KEY THEMES
In line with our expectation and market consensus, the Central Bank of Egypt’s Monetary Policy Committee (MPC) opted to hold policy rates unchanged. Our chief economist Mona Bedeir spelled out last Thursday the rationale behind the “hold” decision from her point of view, be it locally driven (with inflation still anchored around the CBE’s target) or globally driven (with higher global commodity prices adding more pressure on other EMs to raise rates).
Meanwhile, we think the government’s push to stimulate the manufacturing sector targeting exports should bode well for certain EGX-listed companies. With the government adding automotive, ceramics, and pharma, we could see interest building in some names, such as EIPICO [PHAR], GB Auto [AUTO], Lecico Egypt [LCSW], and Rameda [RMDA] – all in alphabetical order.
POSITIVE
AUTO, LCSW, PHAR, RMDA: All could benefit from the government’s move to support the manufacturing sector.