Today’s Trading Playbook
KEY THEMES
Both of the EGX 30 and EGX 70 EWI ended yesterday on a mixed note – a scene we rather used to see since mid-2020 – but with a small tweak: The EGX 30 was the favorite yesterday. Despite closing in the green territory, the EGX 30 closed way off its intraday high of 11,468.24 at which level it was up by some 2.6%. Meanwhile, the EGX 70 EWI closed near its intraday low. Given yesterday’s performance, the two indices ytd performance is +3.8% and +5.4% for the EGX 30 and EGX 70 EWI, respectively. The ytd performance has witnessed a massive change since e-finance’s [EFIH] IPO. To put it into perspective, just at the beginning of October, the ytd performance for both indices was -3.0% and 27% for the EGX 30 and EGX 70 EWI, respectively! This is something we insinuated in many of our Trading Playbooks, the most recent of which was our Trading Playbook dated 12 October 2021. Given what is left in 2021, we tend to think that the EGX 30 should continue to prevail, as investors started to believe the upcoming IPOs will attract rather than suck liquidity out of the market. As of now, the EGX 30 is currently traded at 2022e P/E of only 7.0x, implying an earnings yield of 14.2%.
Now, on to the top news and analysis for the day.