Today’s Trading Playbook
KEY THEMES
Yesterday, the USD2bn investment program by ADQ almost came to an end. Through six deals, ADQ has deployed a total of USD1.85bn, acquiring minority, yet strategic, stakes in five EGX-listed names. The below table summarizes the acquired stakes and the implied valuation of each deal. In response, the market rebounded strongly on Tuesday, as the different deals implied a 13% premium to market prices on average.
We notice that each time the market is faced with a secondary offering of governmental stakes, the reaction prior to the sale is always jittery. The reason could be viewed in light of the confusion related to the pricing implied by the deals. That said, the argument could be made that the end of this saga removes an important tactical overhang on the market performance, given that completing the deals at a premium to market prices could be seen as a vote of confidence in the country’s investment repertoire.