Week ending August 7, 2020

EGX 30: 10,817 (+2.1%) weekly change, (-22.5%) YTD  
Traded Value 1W Avg: EGP 767M , (+21.0%) above 90D Avg.  
EGP:USD: 15.96 (-0.1%) weekly change 

Local Pick-up

The EGX30 swapped five companies in its rebalancing last week

The EGX30 index rebalances twice a year. This means some companies leave and others join. Here’s the update from last week’s rebalancing. 

Who joined: Edita, Egyptian Iron & Steel, Oriental Weavers, The Export Development Bank, and Beltone
Who left: Orascom Construction, Alexandria Mineral Oils Company, Egyptian Resorts Company, Kima, and Porto Group

Adeptio completes purchase of 9.6% stake of Americana Egypt

After a two year dispute with the Financial Regulatory Authority (FRA) and minority shareholders, the FRA finally approved the transaction after Adeptio raised their offer to EGP 231B. (Source: Al Mal)

FY 2019/20: Egypt’s budget deficit falls to 7.8%

Egypt’s total budget deficit falls from 8.2% of GDP in FY 2018/19 to 7.8% of GDP in FY 2019/20 despite the coronavirus pandemic. (Source: Reuters)

Egypt’s Business activity rises for first time in a year

Purchasing Managers’ Index (PMI) is a widely used indicator of non-oil private sector companies’ performance derived from monthly surveys. Egypt’s PMI went up to 49.6 in July after plunging to a record low of 29.7 last April. Now the index is almost at the 50.0 threshold that separates growth from contraction. (Source: IHS Markit)

Global Pick-up

Microsoft confirms talks of wanting to buy TikTok’s US operations

Microsoft expressed its interest in buying TikTok’s US operations which would include US, Canada, Australia, and Newzealand. If the deal goes through this could help Microsoft compete with social media giants like Facebook Inc and Snap Inc. (Source: Reuters)

Weekly Thunderstrike!

With cameras and film slowly fading out of the digital world; Kodak’s shares rose by almost 1,500% after pivoting into drug making and securing a USD 765M loan from the US government. 

Topic of the week – Portfolio Diversification

An investor’s portfolio includes all the financial assets they have invested. Portfolio diversification is spreading out these investments over different assets classes or different industries. This is a risk management strategy to soften the blow if one industry drops.

A portfolio can be diverse because it has many different kinds of assets—for example, stock, bonds, commodities, currencies, cash equivalents, etc… A portfolio can also be diverse if it has stocks that are spread across different sectors/industries. For example: having stocks in a bank, a pharmaceutical company, and a real-estate company.