Today’s Trading Playbook
We mentioned yesterday in our Trading Playbook how the EGX30 and the EGX70 EWI have lost ytd around 25% and 23% of their values, conforming with anti-equities mode in global markets, which cast its shadows over the EM world, as MSCI Emerging Markets index was down ytd yesterday around 19%. We mentioned that such market is not by any means traders’ haven due to bad liquidity conditions and risk off positioning by long term investors. We re iterated our view that we mentioned in our annual strategy note STANDPoint published on 30 January 2022 that the Egyptian stock market is home to mergers & acquisitions (M&A) activity at such low valuation levels. With that in mind the EGX30 has slipped another 3.59% on Monday, bringing ytd slippage to 27.3% and bringing us at our lowest levels since November 2016 when the floatation took place. We continue to believe that stock individual stories will have minimal impact on the general sentiment, since the focus is turned to the general macro variables of the country. Hence, a very useful tailwind to sentiment in this scenario will be a successful sealing of a deal with the IMF, which has been in talks since March 2022.
Now, on to the top news and analysis for the day.