Ashburton Top Stock Pick Is Egypt’s CIB, Pares Morocco Holdings

Ashburton Investments, the fund management unit of Africa’s largest bank by market value, has reduced its holdings in Morocco and considers Commercial International Bank Egypt SAE the continent’s most attractive stock.

The Egyptian bank is favored by Ashburton because “it’s ready to start lending to the commercial sector as infrastructure grows -- it has lots of liquidity,” Paul Clark, head of Africa equities at the money manager, said Friday in an interview at the World Economic Forum on Africa in Cape Town.

Ashburton, a unit of Johannesburg-based FirstRand Ltd., also owns Egyptian construction-related stocks, with holdings in ElSwedy Electric Co., Orascom Construction Ltd. and Arabia Cement Co., Clark said. “Egypt is the most liquid market outside of South Africa,” he said.

Cairo’s benchmark EGX30 stock index has advanced more than 80 percent since an army takeover of Egypt in July 2013, which was followed by elections in May the following year. Morocco’s benchmark Madex Index has gained 12 percent in the period.

“We have taken some profits in Morocco from telcos and industrials,” said Clark, whose fund manages about $32 million. “We lessened our exposure to Maroc Telecom. The stock exchange there is generally quite expensive.”

While an Egyptian company is Clark’s top pick, the fund’s largest holdings are in Nigerian banks, where last year’s slump of about 50 percent in oil prices strained the economy of Africa’s largest producer of crude and caused it to devalue the naira.

“We think they won’t do to badly, despite oil and the currency and they’re quite cheap,” he said. “Kenya has been expensive, but it’s coming back so we’ll start looking at opportunities there.”