the registered office at 148D Wilkinson Road, Freetown, Sierra Leone.
Zenfinex Global LLC is a company registered with the Financial Services Authority in Saint Vincent and the Grenadines under registered number 138 LLC 2019. Its registered office is Hinds Building, Kingstown, Saint Vincent, and the Grenadines.
Zenfinex Limited is a company registered in England and Wales under registered number: 11077380. Authorised and regulated by the Financial Conduct Authority under firm reference number 816055. Its registered office is 4th Floor, 4 Eastcheap, London, EC3M 1AE, United Kingdom.
*All trading involves risk
