On Egypt’s first Wednesday of 2023, the EGP slipped ~7% against the USD, bringing the total devaluation in the past year to ~68%. After the use of letters of credit was phased out last Thursday, the IMF is now keeping a close eye on Egypt’s reforms, with one of them expected to be a flexible exchange rate.
With that being said, investors will ask the question: how can I protect myself against possible further devaluation?
We identified 11 companies that can help hedge investors’ risk against further devaluation of the EGP. These companies were chosen based on their % of FX revenues and their exposure to FX revenues through their subsidiaries.
A prime candidate that we have studied is Abu Qir Fertilizers, up 115% in the past year. Abu Qir’s FX-based revenues make up ~45% of their total revenues.
We identified 10 other companies which have a similar minimum FX revenue threshold that could aid investors in mitigating the risk of another currency devaluation. You can see the full list below.
You can also access the EGP devaluation hedge theme with all of the mentioned stocks directly on the Thndr app.
* It’s important to note that this theme identifies stocks that could aid in hedging against possible further devaluation, & not past ones. This is not investment advice, you should do your own research before making any investment decisions.
