Cairo – Mubasher: Pharos Research has initiated coverage on Egypt Free Shops' share and set its fair value (FV) at EGP 7.09 per share, with an “Overweight” recommendation.

Tourist arrivals surged 51% year-on-year during the first five months of 2017, and the increase is “going forward”, which will positively affect Egypt Free Shops’ revenues, the research firm said in a report released on Monday.

Pharos Research expects Egypt to benefit from the revival of the local tourism segment and forecasts that tourists arrivals will grow “especially if Russia lifted the travel ban”, noting that earlier this year “the UK flagged Egypt as a safe destination for potential UK tourists”.

Egypt Free Shops' recently opened new branch in Maadi will help increase “accessibility to potential customers,” Pharos said.

Other branches near Libya and Palestine could be forced to close due to the ongoing tension in the region for the past six years, in addition to the current unstable political situation.

Pharos attributed the drop in tourism revenues to “the volatile security situation in Egypt” which might affect Egypt Free Shops’ revenues.