{"id":582119,"date":"2023-02-13T00:00:00","date_gmt":"2023-02-13T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/blackboards\/education-stocks-continue-strong-performance-post-float\/"},"modified":"2023-02-13T00:00:00","modified_gmt":"2023-02-13T00:00:00","slug":"education-stocks-continue-strong-performance-post-float","status":"publish","type":"blackboard","link":"https:\/\/enterpriseam.com\/egypt\/blackboards\/education-stocks-continue-strong-performance-post-float\/","title":{"rendered":"Education stocks continue strong performance post-float"},"content":{"rendered":"

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<\/span>Education shares have been on a tear this academic year<\/span>, underscoring the relatively uncommon nature of private-sector education stocks in Egypt. They\u2019re defensive, sure: Their product is an essential good <\/span>that people need regardless of broader economic performance, which would suggest they generally do better than other sectors in a downturn. But the sector is also one heck of a growth play in good times: About 45% of our population is 19 or younger, and population growth is still coming in at about 1.7% per year (having peaked at about 2.3% per year in 2014).<\/span><\/p>\n

In our last look at education shares <\/span>last September<\/a><\/span>, we found they showed mixed performance throughout the year, with one education player massively underperforming against the wider market. For the purpose of this analysis, we\u2019ll assess how education players\u2019 stocks performed on a YTD basis and from the beginning of the first quarter of their academic year (which runs from September-November) until now. <\/span><\/p>\n

Which EGX-listed education players are there to speak of?<\/span> There are a small handful of education stocks listed on the EGX, including industry leader CIRA Education, which operates K-12 schools Mavericks and Futures, as well as Badr University. The only other EGX-listed education players are CIRA subsidiary, Cairo for Educational Services (CAED); the Suez Canal Company for Technology Settling (SCTS), which owns and operates the Sixth of October University, and Taaleem Management Services. <\/span><\/p>\n

Education shares doing better than they did in the same period a year ago:<\/span> Most EGX-listed companies have shown strong returns when looking at the six-month period beginning in 1Q 2022-2023. The weakest performer among them still cranked out a positive (albeit very minor) return during the period since September. On a YTD basis, the same trend generally holds: The majority of <\/span>the companies are up since the beginning of the year, with the exception of one player that has remained flat.<\/span><\/p>\n

THE BENCHMARK: <\/span>The EGX30 has returned a whopping 76.8% since September and is up 18.4% so far in 2023. <\/span>The bourse rallied following October\u2019s devaluation, making it one of the world\u2019s best-performing indexes (in local-currency terms). Since the October devaluation, the bourse has soared more than 52.5%. <\/span><\/p>\n

CIRA Education\u2019s shares have risen some 28.7% since September and are up 6.9% YTD.<\/span> The leading private sector education player\u2019s shares have risen from EGP 11.23 per share at the beginning of the academic year in September to EGP 13.90. <\/span>Taaleem<\/span>\u2019s stock has inched up 5.5% YTD and is up some 41.1% since September. <\/span>SCTS<\/span> is the sector\u2019s worst-performing stock on a year-to-date basis but the best performer since September. The company\u2019s stock is down 17.4% since 1 January, but has rallied 42.6% since September, hitting EGP 60.61 per share. <\/span>CAED<\/span>, which is much more illiquid, has remained flat YTD and has inched up a meager 0.5% since September to EGP 15.58.<\/span><\/p>\n

Despite broadly doing well, education stocks haven\u2019t done as well as the broader market <\/span>\u2014 but that\u2019s a function of their defensive nature<\/span>, Beltone Financial Vice President of Research Aly Adel told Enterprise. \u201cEducation shares are known as \u2018low-beta\u2019 \u2014 their defensive nature limits both the upside and the downside in comparison to the wider market,\u201d he explained. \u201cSo if the broader market rises by 10%, the stock doesn\u2019t necessarily have to go up by the same amount.\u201d But that also means the downside risk is more contained \u2014 if the overall market falls 10%, these defensive stocks are unlikely to be as affected, Adel said.<\/span><\/p>\n

As for their earnings:<\/span><\/p>\n