We could fairly say we were 2 out of 2 when it comes to the calls we made yesterday. On one hand, the real estate sector was in focus, following news of the government’s intention to limit new land sales to real estate developers, hence excluding individuals. Indeed, EGX real estate index [REAL] rose 1.7% yesterday, outperforming both EGX 30 (+0.7%) and EGX 70 EWI (+1.3%). Porto Holding [PORT] (+4.7%) and Heliopolis Housing & Development [HELI] (+3.1%) led the sector’s performance. On the other hand, Housing & Development Bank [HDBK] (-2.9%) was the worst performing bank stocks, albeit with only 50 shares traded!
Meanwhile, what was worth noting is the outstanding performance of Elsewedy Electric [SWDY] which jumped 9% on the day. We had made yet another positive call on SWDY back on 17 May following its exclusion from MSCI EM index. Since then, the stock has jumped 17% off an intraday low of EGP7.80 which it hit after some sell-off following the index exclusion news. However, the stock had pared most of its losses that same day. Still, we see further upside towards our 12-month price target of EGP12.7/share (+39%).
Elsewhere, EFG Hermes Holding [HRHO] is yet to close its acquisition of 51% stake in aiBank in Q3 2021, so we should expect its financials to be reflect the bank starting H2 2021. Meanwhile, with a market cap close to EGP40bn, Fawry [FWRY] is now the second largest company listed on EGX in terms of market cap behind CIB [COMI]. We note that FWRY’s current market price reflects the expected 1.7bn shares it should have following conclusion of its EGP400mn capital increase, the second leg of which (only 0.09%) will be concluded over the coming two days.
POSITIVE
MTIE: We continue to like MM Group for Industry & International Trade [MTIE] given the country’s more focus on fintech, the potential listing of Ebitkar, and a potential recovery in the consumer electronics segment.