Simon Kitchen leads his crew of 24 EFG-Hermes strategists to a repeat third-place finish. The strategists are primarily headquartered in Cairo, with team members in Oman, Saudi Arabia and the United Arab Emirates as well. Investors hail their aggressive and in-depth coverage of changes to the Middle East & North Africa region. For example, one money manager offers, “When Qatar was upgraded over the past year from a frontier market to an emerging market, Simon went the extra mile on estimating what the effects would be on the country. He was able to cut through a range of technical issues and break complex material into understandable terms, analyzing everything from taxation policies to what names would go into stock indexes.” Given the strong rally in MENA shares — the region’s stocks climbed more than 32 percent over the 12 months through May, against the 8.7 percent rise for all emerging Europe, Middle East & Africa markets — Kitchen and his colleagues maintain very few bullish positions, deeming most of investors’ favorite stocks fully valued. They do, however, recommend that investors buy financial institutions Commercial International Bank Egypt and Doha Bank. CIB, Egypt’s leading private sector bank, boasts “a strong corporate franchise and a growing retail book,” he explains. In addition, as “a core play,” Kitchen says, the bank is adroitly poised to benefit from the country’s anticipated cyclical recovery. His group’s price objective for the shares is 42.90 Egyptian pounds, which is 18.9 percent higher than their value in late May. Qatari commercial bank Doha began ramping up investment spending after the country’s political transition last year, the team leader notes, and as private sector credit demand picks up, the bank should see strong loan growth. The EFG-Hermes researchers project a 23 percent upside to the stock’s price of 63 riyals at the end of May. See also Simon Kitchen's profile in the 2013 Emerging Europe, Middle East & Africa Research Team. |
The 2014 Emerging EMEA Research Team: Middle East & North Africa Equity Strategy, No. 3: Simon Kitchen & team