EUR 153.27 For Business Accounts Only

CI Capital 4th Annual MENA Investor Conference | Corporates meeting highlights

Banks unanimously foresee loan recovery; Real estate market consolidation set to kick in. Egypt banks ascertain a prospect loan recovery phase in 2020, aiming to improve loan utilisation. This falls in line with the declining interest rate environment and banks’ plan to fend off high ETRs, which the consensus sees exceeding 30% in 2020e. Egyptian real estate developers guided for a stronger 2020, after a challenging 2019, on improving liquidity, market consolidation, and more relaxed payment plans. As for Saudi real estate, companies believe market demographics support an improved 2020, but highlight the residential segment is likely to be the last to react.

Diversification and product innovation key themes, as MENA consumer recovery unfolds. Volume recovery across Egypt’s consumer names seems inevitable, as inflation eases, and on diversification and product innovation, yet at a higher cost. As for Saudi consumers, the absence of fiscal reforms supported the recovery in consumer confidence, coupled with expansions focused on the core market, driving top line growth and leveraging on cost cutting and economies of scale. Meanwhile, the main highlight for telecoms was STC’s potential acquisition of Vodafone Egypt and its impact on Telecom Egypt, while GCC companies highlighted the 5G and enterprise segments as the main areas of growth in the medium-term.

Industrials pressured by global, domestic challenges; Contractors and transport carry opportunities. Within the industrial space, nitrogen fertiliser producers are cautiously monitoring urea prices, while awaiting local market deregulation. Building materials producers are heavily pressured by domestic market oversupply and tough competition. Infrastructure, transport, and water projects are the main themes for 2020 in the MENA region, presenting potential opportunities mainly for Egyptian contractors. Transport and logistics companies are expected to see volume recovery in 2020, on improved economic activity, barring no major escalations in the regional tensions. A key theme is rising appetite for investing in the logistics segment, such as warehousing, dry ports, and freight forwarding in both Egypt and the GCC.

Rameda, CHG, CIRA site visits; Sustainable growth main theme for healthcare and education sectors. Based on investors’ appetite, we explored Rameda’s four newly added lines, installed in 2019 to boost production capacity by 1.6x, aiming to fuel future growth. We also visited Cleopatra East polyclinics (launched in 2019), housing c14 new clinics, a full suite of diagnostic services, and a pharmacy. As for CIRA’s Badr University, we visited its nine existing faculties (+c10k students currently), and the new buildings set to host the seven new faculties, offering an additional c16k seats. Investors had the chance to look at the newly allocated land, adjacent to the current building, which could add a further c20k seats.