KEY THEMES
U.S. equities slipped notably once more on Wednesday, with declines over tech stocks, after a diverse set of corporate earnings and as investors continued to worry about higher U.S. Treasury yields. However, Asian share markets ended a 5-day losing streak, with gains achieved on Thursday, shrugging off the weak performance of Europe and the U.S. as China underscored its diverging monetary and economic picture by cutting benchmark mortgage rates.
Here at home, both indices retreated by the end of yesterday’s session, after having a green opening. Both EGX 30 and EGX 70 EWI are now down 0.98% and 1.0%, respectively, so far in January. On the corporate news side, Orascom Development Egypt [ORHD] has released its sales indicators for 2021. ORHD’s 2021 sales grew to EGP9.2bn (+49% y/y), amid improving demand for secondary homes, as well as solid sales momentum in O West and Makadi Heights. Moreover demand for the hospitality segment started improving in H2 2021 on the back of vaccine deployment and the government decision for hotels to increase their operational capacity utilization to 100% since October 2021. ORHD’s hotels in El-Gouna and in Taba Heights benefited from the decision with occupancies for 2021 reaching to 45% and 11%, respectively.
We like ORHD given the diversity of its top line, as well as the steep discount at which ORHD is trading. Despite the potential dent of tourism activities in 2022 on the back of the Omicron variant, we believe over the long term ORHD has a deep value to offer, given the distinctive nature of its land bank.