The Egyptian Exchange (EGX) is forecast to see a calm trading session with a possible decline in the last day of the year, after the Central Bank of Egypt (CBE) maintained interest rates, a decision that was disappointing for investors, according to analysts.
On Thursday, the CBE’s Monetary Policy Committee (MPC) kept overnight deposit and lending rates at 18.75 percent and 19.75 percent, respectively, while the average overnight EGP Interbank rate was kept at 18.974 percent and the main open market operation fixed rate was held at 19.25 percent.
Despite the optimism that investors had prior to the CBE statement
Prior to the CBE’s decision, investors were optimistic as they expected the central bank to cut interest rates; however, the decision came as a disappointment for many, commented analyst Michael Mamdouh Naguib.
Many stocks were negatively impacted recently because of the high interest rates, the analyst said.
He forecast that Sunday’s trading session would see some declines amid relatively calm trading, indicating that the sessions following the New Year holiday will see trading levels return to normal.
Analysts Sameh Gharib from Roots Stock Brokerage House and Saeed El Fekky agreed with Naguib, projecting that the EGX will see an improved performance in 2018, particularly after foreign investors conclude their Christmas and New Year’s holidays and return to the market.