KEY THEMES
In line with our call yesterday, the market’s intraday dip quickly recovered with the EGX 30 ending the day higher, turning from an intraday loss of 0.8% to a gain of 0.5%. This was reflected in an intraday v-shaped performance. We had said that any sell-off should be considered an opportunity to accumulate on good names. Any negative sentiment related to the global money-laundering document leaks was more than offset by the positive sentiment related to the potential reduction of energy prices, including natural gas. Hence, we saw Ezz Steel [ESRS], Abu Qir Fertilizers [ABUK], and Sidi Kerir Petrochemicals [SKPC] continue their positive performance. We had mentioned these three names exactly one week ago here. Meanwhile, if the Central Bank of Egypt (CBE) keeps interest rates unchanged tomorrow, we believe the tone of the accompanying press release will be key in discerning the CBE’s direction going forward.
POSITIVE
Banks, NBFS names: We continue to prefer the financial sector as a whole, including both banks and non-banking financial service (NBFS)-related names.
NEGATIVE
ALCN: Results of the first two months of Alexandria Container & Cargo Handling [ALCN] (please see below) foretells another bad year for the company.