EGP liberalisation a mixed bag, cut to Neutral
Downgrade earnings. EGP liberalisation should allow for increased project finance and FDI, but we reduce 2017-18e EPS by an average of 16% due to: i) translation of EGP-backlog (26% as of 3Q16) plus ii) lower margins on US provisioning and long term Egypt margins falling to EM norms. We cut our TP by 10% to USD9.00/share which on end-2017e USD:EGP of 14.35 is EGP130/share. Given a 6M rally of 102%, outperforming EGX30 by 36%, this warrants a downgrade to Neutral. The 2017e P/E implied by our TP is 8.7x, a slight discount of 6% vs. EM peers (9.2x). On Nasdaq Dubai, OC offers c70% upside--but liquidity may cap value realisation.
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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