KEY THEMES
Investors are still grappling with the impact of COVID-19 vaccination efforts on the Egyptian economy and hence Corporate Egypt and how matters will unfold when it comes to geopolitical tensions with Ethiopia. This leaves investors more focused on company-specific events that can drive in short-term performance. An example was Heliopolis Housing & Development’s [HELI] asset monetization that was revealed before Thursday trading (please see below). Early this morning, Ezz Steel [ESRS] reported narrower bottom-line losses that may help prop up its stock price a bit higher, having fallen some 14% ytd. Meanwhile, investors who have shelled out around EGP3bn to subscribe to Taaleem Management Services’ [TALM] public subscription may reinject 25% (the subscription’s minimum cash payment) of those funds or some EGP750mn back into the market.
POSITIVE
HELI
HELI sold 270 feddans for EGP2.5bn, offering the buyer(s) two payment options: (1) a two-year plan with a 20% down payment without interest and (2) a ten-year plan with a 10% down payment and a 7% interest. As per the estimates of our real estate analyst Kareem Farid, the after-tax discounted cash flows of the scenarios offered would see the first option adding EGP1.2/share (+24%) and the second option adding EGP1.0/share (+20%) – both based on Wednesday’s closing price when the contract was signed. The stock has already risen some 7.7% on Thursday in response to the land sale to close at EGP5.16, leaving another upside of 12-16% to full reflect the impact of the land monetization.