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Thursday, 28 March 2019

Credit Suisse is bullish on Egypt, sees it as “top pick across the Middle East”

Credit Suisse is bullish on Egypt, sees it as “top pick across the Middle East”: Egypt is Credit Suisse’s “top pick” in the Middle East as the firm continues to be bullish on Egypt, Credit Suisse Group’s head of MENA research Fadh Iqbal told Bloomberg TV (watch, runtime: 3:26). Although liquidity on the equity side remains an obstacle for some investors, “the upside there is still substantial,” while liquidity is easier on the fixed income side, making it a more attractive option for many portfolio managers. “For those who are concerned about growth risks in Egypt, having that coupon return is a more attractive opportunity.”

CS also sees the EGP’s recent rally against the USD as “not sustainable” in the short term, particularly as the import-heavy month of Ramadan is fast approaching, Iqbal says. For the time being, the EGP is unlikely to appreciate enough for the USD to change hands at below EGP 17.

Expect a rate cut today: Iqbal also echoed the consensus that today’s meeting of the Central Bank of Egypt’s Monetary Policy Committee will see an interest rate cut. Last month’s surprise 100 bps cut came despite slightly accelerating inflation, indicating that the CBE is not shying away from positioning itself on “the aggressive side,” he says.

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