Today’s Trading Playbook
Amr Hussein Elalfy CFA, Head of Research
KEY THEMES
We think the market is poised for another positive week. Last week, EGX 30 rose 2.0%, paring its ytd loss to 20%, while EGX 70 added yet another 2.6%, further extending its ytd gain to c.34%. In view of Egypt’s resilience in the face of COVID-19 and the seemingly improved situation in Libya, we believe the geopolitical risk is somewhat alleviated. Hence, we believe the overall scene is conducive to the market extending its positive performance over the coming days. But it is large caps (e.g. EGX 30) that should drive the market, having been lagging behind so far into the year. This will be made possible as non-Arab foreigners are attracted back into the market.
POSITIVE
Large caps: Except for Telecom Egypt [ETEL], the following large caps are down for the year between 16-38%: CIB [COMI], Eastern Co. [EAST], and EFG Hermes Holding [HRHO]. We believe they would be amongst the first to benefit off revived interest of foreign investors. Elsewedy Electric [SWDY], meanwhile, which just reported this morning higher earnings q/q in Q2 2020, may continue to lag a bit until we see a y/y recovery.