Saudi Retailers | Dust yet to settle, but select names offer upside
More consumption headwinds ahead in spite 2016 pressures. The average basket size of the Saudi consumer reached an all-time low of SAR293 in Dec-16, down 23% y-o-y. But we believe that the following measures are likely to pressure spending further: i) Cuts to ministers’ pay and scale back of financial benefits for public sector employees, ii) higher expat fees, iii) further fuel subsidy cuts during 2017, iv) higher import duties of 6-25% up from 5% on 193 items including F&B and other consumer products, and the introduction of VAT. We cut 2017 sales/sqm forecasts across our coverage by 5% on average; however, we still assume a minor recovery in 2017, picking up in 2018. We remain Overweight on Al-Othaim Markets and SACO, but advise limited exposure to pure discretionary plays like Jarir and eXtra. Alhokair’s new management strategy appears promising, but we remain Neutral on the stock pending restructuring efforts and signs of pay-off.
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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