Today’s Trading Playbook
KEY THEMES
Tomorrow marks the deadline for EGX-listed stocks to report their CQ3 2021 earnings—a supposedly busy time for the market. Over the weekend, Commercial International Bank (CIB) [COMI] reported a strong set of results, marking an all-time high quarterly net profit of EGP3.8bn. Please read our comment on the results here, where we tracked critical historical KPIs on a quarterly basis. Having risen by 45% since hitting a 52-week low of EGP36.53 on 17 June 2021, COMI has recovered by 45%. We rate it as Overweight, still having 17% upside.
Also over the weekend, MSCI announced its Semi-Annual Index Review (SAIR), where the three EGX-listed stocks in the MSCI global standard index for emerging markets were retained—as expected, namely COMI, Eastern Company [EAST], and Fawry [FWRY]. However, the MSCI global small-cap index saw only one action: the removal of Madinet Nasr Housing & Development [MNHD], which becomes effective on 1 December 2021. Thus, we could see its share, which rose 11.6% last Thursday, pulling back.
Also, ETEL rose last Thursday, coinciding with its earnings release, but it remains to be seen whether such performance was driven by the earnings report or speculation regarding Vodacom’s [SA: VODJ] acquisition of Vodafone Group’s [UK: VOD] 55% stake in Vodafone Egypt [VODE] which is 45% owned by ETEL. Whether ETEL will exercise its right of first refusal or to tag along will be key to its stock performance. We believe ETEL is worth at least EGP22.5 as highlighted in our TAKEStock note published on 8 June 2021.
POSITIVE: COMI, ETEL.
NEGATIVE: MNHD.
Now, on to the top news and analysis for the day.