KEY THEMES
As a follow-up to our Trading Playbook last Thursday, we now know that trading on both Orascom Investment Holding [OIH] and Orascom Financial Holding [OFH] shares will resume this Wednesday, 17 February. However, OIH’s GDR program will remain in force, whereas OFH is not going to have its own GDR program, which would mean OIH’s GDR holders will have one of two options, either have The Bank of New York Mellon (the custodian) cash out their assigned OIH local shares or if applicable receive the local shares. In our opinion this may place some pressure on OFH’s shares once it resumes trading later on this week. Based on the closing prices of Sarwa Capital Holding [SRWA] and Beltone Financial Holding [BTFH], we calculate that the split would overvalue OFH by c.4%, which adds further pressure to OFH’s price post-spinoff.
Elsewhere, CI Capital Holding’s [CICH] plan to float Taaleem, owner of El-Nahda University in Upper Egypt, on the EGX will likely result in a slightly higher valuation for CICH, in our opinion. We had valued CICH in our Core Coverage dated 14 January 2021 at EGP5.2/share with a 12M PT of EGP6.0/share. Media reports suggest that Taaleem’s valuation could be in the range of EGP4.5-5bn, which would imply an additional EGP0.1-0.2/share to CICH’s fair value or 3-4%, which could be a Valentine’s Day gift to CICH shareholders.
Positive
CICH, MTIE: We could see CICH firm slightly higher on Taaleem’s indicative valuation. Also, we could see MTIE shares re-rate over the coming period as it goes ahead with Ebtikar’s IPO.
NEGATIVE
OFH: We could see some pressure once it starts trading this Wednesday in light of the above.