EGP / USD CBE market average: Buy 16.08 | Sell 16.20

EGP / USD at CIB: Buy 16.08 | Sell 16.18

EGP / USD at NBE: Buy 16.07 | Sell 16.17

EGX30 (Thursday): 13,358 (-0.5%)

Turnover: EGP 476 mn (35% below the 90-day average)

EGX 30 year-to-date: +2.5%

THE MARKET ON THURSDAY: The EGX30 ended Thursday’s session down 0.5%. CIB, the index’s heaviest constituent, ended up 0.2%. EGX30’s top performing constituents were Orascom Construction up 1.1%, Oriental Weavers up 1.0%, and EFG Hermes up 0.9%. Thursday’s worst performing stocks were Sidi Kerir Petrochemicals down 5.8%, Juhayna down 4.8% and Qalaa Holdings down 2.3%. Market turnover was EGP 476 mn, and foreign investors were the sole net buyers.

Foreigners: Net Long | EGP +63.5 mn

Regional: Net Short | EGP -36.8 mn

Domestic: Net Short | EGP -26.8 mn

Retail: 42.2% of total trades | 40.6% of buyers | 43.8% of sellers

Institutions: 57.8% of total trades | 59.4% of buyers | 56.2% of sellers

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PHAROS VIEW

“Meaningful” monetary easing could unlock corporate capex lending in 2020: The Central Bank of Egypt’s (CBE) monetary easing cycle, which began in 2019 and is expected to continue in 2020, should spur corporate capex lending next year and fuel non-interest income for Egypt’s banks, Pharos Holding says in its banking sector outlook for next year. The recently-changed accounting treatment for bank and corporate earnings from holdings of government debt will likely also have a more pronounced impact on banks’ profit growth next year, the firm says. Pharos points to a potential reduction of the CBE’s reserve requirement ratio (RRR) as a key upside for the sector, which would prop up profitability. Downside risks Pharos identifies include banks’ margins seeing higher than expected compression as a result of the rate cuts and tightened CBE regulations, and a potential delay in the recovery of the business environment leading to an increase in non-performing loans. Tap or click here for the full report (pdf).

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