Further information


Egypt’s 25 January Revolution of 2011 has shaped a new reality for the country, its people, its government, and the international community dealing with it. This new norm is a culmination of the political, economic, and social changes that have taken place over the past two years. The new reality requires careful navigation by all stakeholders to be able to reap the benefits of the revolution and take Egypt to the next level. On the political front, the revolution has led to a new political framework with new institutions and new players. This has caused a lot of political conflict, disrupting daily activity and causing economic losses.The ability of Egypt’s new leadership to work on directing its supporters and opponents towards a common vision for the country that is not biased towards a specific political group or ideology will determine the success of the new regime in fulfilling the aspirations of the Egyptian people. On the economic front, as a result of the challenges faced during the past two years and the already existing structural weaknesses, Egypt is at a very critical juncture. The success of the Egyptian story is dependent on the government’s ability to implement much-needed economic reforms. This can only happen by efficiently communicating with the public and ensuring the inflow of sufficient levels of investments to compensate for any austerity measures taken.

The Egyptian market has performed positively during 2012, backed mostly by retail trading. The lead index in the market, the EGX30, was the best performer in the MENA region during 2012, surging by over 45% over the year. Egypt was also the best performer compared to emerging markets during 2012, losing the first place to Turkey, however, towards the end of the year, following negative news triggered by political unrest. All sectors in Egypt witnessed positive performances during the year, with the basic resources sector outperforming all others, growing by over 130%, while the chemicals sector witnessed the slowest growth, barely exceeding 5%. Following the plunge in Egyptian stocks towards the end of November and the beginning of December 2012, the market displayed attractive multiples, trading at 9.8x P/E for 2012e versus 19.0% earnings growth for 2013f, below MENA region (11.5x P/E versus 12.9% earnings growth) and emerging market multiples (14.0x P/E versus 15.7% earnings growth). Despite the attractive multiples, we assign Egypt a neutral outlook for 2013 over political and macroeconomic uncertainties.  



Key Indicators (FY2011/12)
Nominal GDP (USD bn) 237.6 Resident population (mn)* 85.2
Real GDP growth (%) 2 Population growth (%) 1.4
GDP per capita (USD)                   2,740 Inflation (y-o-y %) 8.7
Sectors M2 growth (y-o-y %) 7.8
   Services 55.5 Exchange rate (USD/EGP) 6.0
   Industry 16.5 Current account (% of GDP) -4.0
   Agriculture 13.5 Net Foreign Assets (USD bn) 15.8
   Oil and Gas 15


Printed from the Beltone Financial website

Page: Markets > Egypt
URL: http://www.beltonefinancial.com/egypt