At the core of a domestic recovery; remain OW
Strong EPS growth, visibility support valuations. Egyptian banks are key beneficiaries of a recovery in GDP growth (+260bps to 4.9% in 4Q16/17), pick-up in investment contribution to GDP growth (+30bps to 2% in 9M16/17) and rise in system-wide FX (daily flow up 15x post-EGP float). Stocks trade on a 2018e P/E of 6.6x, in line with MENA peers despite having higher EPS growth of +20%, and on a P/BV of 2.0x on par with regional banks on a return-adjusted basis. We view the expected deceleration in headline inflation to 17-18% in Nov-17 and Dec-17 as the main catalyst for rate cuts and, in turn, the next leg of banking stocks’ rerating.
CI Capital is a diversified financial services group and Egypt’s leading provider of leasing, microfinance, and investment banking products and services.
Through its headquarters in Cairo and presence in New York and Dubai, CI Capital offers a wide range of financial solutions to a diversified client base that include global and regional institutions and family offices, large corporates, SMEs, and high net worth and individual investors.
CI Capital leverages its full-fledged investment banking platform to provide market leading capital raising and M&A advisory, asset management, securities brokerage, custody and research. Through its subsidiary Corplease, CI Capital offers comprehensive leasing solutions, including finance and operating leases, and sale and leaseback, serving a wide range of corporate clients and SMEs. In addition, CI Capital offers microfinance lending through Egypt’s first licensed MFI, Reefy.
The Group has over 1,700 employees, led by a team of professionals who are among the most experienced in the industry, with complementary backgrounds and skill sets and a deep understanding of local market dynamics.
CI Capital has been recognized as the “Best Investment Bank in Egypt” by EMEA Finance for four years running from 2013-2016, and by Global Finance in 2014 and 2015.
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