KEY THEMES
The jump in Egypt's real GDP growth rate to 7.7% in Q4 FY21 has both quantitative and qualitative intuition. Quantitatively, it's due in part to the base-year effect where Q4 FY20 had shown a contraction of 1.7% with the onset of the COVID-19 debacle. Qualitatively, it is a multi-sector growth driven by sectors that had suffered a year ago (e.g. hospitality, manufacturing, construction, natural gas, and electricity) and other sectors that maintained their growth (e.g. telecom, Suez Canal, real estate, retail & wholesale, transport & logistics, agriculture, health care, and education). According to the Cabinet, consumption grew exceeded its pre-COVID-19 levels by 15% in Q4 FY21.
Such an economic recovery is not fully reflected in the stock market, namely large caps, many of which we have alluded to over the past period. We remind you of 12 of those names we like: Abu Qir Fertilizers [ABUK], B Investments [BINV], CIB [COMI], Credit Agricole Egypt [CIEB], EFG Hermes Holding [HRHO], Elsewedy Electric [SWDY], Emaar Misr for Development [EMFD], Orascom Construction [ORAS], Orascom Development Egypt [ORHD], Palm Hills Developments [PHDC], Telecom Egypt [ETEL], and TMG Holding [TMGH].