By the end of last Thursday’s session, the red color dominated the screens of Arab and Gulf stock exchanges and financial markets, affected by the decline that affected global stock exchanges, to return to gains again at the end of the week’s trading..
On Friday, Saudi Arabia announced the easing of the precautionary measures taken by the Kingdom in the decisions issued during the month of February 2021, and the suspension of some measures, while some restrictions continue.
The decision stipulated not to extend the precautionary measures mentioned by stopping all entertainment activities and events, closing cinemas, indoor entertainment centers, and independent indoor games venues, or those in restaurants and shopping centers, and the like and gyms of sports centers, and providing internal ordering services in restaurants, cafes and the like, As of tomorrow, Sunday, with the exception of some procedures.
Ayman Fouda, head of the Financial Markets Committee of the African Economic Council, said that the rises recorded by global markets, especially the American ones, predicted that the next would be better for the Arab markets, which was confirmed by the news received about the approval of the stimulus package that many world investors were anticipating..
Fouda expected that the region’s stock exchanges will witness some collection and selective buying in light of the return of optimism about ending the precautionary measures in a major country such as Saudi Arabia, so that the end of these measures will send the spirit of optimism to stock market dealers with the beginning of the return to normalcy in the region, which raises individuals’ appetite for risk by pumping liquidity New.
With the succession of measures to return to normal life, the doors will open for the return of the activity of the various sectors of the economy, including tourism, aviation, trade exchange and transfers from abroad, as Egyptians gradually return to work in the Gulf region, according to Fouda.
In turn, Noureddine Mohamed, president of Target Investment Company, suggested that the risk appetite will return to all global markets after the precautionary measures were eased, the factories and companies returned to production, and the trade and aviation movement resumed at their pre-pandemic rates, which appeared on the prices of raw materials and production requirements recently..
He added: We have seen a reflection of this on oil prices that exceeded $ 66 a barrel, which is considered a prelude to the rise of markets to new levels, unless there are individual obstacles from each country separately, including unstable taxes and laws.
The head of the Target Investment Company said that prices on the Egyptian Stock Exchange had reached low levels in relation to the fair value of shares, which he considered “an opportunity to build new centers.”.
For her part, Asma Ahmed, a market analyst at the “House of Money Consulting”, said that raising most of the precautionary measures taken to limit the spread of Corona, in addition to OPEC and allies extending production cuts until April, which rose oil prices for the first time in 14 months near $ 70 a barrel. The Saudi market will pay to target 9,400 points.
A market analyst at “Bayt Al-Mal Consulting” suggested that the Saudi market index will rise with the support of the basic materials sector, including petrochemical and cement stocks, which will be the most prominent beneficiaries during the coming sessions..
For his part, Mohamed Hassan, Managing Director of “Blom Egypt for Financial Investments”, explained that the precautionary measures are among the most important factors affecting the financial markets in the countries of the world.
He added: “The more precautionary measures are relaxed, the investor’s appetite increases, and optimism prevailed that there will be a new rise during the summer period and fewer cases of corona infection with the onset of high temperatures, in addition to the vaccination of citizens with the new vaccine.”
He pointed out that after the decline in the markets, especially the Egyptian one, as a result of the index reaching a resistance zone, and a further decline is expected to the level of 11200-10800 points, to be the strongest opportunity to buy during the next stage before the rise again, advising investors to take advantage of the decline in the formation of new positions without concern.
Asim Mansour, an economic analyst, said that the increasing confidence of citizens and business owners in the effectiveness of the vaccine is one of the most important reasons for the appetite for risky assets, especially the stock market, to obtain a greater return.
He added that the declines recorded in the Egyptian market were due to the pessimism that prevailed in the markets from the postponement of the offering of more companies, which were postponed after the exacerbation of the Corona crisis and the lack of liquidity in the market, as well as the weak results of companies’ profits and the increase in the rate of purchase on margin during the last period, which led to activation. Margin “for many dealers due to the market downturn.
Mina Rafiq, Research Director at Al-Marwa Securities Brokerage Company, believes that the Egyptian Stock Exchange is still witnessing a great risk in speculative stocks, unlike the leading stocks that have not yet expressed their fair value, especially with the season of business results and dividends.
Rafiq expected the return of selective buying of shares with that news, starting next week.
Ayman Al-Zayat, an analyst in financial markets, said that the easing of the precautionary measures will enhance the positive performance of the Saudi Stock Exchange so that its main index, “TASI”, will surpass the level of 9300 points.
Al-Zayat pointed out that the Egyptian Stock Exchange, after poor performance during the week, lost most of the shares between 10 and 30% of their value without any reason or justification, amid the rise of all global and Gulf stock exchanges.
Doaa Zaidan, a financial market expert at Tycoon Securities Brokerage, said that the main index of the Egyptian market is still trading in a sideways direction between the level of 11100 to 11,650 points with medium liquidity levels.
She added that the market is waiting for more incentives for the industrial sector to support companies and direct attention to the tourism sector in light of the anticipation for the return of Hajj and Umrah trips and the summer season, which will increase their revenues..
In turn, Ihab Yaqoub, director of the Guaranty Trading Company, indicated that reassuring the investor is the most important component of investment and the Egyptian Stock Exchange is an inseparable part from that, as reducing the procedures, returning life to normal, and canceling the precautionary measures will increase the market’s heights and stability..
Tamer Al-Saeed, a money market expert and director at CI Capital for securities brokerage, believes that the main index of the Egyptian Stock Exchange has completed the correction process, but it may return to the occasional situation in the coming days to approach the strongest resistance at 11700 points in light of the positive news such as the continuous easing of measures. Precautionary measures and other important news such as government proposals, as well as the continuous decreases in interest rates and the return of foreign investments.
Al-Saeed advised not to be afraid in moments of decline and give up on stocks with high book value and low market values, on the contrary, to buy stocks that have fallen by large percentages, as well as to control greed in moments of rise.
In the same context, Ahmed Abu Al-Yazid, a senior technical analyst at Premier Securities Brokerage, said that this positive news, in conjunction with the analysis of the time factor of the Egyptian Stock Exchange, pushes the trend towards the end of the accidental correction of the decline that began since the end of last January during the second week of March. The upward movement will resume starting from the third week.
Abu Al-Yazid advised investors to choose stocks that outperform the main index of the Egyptian Stock Exchange in performance and adhere to flexibility in trading with strict capital management..