Keep a keen eye out for fintech, pharma, and non-food consumer stocks on the EGX this year, CI Capital said in its latest MENA positioning report. The financial services group sees a friendly regulatory backdrop for pharma signalling a strong year ahead for the sector — and its stocks — while fintechs and non-food consumer companies are expected to show operational resilience in the year ahead.

Egyptian stocks made up 8 of the group’s 20 top picks in the region, with CIB, Orascom Development Egypt, Talaat Mostafa Group, Eastern Company, Raya Holding, Taaleem Management Services, Ibnsina Pharma, and Fawry all making the list with an "overweight" rating. Here's what you need to know about the investment cases for stocks in Egypt’s top growth sectors this year, according to CI Capital:

Fawry was chosen as the group’s top fintech choice across the region, with the company understood to benefit from the upturn in the country’s e-payment retail market considering its 52 mn active user base and developed range of services. In terms of valuation, Fawry is trading a 70% discount to its peers, offering an attractive upside.

Raya Holding was flagged as a top pick due to an expected rise of the data centre industry in Egypt, with the sector expected to grow at a compound annual growth rate of 8.3% between from now until 2033. Zooming into Raya — and importantly its wholly owned subsidiary Raya IT — CI Capital thinks that it is in the right spot and the right time to capitalize on this, with two data centres already in the works expected to markedly increase revenues. CI Capital sees Raya IT’s revenues increasing 56% this year and its parent company’s stock price not fully reflective of Raya IT’s value.

Ibnsina Pharma is expected to gain off the back of an expected 30% growth rate in the pharma sector in 2025, driven by both price increases and a recovery in volumes that CI Capital puts to recent regulatory changes and support initiatives. CI Capital thinks Ibnsina will mirror wider trends in the sector and build on its already dominant 30% market share.

CI Capital is basing its assessment on its forecasts for the country’s economic trajectory, with the group closely watching our efforts to calm inflation and up the primary surplus. The heavily forecasted beginning of the central bank’s easing cycle at some point in 1Q 2025 and USD 4 bn of strategic financing by 2Q 2025 to ensure balance of payments stability are both highlighted as milestones for the year.

Looking at the wider regional and global picture, CI Capital thinks 2025 will signal a return to normality, with the slowing of monetary easing and calmed geopolitical tensions following a Gaza ceasefire agreement coming into play. However with the newly inaugurated Trump presidency seeming to double down on its tariff pledges, it is hard to predict which dominos could fall. With a forecasted tariff-induced uptick in inflation expected to stall the Fed’s easing cycle — in turn keeping borrowing costs high — the effect on commodity prices and emerging markets is hard to accurately predict, according to the report.

ALSO WORTH NOTING FROM THE REPORT-

  • Annual urban inflation is expected to calm to 13-14% in February, down from the 24.1% recorded in December.
  • Gas prices will rise 25-30% and diesel prices by 50-55% throughout 2025 as the government closes the subsidy gap to realise cost recovery.
  • The EGP will weaken 5-10% this year.
  • Interest rates will be cut gradually by 500 bps throughout the year
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