KEY THEMES
U.S. equities kicked off 2022 yesterday with obvious optimism, shrugging off concerns about COVID-19 and its variants. Also, European equity markets rose, syncing with the overall global equities upbeat sentiment. Consequently, Asian shares were broadly up on Tuesday.
Elsewhere, Egypt’s exports in September 2021 have shown strong y/y growth, reaching USD3.45bn vs. USD2.53bn (+37% y/y). We note that the contribution of fertilizers to total exports during the period jumped to 4.6% vs. 3.3% a year earlier. This was due to a number of factors including the exceptional performance of fertilizer prices during 2021, in addition to higher global natural gas prices. We note that urea prices rallied even more during Q4 2021, which is not captured in CAPMAS monthly bulletin trade data yet. Furthermore, this promises a stellar earnings performance in the last quarter of 2021 for EGX-listed fertilizers, mainly Abu Qir Fertilizers' [ABUK] (Overweight, 12M PT EGP31/share, +46%) and Misr Fertilizers Production (MOPCO) [MFPC].
On the corporate news side, Al Baraka Bank’s [SAUD] (Overweight, 12M PT EGP25.6/share +75%) BoD held on 29 December 2021 has ratified the bank’s budget for 2022. SAUD has budgeted a net income of EGP1.4bn with an ROE of 20%. We note that that the bank is currently trading at an undeserving P/B of 0.55x, given its ROE profile.