Why Citi is calling this East African country its most attractive frontier market


By Andrew Howell and Vineet K Kheria from Citi

Egypt, Kenya and Romania come out as most attractive Frontier Markets (FM), while Kazakhstan, Vietnam and Morocco come out least attractive. Here is what the model says about the top 3:

 Egypt leads the pack thanks to a host of supportive signals, including valuations (PE and dividend yield are low both in absolute terms and relative to the market’s history), decent earnings momentum (2019 EPS have been raised 9.3% over the past 6 months, defying the FM trend of downgrades), above-average economic growth (5.4% for 2019) and monetary factors(low real rates), only slightly offset by weak price momentum (the market has underperformed over the past 3 months).

 Kenya also looks very cheap, especially relative to its history, while other factors…

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