The CBE’s decision to cut interest rates by 50bps should not much of a trigger to the overall market in the coming days. What the market awaits is not a move on the monetary side but rather the fiscal side. At this point, the key market driver in our opinion would be a revisit of energy prices. We would prefer that the government, instead of cutting energy prices every six months or so, would rather set an economic formula for each industry to ensure sustainable growth. For instance, aluminum manufacturers should be charged for electricity at a rate commensurate with aluminum prices, fertilizers manufacturers should be charged for natural gas at a rate commensurate with urea prices, etc. We believe the benefits from cutting energy prices in absolute terms would only be short-lived because it will need to always be revisited, and the manufacturing sector may not have the luxury of time to wait.
Meanwhile, companies continue to report their Q3 results. Today is technically the deadline for quarterly results (the quarter ended September for those companies whose financial year does not end in June). Still, the markets await CIB [COMI] results which are pending a review process, which we do not expect to be an issue for the bank in the long term.