KEY THEMES
Yesterday, we stated that we are neutral on both Orascom Investment Holding [OIH] and its latest offspring Orascom Financial Holding [OFH] in the short term. Understandably, given the removal of daily price limits on the day of spinoff, investors saw a wider range of performance for both names, as can be seen in the chart. Indeed, OIH ended the day up 51.1%, while OFH fell 15.4%. However, investors’ portfolios who were long the pre-spinoff OIH would have seen their net worth increase by only 2.0%. Today, we are back to normal trading. Again, of the two, we would prefer OFH to OIH, not for what it is but for what it will become. After all, investors have the option to own both Beltone Financial Holding [BTFH] (-3.4% d/d) and Sarwa Capital Holding [SRWA] (-1.0% d/d) directly if they so wish instead of through OFH.
POSITIVE
OFH, SWDY: We are positive on OFH’s future, while we believe Elsewedy Electric [SWDY] is at the cusp of a new global expansion journey, albeit to the east this time.
NEUTRAL
SKPC: We think Sidi Kerir Petrochemicals’ [SKPC] 2020 preliminary KPIs just reported offer no support to its valuation, leaving limited upside from market levels.
NEGATIVE
OIH: We are negative on OIH in light of yesterday’s surge.