The cutoff for MSCI Egypt Index is currently a full market cap of USD1,826mn and a float market cap of USD913mn. At current prices (EGP187.9) SWDY’s market cap is now USD2,331mn and float market cap is cUSD816mn this puts SWDY at 12% below the cut-off on float market cap. Should SWDY get to this level (implied market price of EGP211) then SWDY should qualify for index inclusion on its own merit. 

SWDY could account for c2bps of MSCI EM and see passive inflows of cUSD75mn (39x 3MADVT). The price cutoff date for the MSCI May review is any of the last 10 business days of April. 

We have had SWDY in our Egypt portfolio since 28 November 2017 (returning 47.5% vs 17% for EGX30), and we added SWDY to our MENA Top 20 list on 28 February (up 21% since vs 7.8% for EGX30), while increase its weight in our Egypt portfolio from 5% to 12.5%.  Our Egypt portfolio is up 17% YTD vs 10% for EGX30 (as of 9 March 2018)

Elsewedy Electric: EGP171.63 as of 11 Mar. 2018, Rating: Buy, TP: EGP190.00/share, MCap: USD2,135mn, SWDY EY/SWDY.CA

Mohamad Al Hajj