1. Today’s Trading Playbook
Amr Hussein Elalfy CFA | Head of Research
KEY THEMES
For the fourth day in a row, both EGX 30 and EGX 70 EWI extended their losing streak, down respectively by 1.9% and 8.1% since 25 February and 1.1% and 6.1% so far in March. Such a performance indicates a pullback in small-cap stocks that have outperformed their large-cap counterparts. Geopolitical tensions as well as leveraged retail investors are probably to blame. At such volatile times, we remind our clients of our call that large caps are the best bet for now. So far since we published our STANDPoint note, our short ideas (average +2.0%) have outperformed our long ideas (average -1.3%). But again, it’s too early to tell where we will end the year. We believe, however, that sticking to stocks of companies with strong fundamentals is always the safest bet in the long term.
For a run on where stocks trade in terms of multiples, always refer to our Latest EGX Valuation Multiples updated daily under Section No. 5.
positive
ETEL: Telecom Egypt [ETEL] is one of the large caps that we like. Following strong Q4 2020 results, the stock is still lagging behind. News of launching a new subsea system along with the Egyptian government’s push to fast-track its Digital Transformation and Digital Egypt projects should bode well for ETEL.
Now, on to the top news and analysis for the day.