Equity Analysis /
Egypt

Egypt: On-the ground update and the stocks best positioned for recovery

  • We assess the current situation on the ground in Egypt and identity the top picks in each sector.

  • In banks we like COMI and CIEB. Our preferences in Food and Beverage are JUFO, EFID and EAST.

  • Consumer discretionary will be hard hit. We like Industrials that have solid net cash positions such as ORAS and SWDY.

Al Ahly Pharos Securities Brokerage
30 April 2020

In this 24-page report we assess the current situation on the ground in Egypt and identity the top picks in each sector.

Banks

Top picks are based on resilience in strategy, balance sheet structure and profitability, and those less likely to get hit in profits. Picks: COMI and CIEB.

Food and Beverage

We favor companies that produce pantry staples and shelf-stable foods or those with inelastic demand. Picks: JUFO, EFID and EAST.

Consumer discretionary

This segment is likely to be suffer the heaviest blow. Producers of discretionary items are more likely to be pressured from the shift away from non-essential spending, which will likely linger throughout the year.

Healthcare

Despite relatively high multiples, we continue to like ISPH, CLHO and RMDA. PHAR is the cheapest, but we believe that the discount comes on lack of clear strategy and margin management.

Telecoms

Top picks are ETEL and RACC. FWRY is a high growth story, but we believe it is trading at rich multiples. It is more of a long-term investment to reap the potential of the high growth.

Real estate

OCDI is currently our sector top pick given its solid net cash position.

Petrochemicals

Given the implications of Covid-19 on the market, our top picks are EKHO, ABUK, and MICH.

Industrials

We like companies that have solid net cash positions such as ORAS and SWDY that are more likely to stand current dynamics compared to the rest of our coverage.