Starting 2012, flipping the pages of year 2011 in the book of Egypt, the Egyptian market entered a decisive new phase in the history of the country; looking forward for a year that carries more certainty and stability, and unraveling most of the doubts.
We are pleased to report more stability as well as improvement in equity prices and overall liquidity on the EGX since beginning of 2012. Things are expected to further improve after the finalization of Presidential Elections by end of June 2012.
Since the beginning of 2012, the majority of companies witnessed an uptick in their share prices pushing EGX 30 index to stand 45.5% higher Year-to-Date, a remarkable performance, so far this year. Likewise, EGX 100 and EGX 70 indices surged by 23% and 33 %, respectively, Year to Date. Worth mentioning, the Basic Resources Sector index, Telecommunications Sector index and Real Estate Sector index skyrocketed recording 85.83%, 71.70% and 64.87% respectively, pushing the market indices upwards.
Furthermore, Egypt ranked first according to MSCI indices among developed and emerging markets recording an increase of 42% YTD, which is 11% higher than Hungary that occupied second place. While valuation wise, Egypt trades on a F12m PER of 6.9x – a 31% discount to the MSCI Emerging Market benchmark and – of 23 available indices – only Russia, Pakistan and Argentina trade on a lower metric. Moreover, the Egyptian pound (EGP) continues to remain stable, off a mere 0.1% versus the US Dollar YTD. The country’s 5-year CDS moved 3.1% lower this week to 615bps.
Moreover, liquidity increased in the market with the average daily value traded recording LE 470 million vs. LE 374 million in the last quarter of 2011. Moreover, the average daily volume doubled, recording 123 million shares daily vs. 62 million shares. Also, market capitalization surged by 30% since the beginning of the year recording LE 381 billion as of 26 February 2012. Note worthy, foreigners accounted for 27% of the total value traded YTD. Finally, there were 247 new institutional investors that entered the market since the beginning of the year.
1 US = 6.0 EGP