KEY THEMES
Fitch Ratings has affirmed CIB’s [COMI] long-term issuer default rating at 'B+', while removing the ratings from rating watch negative (RWN). COMI stock performance lately reflects soothing selling pressures given the colossal declines the stock witnessed since last March.
The stock is currently confronting with its best levels since last June 2020, with a P/B of 1.9x, well below its long term historical average. Meanwhile, so far in H2 2020, COMI was responsible for moving the EGX30 381 point in the green direction. We note that the trading range between COMI and its GDRs has been subdued after a wild range achieved last March.
The bank’s results so far in 2020 showed healthy growth in net interest income, with credit provisions as well as effective tax rate being the two strong disrupters to bottom line growth. Given that we didn’t get a significant deterioration in credit worthiness out of COVID-19, we think COMI’s H2 2020 will be enough booster to the stock performance for reverting back to a more normal trading multiples.