KEY THEMES
Yesterday, the main market’s index EGX 30 jumped more than 1% despite CIB [COMI] barely moving. The 1%+ performance was driven by large caps that we have touted here at least once or twice, such as Elsewedy Electric [SWDY], TMG Holding [TMGH], Orascom Construction [ORAS], EFG-Hermes Holding [HRHO], and Palm Hills Developments [PHDC]. The market’s turnover exceeded EGP1.8bn (the highest in five days), 82% of which was driven by individual investors. The remaining 18% was more than 50% dominated by Egyptian institutions, which may explain the surge in the aforementioned large cap names. Egyptian institutions ended the day net buyers for the third day in a row with EGP44mn, raising their total net buys over the last three days to EGP135mn.
Meanwhile, as we mentioned yesterday, Arab Co. for Asset Management & Development [ACAMD] snapped its 6-day winning streak, pulling back 2.7% after news of a potential land sale. In case you missed it, please read here our four-caveat view on that land sale. Also, the FRA released yesterday by end of the trading day a summary of the IFA fair value study for Gulf Canadian Real Estate Investment [CCRS], suggesting the stock’s fair value is EGP9.74, some 82% below its closing price last Sunday after which the stock was suspended from trading for two days. While we are not surprised of the outcome of the IFA fair value study, we are raising the flag on other small-cap stocks that have risen in price without substantiated fundamentals or being driven by company-specific events. Yesterday, we published a technical analysis note discussing just that, which you may review here to learn more about those stocks that could be poised for a sharp pullback.