Karim Saeed, The Egyptian Society of Technical Analysts (ESTA), said that Egyptian Exchange (EGX) benchmark index EGX30 is facing a new support level at 7330-7270 points, during this week’s trading. If it managed to resist above this level, it is expected to bounce higher reaching resistance level near 7700 points.
In a statement to MEO, Saeed said that drug market stocks will likely revitalize, following a governmental approval to increase medication prices. This decision comes on the back of a call by Chamber of Pharmaceutical Industries and many factories to raise prices after pound devaluation against dollar, and subsequent hike in exported raw material costs- which represent 95 per cent of drug manufacturing in Egypt.
Many factories had to suspend their production for the past few months due to high expenses, Saeed noted. This has resulted into a sharp pharmaceutical shortage, as nearly 1500 types of drugs disappeared off shelves, 370 of which have no substitutes. That’s why, it is normal for the higher prices announcement to sustain performance of drug market stocks in the coming period.
As for the index of small and medium stock EGX70, it remains focused on the previous support level near 363 points, and in case it survived above this, it is expected to re-face a resistance level at 372 points.
During last week’s trading, EGX lost nearly EGP 3bn, as market capitalization of over-the-counter listed shares closed at EGP 401.9bn, with a 1 per cent drop from last week.
