Mubasher Trade raises EGX30’s price target to 17,700

CAIRO – 3 April 2018: Mubasher Trade raised the price target for the benchmark of the Egyptian Exchange EGX30 to 17,700 with an increase of 6.6 percent, a recent report remarked.

The research unit outlook for EGX is led by three main drivers: the upcoming expectations of lowering the interest rates, the rebound of the initial public offerings (IPOs), and the government’s selected focus on the health care sector.

The report clarified that the Central Bank of Egypt has cut the interest rates twice since the beginning of 2018, with expectations to lower the rates again from 2 to 3 percent through the current year.

The Monetary Policy Committee (MPC) of the Central Bank of Egypt lowered the interest rates for the second time this year by one percent on Thursday.

The committee set the overnight rate, and the overnight lending rate, at 16.75 percent and 17.75 percent, respectively.

In February, the MPC lowered the interest rates by 1 percent for the first time since the flotation of the Egyptian currency in November 2016 after inflation rates slowed down.

The state program to float around 23 companies’ shares on the Egyptian Exchange should rebound the IPO market, the report said.

It also referred to B investment IPO as the first state company to be floated with yields of $1.2 billion.

The Initial Public Offerings (IPO) program is conducted under the supervision of the Ministry of Investment, under a five-year program announced in 2016 to attract investment and invigorate the stock market.

The Egyptian government elected 23 state companies for the first phase of the state IPO program, with a total shares value amounting to LE 80 billion.

Market value of the soon-to-be-listed companies that the government intends to float stands at LE 430 billion, about 15-30 percent of the companies in the Egyptian Exchange (EGX).

Mubasher Trade added that the health care sector will be one of the beneficiaries in 2018 with the introduction of Universal Health Care Act.

The Universal Healthcare Act proposes the implementation of an incorporated database for all insurers; which will allow subscribers to decide the most suitable institution to be treated at, instead of being forced to below par clinics.

The benchmark EGX30 rose 0.50 percent during Monday’s session, or 88.78 points, to end at 17,684.66 points.