Efg Holding S.a.e. · EGX:HRHO
Efg Holding S.a.e — EFG Hermes — Investor Presentation (July 2006)
14 slides from Efg Holding S.a.e's investor presentation, July 2006
Slide 1: Steep Falls.. Should One Buy or Sell?
EFG Hermes Research Steep Falls.. Should One Buy or Sell? July 2006 Yasser El-Mallawany
Slide 2: Domestic Demand Buoys Growth
Domestic Demand Buoys Growth • After several years of growth being driven by net exports, we have seen a shift in drivers to domestic demand. • Key drivers of BOP surplus: hydrocarbons, tourism, Suez Canal, remittances and FDI. GDP Growth Decomposition Balance of Payments % % 8 Weighted growth in ex
Slide 3: Stable Monetary Picture
Stable Monetary Picture • Exchange and interest rates stable and inflationary pressures contained. • Growth in credit to private sector still low but growth in credit to households has taken off. Exchange, Interest and Inflation Rates Growth in Credit (YoY) % ON Interbank EGP/USD 25 WPI 7.5 30 % % 1
Slide 4: A Three-Year Rally in Stock Market
A Three-Year Economy RallySector: - External in Stock Market Resilient C/A Three- year rally; HFI +900% over Jan 2003 – Jan 2006 • Easy monetary policy since mid-2002. • Global and domestic economic recoveries / Recovery in outside investor risk appetite. • Impact of reforms since appointment of Naz
Slide 5: Performance of Arab Markets
Performance of Arab Markets • GCC - exceptionally positive economic environment, bursting equity market bubbles. • Mediterranean – cycle lags GCC, markets at earlier point of cycle. 1,200 1,000 Qatar 800 Kuwait 600 Saudi Arabia Jordan 400 UAE Egypt Lebanon 200 Morocco 0 Jun-01 Jun-02 Jun-03 Jun-04 J
Slide 6: What Has Changed?
Nasr WhatCity Housing has and Development (NCHD) Changed? Living Off the Fat of the 1990s Fall in both GCC and Global sentiment has countered positive fundamentals; HFI -30% since Feb 7 • A sharp correction in GCC markets. • A strong correction in emerging markets due to fears of a global tightening
Slide 7: 2006 YTD Performance
2006- YTD Performance GCC Market Performance (2006-YTD*) MENA ex-GCC Market Performance (2006-YTD*) 10% 35% 30% 0% Oman Bahrain kuwait Qatar Saudi Abu Dhabi Dubai 25% Arabia YTD* Market Performance 2006 YTD* Market Performance 2006 -10% 20% 15% -20% 10% 5% -30% 0% Morocco Tunisia Lebanon Egypt Jorda
Slide 8: Valuation vs. Growth
Valuation vs. Growth GCC Valuation Levels: P/E 2006 MENA ex-GCC Valuation Levels: P/E 2006 25.0 35.0 22.2 30.0 20.0 15.5 15.5 25.0 19.7 15.0 12.3 20.0 16.6 11.8 15.6 9.9 14.1 10.0 15.0 11.4 10.0 5.0 5.0 0.0 0.0 KSA Qatar UAE Bahrain Oman Kuwait Morocco Jordan Lebanon Tunisia Egypt MENA Markets- Valu
Slide 9: Outlook - Drivers
Nasr City Housing Outlook and Development (NCHD) - Drivers Living Off the Fat of the 1990s Strong bottom-up / top-down dynamics and attractive valuations • Forecast strength in domestic demand expected to reflect itself positively on EPS growth. • 15-50% annual EPS growth in 70% (by market cap) of c
Slide 10: Comparative Valuations – Cement Sector
Comparative Valuations – Cement Sector Company Company Country Country Capacity (millton) Capacity (mill ton) PE 06* PE 06* EV/ton (US$) EV/ton (US$) Torah Cement*** Egypt 3.2 6.0 77 Misr Beni Souef Cement Egypt 1.4 (expected to double by mid 2008) 6.7 143 Quena Cement** Egypt 1.4 (expected to doubl
Slide 11: Regional Markets Valuation
Regional Markets Valuation Country PE06 EPS Growth 06 EPS Growth 07 PEG Egypt 11.7 35.0% 25.4% 0.5 Kuwait 9.6 23.8% 17.1% 0.6 Lebanon 15.4 7.5% 25.0% 0.6 UAE 15.2 14.5% 22.9% 0.7 Saudi Arabia 20.2 22.5% 25.0% 0.8 Oman 11.7 6.3% 14.5% 0.8 Bahrain 12.2 10.6% 11.8% 1.0 Jordan 17.3 14.3% 15.0% 1.2 Qatar
Slide 12: Emerging Markets Valuation
Emerging Markets Valuation PE 06 EPS Growth 06 EPS Growth 07 PEG Turkey 8.8 110.9% 13.0% 0.3 Egypt* 11.7 35.0% 25.9% 0.5 Taiwan 12.2 29.2% 17.5% 0.7 Brazil 7.7 19.4% 7.9% 0.7 Indonesia 11.5 27.2% 15.8% 0.7 South Africa 12.5 27.7% 18.6% 0.7 Chile 15.6 32.2% 16.5% 0.9 Czech 15.1 23.7% 17.6% 0.9 India
Slide 13: Developed Markets Valuation
Developed Markets Valuation PE 06 EPS Growth 06 EPS Growth 07 PEG US 15.3 14.4% 11.7% 1.3 Europe ex UK 12.6 10.4% 9.8% 1.4 Asia Pacific ex Japan 12.7 8.1% 11.0% 1.4 UK 12.2 9.2% 6.5% 1.7 Japan 17.6 7.7% 10.5% 2.1 *Prices as of June 8, 2006. Sources: HSBC, Thomson Financial Data Stream
Slide 14: Outlook for 2006
Outlook for 2006 Regional Drivers Outlook for 2006 High oil prices. Lower correlation between GCC and MENA market performance. Large Current Account Surpluses across GCC. Regional expansion among top firms continues. Increased liquidity. Generating value from core Surge in Foreign Dire