KEY THEMES
Globally, U.S. stocks gave up some of its gains the day before as investors began to reassess the knee-jerk reaction they had following news of a COVID-19 vaccine. This is why we recommended to be cautiously optimistic. Meanwhile, foreign investors in Egypt finally turned net buyers in the market yesterday, having been net sellers for so long through 2020 so far. Two takeaways we note from this: (1) as we said before, a Biden win will likely be positive for emerging markets (EM) in general and Egypt in specific being an EM itself, especially when the market is trading at half the valuation level of MSCI EM, and (2) if this happens, we should start seeing “the big shift” (that we alluded to early October) materialize with large caps outperforming small caps. Last night, MSCI barely changed Egypt’s constituents of its major indices, the most important of which is MSCI Global Standard Index, where all three stocks (CIB [COMI], Eastern Co. [EAST], and Elsewedy Electric [SWDY]) kept their places. This leaves only Oriental Weavers Carpet [ORWE] which was removed from MSCI Small-Cap Index, not much of an issue given foreign investors’ already-low trading activities in the market year-to-date.