Today’s Trading Playbook
KEY THEMES
Yesterday, Madinet Nasr Housing & Development [MNHD] announced four momentous board decisions:
(1) The appointment of Eng. Abdallah Sallam as CEO.
(2) A 25% capital increase of EGP374mn to EGP1.87bn through a 1-to-4 cash rights issue.
(3) The acquisition of two companies owned by Sallam’s family, namely MINKA Developments and EGYCAN Real Estate Development.
(4) As part of the takeover transaction, Sallam family will raise its stake in MNHD to c.5%, thus becoming the third major shareholder behind BPE Partners' managed funds (29%) and National Co. for Construction & Development (15%).
These decisions have filled investors with curiosity over MNHD’s future strategy. To clear the picture a bit, we first note that since MNHD’s previous CEO stepped down last May 2021, B Investments’ [BINV] chairman has been filling the role as an interim CEO. Now, MNHD has found its new leader with real estate and entrepreneurship experience. Second, we think MNHD's capital increase will be used in part to pay for the two abovementioned acquisitions, which will help avoid any potential conflict of interest. Lastly, we see the announced acquisitions adding further value to MNHD’s land portfolio.
Now, on to the top news and analysis for the day.