Today’s Trading Playbook
Amr Hussein Elalfy CFA | Head of Research
KEY THEMES
A new trend seems to have been evolving these days on the Egyptian Exchange (EGX). The cheaper Egyptian assets become, the more buyers we have, and those buyers are not just institutions or private equity firms. More recently, we have seen many high net worth individuals—for one reasons or another—buying stakes as large as 5-10% of listed companies. We have seen those high net worth individuals interested in banks, non-banking financial services, real estate, and consumer, adding to existing stakes they may have had or building new positions altogether in what they think are promising yet undervalued stocks.
We believe this trend will continue stepping into the New Year, especially with the onset of new initial public offerings (IPOs) coming to market. As we mentioned before here, there are few listings that could come our way in 2021. Yesterday, two more (military owned) companies were added to the list, namely Safi (the water bottler) and Wataniya Petroleum (the gas station operator). Please see below in the news section for a link with more details. At the end of the day, it's not just about the number of new IPOs we have in the market; we need investor diversity. With foreign investors having been net sellers throughout the past year or so, we hope the new listings on the EGX will bring new blood to the market and will bring about that investor diversity.