The EGX is expected to play a significant role in drawing increased Arab and Gulf capital. This is already evident as many Arab investors re-evaluate regional markets, diverting some investments to the EGX. This shift explains the substantial purchasing demand from Arab and Gulf investors last week. Emam noted that this incoming capital will be selective regarding companies, which is a positive sign and will ultimately impact the performance of the main index, the EGX 30.
Emam predicted a clear difference in investment approach
between local and Arab/Gulf investors, leading to a change in the composition
of investor categories on the EGX.
He noted that the recent rally and positive sentiment on the
EGX are an extension of the market's momentum since the start of 2025, which
appears likely to continue until the end of December.
Emam confirmed the market's upward trend is driven by
inherent promising investment opportunities. This trend persists despite
earlier corrections, as investors build new positions, moving away from stocks
that already hit record highs and surpassed their fair values.
Blue-chip stocks have played a vital role in pushing the EGX
30 to historic, record highs, with further record levels anticipated. He
pointed out that Commercial International Bank (CIB) still has price targets
yet to be reached, which will positively affect the main index. Other companies
and banks in the sector also hold significant investment potential.
Promising sectors in the market:
Emam expects the Banking sector to be the final leader in
terms of performance and indicators for 2025 market closure, followed by the Real
Estate sector. He specifically highlighted Talaat Moustafa Group Holding as
potentially undergoing a "new shape" and exhibiting different
performance, suggesting its current price does not reflect its true value. Many
other real estate stocks are also still undervalued.
The Information Technology sector is also expected to
contribute significantly to positive market performance. Emam concluded that
the Egyptian market is promising with more opportunities, emphasizing a
noticeable selective buying trend among both individual and institutional
investors.
Emam highlighted the strong shift of Arab investors towards
buying Egyptian stocks recently, contrasting with local investors who are
currently booking profits. He noted that local investors often anticipate a
sharp correction or selling pressure from investment funds near year-end, leading
many retail investors to secure liquidity and close out margin positions before
December ends.
Positive Egyptian economic outlook:
The Egyptian market remains attractive to capital in the
Arab region due to its investment opportunities compared to other markets, with
many companies still trading well below their actual valuations.
Emam pointed to daily positive indicators in the Egyptian
economy, suggesting the country is moving out of the contraction phase, which
will have a positive impact on the private sector.
He maintained strong conviction that Egyptian economic
indicators are witnessing and will continue to see tangible improvement, citing
reports from the IMF and World Bank. The tourism boom, expected to continue, is
significantly boosting economic indicators, particularly foreign currency
supply. Tourism has largely compensated for the sharp decline in Suez Canal
revenues due to recent regional political crises.
Furthermore, expected future interest rate cuts by the
Central Bank of Egypt will directly and positively impact the economy. He noted
the recent strong performance of the non-oil private sector index, which is
expected to be followed by a sharp drop in unemployment rates and a noticeable
increase in purchasing power, benefiting macroeconomic indicators.
Consequently, Emam believes that foreign and Arab investors will increase their presence in Egypt, whether by acquiring existing projects or investing in the Egyptian Exchange.