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Egyptian banks provide best value within emerging markets: Pharos

Egyptian banks provide best value within emerging markets: Pharos

ArabFinance: The research unit of Pharos Holding set the fair values of the banking sectors in addition to its recommendations as the following:

  • Abu Dhabi Islamic Bank (ADIB) fair value has been set at LE29.00 per share, with overweight recommendation.
  • Al Baraka Bank Egypt (SAUD) fair value is LE18.50, with overweight recommendation.
  • Commercial International Bank (CIB) (COMI) fair value is LE105.00, with equalweight recommendation.
  • Credit Agricole Egypt (CIEB) fair value is LE60.00, with overweight recommendation.
  • Egyptian Gulf Bank (EGBE) fair value is $1.10, with equalweight recommendation.
  • Export Development Bank of Egypt (EXPA) fair value is LE18.50, with overweight recommendation.
  • Housing and Development Bank (HDBK) fair value is LE75.00, with overweight recommendation.
  • Qatar National Bank Alahli (QNBA) fair value is LE70.00, with overweight recommendation.
  • Suez Canal Bank (CANA) fair value is LE18.50, with overweight recommendation.
  • Faisal Islamic Bank of Egypt (FAIT) fair value is LE22.50, with equalweight recommendation.

Pharos said in its study that COMI, QNBA, and EGBE have the highest deposit market share of 8.9%, 6.6%, and 1.7% respectively – as of Dec17. While QNBA, COMI and EGBE have the highest loan market share of 10.2%, 8.9%, and 2.2% – as of Dec-17.

Moreover, HDBK commands the smallest market share amongst Pharos universe in deposits and loans market share of 0.7% and 1.2%, respectively.

It is worth to mention, Pharos noted on treasury allocations, ADIB had the highest allocation to treasury investments, which constituted 39% of the bank’s total assets. SAUD and EGBE came in second and third with a constitution of 34% and 30%, respectively. QNBA held the least allocation to treasury out of its total assets, recording 16%, due to parent company constraints.

Pharos expects that the contribution of treasury within total assets to fall slowly and gradually over their forecast horizon, starting 2019, due to a shift in allocation of funds from treasury investments to lending.

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