Turn Neutral following stock correction
Tourism investment remains under pressure. We still believe that the operating environment for ERC remains challenging due to: i) a volatile FX rate and high interest rates discouraging land acquisitions, ii) the ongoing Russian travel ban, and iii) subdued investment sentiment as tourism recovery takes longer-thanexpected (1Q17 arrivals +51% y-o-y, but still 58% below 4Q10 levels), with demand in tertiary residential market still lacking foreign support, despite the EGPdevaluation, in our view. The stock fell c25% since its 3-year high in January; and our TP at EGP1.10/share now offers a 13% upside, warranting a rating upgrade to Neutral from Underweight.
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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