Egypt bourse to show strong performance, says Merrill Lynch

Cairo, Egypt (Capital Markets in Africa) — Egypt’s stock market is likely to show strong improvement in the near term, said BofA Merrill Lynch in its emerging markets report.

The Egyptian Exchange has suffered steep declines in recent months, but the bullish performance in May partially pared such losses, especially after concerns about the local currency abated and the capital gains tax was delayed for two years, according to the report.

Merrill Lynch also said the Egyptian market continues to show strongly on market screens due to offering the biggest growth in profits, which reached 5% last month.

In terms of value, Egypt’s capital market currently trades a P/E ratio of 12.4x, up 19% compared with its historic levels, yet in line with peers from emerging markets, the report showed.