Today’s Trading Playbook
KEY THEMES
Performance differential between EGX 30 and EGX 70 EWI was yet again present in Wednesday’s session, as EGX 30 extended a 2-day winning streak, whereas EGX 70 EWI continued a 2-day losing streak. Ending on a mixed note for two days in a row brought the year-to-date performance gap between the two indices to negligible readings. On a ytd perspective, EGX 30 is now up 4.78%, which is compared to 4.84% for EGX 70 EWI, bringing the spread between the two indices performance to only 6bps. We remind you that just before October, the spread between the two indices performance was a staggering 2,995bps!
Here’s an interesting statistic: Throughout 2021, we had 198 trading sessions, where in 29% of the time, we had divergence between the two indices closing status. When divergence occurred in 2021, EGX 70 EWI was the favorite index in 57% of the time. However, taking a step back, looking at 2021 (except for October), we find that out of 181 trading sessions, we had 28% with performance divergence, yet EGX 70 EWI was the favorite in 65% of the time, compared to 57% during 2021 so far.
Elsewhere, today is the MPC day. Mounting inflation has been a hot topic lately, not just from a national standpoint, but also globally. However, we still think that it continues to be caged within the CBE announced targets, and thus limiting the chance for a shift in monetary policy stance, at least for the rest of 2021. Hence, we expect the CBE to keep interest rates unchanged in today’s MPC meeting.
Now, on to the top news and analysis for the day.