KEY THEMES
When asked which direction the EGX 30 would be heading over the coming period, one has to first answer the question “What will be CIB’s [COMI] stock?” At our current 12M price target of EGP83/share, EGX 30 index would move by 13% to just above 12,400—a level we last saw early March 2020 before the pandemic came upon us. But an important caveat is “ceteris paribus” (meaning assuming all other EGX 30 components do not change in either direction). However, we all know that change is the norm. For the time being, we envisage three key market drivers: (1) a potential reduction of energy prices by the Egyptian government for energy-intensive industries, (2) continued multi-sector mergers and acquisitions activity accelerated by the pandemic, and (3) new EGX listings. The latest news suggest that e-Finance, the state-owned e-payment provider, could be floated on EGX in Q1 2021. Today, we read news about a potential dual listing of Egypt-based lab operator Integrated Diagnostics Holding [LSE: IDHC] which has a current market cap of USD577.5mn, having gone public on the London Stock Exchange back in May 2015. Otherwise, investors would need to sift through the remaining Q3 earnings reports that are yet to come out, the most outstanding of which would be made by COMI, Elsewedy Electric [SWDY], Cleopatra Hospital [CLHO], Ezz Steel [ESRS], and Qalaa Holdings [CCAP]. Speaking of which, Orascom Construction [ORAS] just reported its Q3 results this morning, recovering off a weak Q2.