Egypt’s equities are attractively priced compared to current global averages and relative to their own historical averages, Shuaa Securities’ Ahmed Abdelnaby suggests in a research note (pdf). According to Abdelnaby, equities on the benchmark EGX30 index are the third-cheapest in the Arab world, and the sixth-cheapest globally. Across MENA, Egypt leads the pack both in terms of earnings with a compounded annual growth rate of 34% in 2018-2021, and has the highest return on equity in the region at 31%.

Internal and external macro conditions are undermining performance: “Egypt equities have recently been undermined by (1) a slower pace of further interest rate cuts by the CBE, (2) strong EGP vis-à-vis USD, (3) money migration from existing emerging markets globally and locally to Saudi Arabia and Argentina which were recently upgraded to emerging markets status by global index provider MSCI and index compiler FTSE, and (4) a wave of margin calls,” Abdelnaby writes.