Today’s Trading Playbook
KEY THEMES
It’s the last trading session before the weekend, where the EGX 30 is currently up 1.27% for the week. Fun fact, if the index closed this week in the green, it would be the fourth consecutive green week. How is this important? Well, we note that this hasn’t happened since last August, when the index was enjoying the then-potential natural gas price cut story.
Meanwhile, the announcement of First Abu Dhabi Bank (FAB) reaching a final agreement to acquire 100% of Bank Audi Egypt should further reinforce bank stocks performance overall, especially if the final valuation were to come close that of Bank ABC's acquisition of BLOM Bank Egypt (i.e. 1.4x book equity). This comes as bank stocks are still recovering from the slump caused earlier in the year by the Central Bank of Egypt’s decision prohibiting cash dividend distribution until further notice. Elsewhere, the Ministry of Education’s (MoEd) negating its earlier decision to limit foreign ownership in international and private schools is a boon for the sector.
Positive
Banks: The FAB-Bank Audi Egypt transaction should attract attention once again to the sector.
CIRA: Cairo for Investment & Real Estate Development [CIRA] could see its stock re-rate a bit in view of the Ministry of Education’s decision to allow foreigner ownership in the sector.