An Egyptian virtual payment company quadrupled the price of the pandemic, with the help of a government initiative to reduce citizens’ reliance on cash. Investors and analysts are divided as to whether the stock market uptick has other legs.
Fawry for banking
Egypt, where it is not unusual for government workers to knock on the door to collect fuel and electricity bills, is reviewing the exit to move more transactions to the virtual North African central bank has asked lenders to describe a secure strategy that all citizens have monetary services, focusing on virtual bills and cell wallets. The regulator is also pressuring consumers to use payment platforms like Fawry to verify and slow down the spread of the new coronavirus.
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Not everyone thinks it’s going to last. Fawry’s assessment is “overexcited,” especially in relation to his benefits, according to Amr Elalfy, head of prime securities studios in Cairo. The company recorded sales of 549 million Egyptian pounds for the first part of 2020, an increase of 47%. at the same time last year.
The Egyptian company’s 12-month price-to-sales ratio is 20, roughly the same as that of credit card giant Mastercard Inc. , whose revenue is particularly high and the recent profit margin 4 times higher, according to knowledge compiled through Bloomberg. The 14-day relative strength index has remained above 70 for the past two weeks, suggesting that it would possibly have increased too much, too fast.
Stocks have recovered with “hopes of exponential expansion in Egypt’s virtual ticket sector, which so far is still largely in penetrate,” said Allen Sandeep, director of studies at Cairo-based Naeem Holding.
Approximately one-third of Egyptians over the age of 15 are accountable in monetary institutions, a small proportion, according to knowledge compiled through the World Bank in 2017. Virtually all public facility bills are made with money in the country of one hundred million people, he said. Fawry has 166,500 locations, adding retail outlets across the country, to accommodate money bills and also serves ATMs and smartphones.
Fawry responded to requests for feedback on the company’s performance.
While the company’s price exceeds that of more than a portion of those indexed in the Egyptian reference index EGX30, inventory is not included in the indicator because it does not meet trading volume requirements, according to an inventory exchange spokesperson.
However, Fawry’s growing percentage value can inspire new investment in Egypt’s electronic payments sector, according to Ahmed Abou El Saad, managing director of Azimut Egypt Asset Management. Assessments of initial public offerings from other payment platforms adhere to Fawry’s leadership, he said.
The National Bank of Egypt will gain stakes in Aman, the electronic payments subsidiary of Raya Holding for Financial Investments, which is scheduled to go public in 3 years, local newspaper Al Mal reported in 2019.
Some of the IPO in recent years has been in the invoice business, adding Amsterdam-listed Adyen NV, which is trading more than five times its directory value in 2018. Square Inc. raised less than it was looking for in its directory in 2015, but has since multiplied its initial valuation from $2. 9 billion to approximately $65 billion.
The electronic payment platform “is bigger than you can remember, and it’s coming,” Abu El Saad said. “It’s better for the central bank and other lenders” to cooperate and regulate. “
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