Saturday, January 29, 2011

Egypt Stocks: A Contrarian Play?

It is hard to miss the news about the anti-government protests in Egypt. Looters are roaming neighborhoods in Cairo and the death toll from the demonstrations is now above 100. The military has even blocked tourists from seeing the pyramids. Now the Obama administration has threatened to cut foreign aid to the country because of the crackdown on protesters.

So the big question is, is there a contrarian turn-around play here? The Market Vectors Egypt Index ETF (EGPT) is down over 20% during the last twelve months. Investing in this ETF is probably the simplest way to invest in Egyptian companies. The stocks in its portfolio contain many of the following.

Commercial International Bank (CIBEY.PK) is a bank holding company in Egypt with over 70 branches. The stock trades at 14.2 times earnings and six times sales. Earnings for the quarter ending September 30 were up 52% on a 38% increase in revenues.

EFG Hermes GDR (EFGZF.PK) is in the business of investment banking, private equity, asset management and investment brokerage, and the manage two funds, the Jordan Hi-Tech Venture Fund Limited, which invests in the information technology sector in Jordan, and the Middle East Technology Fund. This $1.9 billion market cap fund trades at 5.2 times sales.

Orascom Construction GDR (ORSDF.PK) is in the business of manufacturing and marketing building materials, and in construction contracting, operating in 20 countries. The stock has a price to earnings ratio of 18 and a price sales ratio of 1.7. Earnings for the latest quarter were up over 22%.

Orascom Telecom SAE (ORSTF.PK) is an international mobile communications operating in Algeria, Pakistan, Egypt, Tunisia, Iraq, Bangladesh and Zimbabwe. The stock has a PE ratio of 3.9 and a PS ratio of 0.77.

If you like international stocks, you should check out the free downloadable Excel stock lists at, which includes such countries as France, Brazil, Canada, Japan, India, Russia, and the United Kingdom.

Disclosure: Author did not own any of the above at the time the article was written.


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