Today’s Trading Playbook
KEY THEMES
The EGX 30 is currently on a bit of a lucky winning streak, closing in the green territory for six consecutive sessions. We note that this is the second longest positive streak this year. The longest winning streak this year lasted for seven consecutive sessions and took place between 15 March and 23 March 2022. However, despite the EGX 30 moving upward by as much as 5.2% since 5 July 2022, its forward P/E is still too low at 5x, offering an earnings yield of 20%.
Reasons for the latest movement could be summarized in light of: (1) Stocks were dipping to steep oversold territories; (2) Continuous weakness in the EGP, with the FX rate now at EGP18.94, and (3) More tactical momentum from M&A activity. We believe such market movements are part of a much deeper move, which will see fundamentals finally prevailing, given a gradual shift in investor sentiment towards risk assets to hedge their bets against mounting inflation.
Now, on to the top news and analysis for the day.