Credit Suisse, for one, is maintaining an “overweight” rating on Egyptian equities in light of the country’s robust GDP growth–the strongest in 2009-10 GDP in the mainstream Europe, Middle East and African (EMEA) region–as well as its “solid external position and low currency risk.” In particular, the investment bank views Egypt as a “manufacturing base for neighboring Gulf Cooperation Council (GCC) countries, with excellent growth prospects [underpinned by] strong demographic support,” while also referencing a solid banking sector that “offers excellent asset growth potential funded by deposits” against the overall backdrop of an economy with an “extremely accommodative monetary policy.” Per Bloomberg, economic growth in Egypt, the most populous Arab country, rose from 4.9% in Q3 from 4.7% the previous three months. Yet growth is still below the average 7% seen from 2005-2008.

Sticking with Egypt, many analysts expressed surprise earlier this week when the central

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In upgrading Orascom Construction Industry (OCI)–Egypt’s largest listed builder and also the country’s biggest producer of nitrogen fertilizers–local investment bank CI Capital noted that the firm’s net EBITDA is largely a function of fertilizer prices, which most analysts expect to rise up to a further 40% in 2010. “We believe OCI’s 2010 fertilizer margins will be supported by a number of factors, including fertilizer price increases, the establishment of strategic alliances with global fertilizer distributors and production capacity growth,” CI’s report stated, while forecasting an increase in earnings for the company from $427.8m in 2009 to $668.9m in the coming year.

Sticking with OCI, last month Citigroup name the company as one of its twelve “long-term” emerging market plays. “The construction company enjoys many long-term qualifications. Its construction division dominates approximately 2.5% of total developments under construction in the GCC region. The division also grows

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EFG-Hermes, a Cairo-based investment bank, noted to investors last week that it expects the Egyptian pound to fall to LE 5.70 by the end of 2009 and LE 5.90 by the end of June 2010 relative to the U.S. dollar. The pound has strengthened by 2.2% against the dollar since March, hurting exports and in-turn stalling GDP growth–which is set to fall to 3.1% in 2009-2010 from 4.1% in the year prior, the firm posited. “With credit growth slow and low loan-to-deposit ratios, exchange rates are a more effective channel than bank lending for supporting growth, by improving export competitiveness. The Nominal Effective Exchange Rate (NEER) has been stable since June, but we think that the [Central Bank of Egypt (CBE)] will encourage some trade-weighted EGP depreciation before the end of 2009,” speculated EFG economist Simon Kitchen to investors. Yet while Kitchen’s theory makes

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Sharjah-based Dana Gas, the Gulf’s first privately run natural gas firm, reported a 31% increase in gross profits compared to the same period last year. Concurrently, net profits grew more than eleven-fold. As usual, the firm’s Egyptian operations played a central role to its financial results; in fact, during the second quarter alone two new fields there came on stream, the firm made a new gas discovery, and it realized three successful appraisal wells–all adding to gas reserves. However, according to CEO Mr Ahmed Al-Arbeed, condensate sales stemming from its operations in the Kurdistan Region of Iraq were just as pivotal to the firm’s recent success. Dana Gas signed strategic partnership agreements with both an Austrian and a Hungarian-based integrated oil and gas group during the second quarter, the beginnings of the culmination of a $400 million investment in the region made in

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While assigning a “buy” rating to Egypt’s Orascom Telecom Holding (OTH), MENA investment bank Naeem Holding praised the company’s growth strategy and noted that it has “evolved into a well-balanced group with operations in mature markets providing healthy cash flow, while more exotic markets offer growth.” Its analysts forecasts the firm to generate free cash flow of roughly $1.6 billion in 2009. Through its wholly-owned subsidiary, Telecel Globe, Orascom invests in small and mid-cap mobile operators across Africa and Asia. And back in December, it raised eyebrows by becoming one of the first countries to invest in North Korea when it opened Ora Bank–a joint venture along with the country’s state-owned Foreign Trade Bank–while concurrently launching a high-speed mobile network that is 75% owned by Orascom Telecom and 25% by the state-owned Korea Post and Telecommunications Corporation after

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Sharjah-based Dana Gas announced two new gas finds over the weekend in Egypt with reserves totalling an estimated 76 billion cubic feet, leading its CEO Ahmed Al-Arbeed to note that the discoveries would boost the firm’s production and profitability and “take us closer to achieving our target production of 40,000 barrels of oil equivalent/day by the end of the year–a target that we are already well on the way to achieving.” Per news reports, the company’s “aggressive drilling campaign” in Egypt, a country that accounts for the lion’s share of its income, began in 2008 after management announced a plan to invest roughly $500 million in Egypt and Iraq’s Kurdish region in 2009 in order to boost natural gas output.

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Ameriyah Cement, an Alexandria-based firm that manufactures and markets cement products, announced this past weekend a 50% in consolidated net profits and a 43% increase in standalone profits for the three-month period ending March 31, 2009 compared with the previous financial year.

Per the Daily News, Bank of Alexandria, a unit of Italy’s Intesa Sanpaolo SpA, is negotiating with the Egyptian government to sell either 15% or its full 20% ownership stake in an initial public offering (IPO).  Egypt is said to be looking to divest itself of state-owned banks in order to strengthen its historically troubled industry.  Intesa, which is Italy’s second-biggest bank, paid $1.6bn (6x its market value) back in 2006 for an 80% stake the country’s forth largest state-owned bank in what was heralded as Egypt’s biggest auction of state assets.  The float was to immediately follow, says CI Capital Holding, an investment bank, but was delayed due presumably to unsuitable market conditions.  “In our view,” the firm continued, “although it is not clear how long it would take for the IPO to be executed, [it] would stimulate activity in banking stocks as well as the overall

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Egypt’s benchmark CASE 30 stock index, the EGX 30, gained 2.2% yesterday, primarily on the strength of its telecoms and specifically rumors that a row  between Mobinil shareholders will soon be resolved.  Orascom Telecom (OT) and France Telecom have been engaged in battle over their joint holding in Mobinil–one of three mobile operators in the most populous Arab country–since the two sides went to court in 2007.  OT had previously stated that it considers the deal ordered by an international arbitration court in March to sell its 28.75% stake in Mobinil to France Telecom “null and void” after the French company failed to meet a deadline to transfer certain funds in time.

The telecom sector is of particular interest to investors looking to add Egyptian exposure.  Egypt’s Minister of Investment declared this week that the  sector grew by 14% Y-OY in the

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Bring up “frontier markets” and most investors envision a potpourri of nations primarily located in Africa or the Middle East. Not so fast, my friend. A closer inspection of the growing number of frontier mutual funds and ETFs, for instance, shows that at least in regards to some of them, there is very little correlation to the aforementioned regions. Consider the Claymore/BNY Mellon Frontier Markets ETF (NYSEArca: FRN). The fund uses an indexing approach and seeks to more or less replicate, before fees and expenses, an equity index called The Bank of New York Mellon New Frontier DR Index. What does that mean? A close inspection of the fund’s holdings shows that Poland (25.07%), Chile (23.55%) and Egypt (14.78%) account for a majority of the top country weightings, and moreover that financials account for 41.61% of the sector weighting. Per Matthew McCall, ...