Hermes reiterates Credit Agricole Egypt Buy rating, FV at EGP14.8/share

EFG-Hermes reiterated, in a recent study, Credit Agricole Egypt (CIEB.CA) Buy rating, with FV of EGP 14.8/share (up from EGP13.0 previously) implying 17% upside.

Hermes stated that, it upgraded earnings forecasts for CAE, with fee income and FX income having been strong positive surprises so far in 2013.

Limited FX availability, especially during 2Q2013, has led to higher pricing in trade finance-driven fee income and FX revenues.

While FX availability has slightly improved over the past two months and the EGP/USD rate differential between the official and black market has narrowed, the persistence of weak fundamentals (weak tourism and FDI, falling remittances) will lead to a continued FX shortage and high pricing for LCs/LGs in 2H2013, in our view.

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