Of the four stocks we mentioned yesterday, two rose and two were almost unchanged, averaging +1.7% on the day, outperforming both EGX 30 (+0.5%) and EGX 70 EWI (-0.1%). Egypt Aluminum [EGAL] and Ezz Steel [ESRS] rose 5.0% and 1.9%, respectively, while Sidi Kerir Petrochemicals [SKPC] and Alexandria Mineral Oils [AMOC] ended the day almost unchanged.
Meanwhile, Elsewedy Electric [SWDY] – one of our Core Coverage universe – saw its stock advance 2.6% after the company said it completed two acquisitions in Asia’s transformers sector, namely in Indonesia and Pakistan. Also, the company announced the last eligibility date for its EGP0.40 DPS (a 5% yield) is 19 May. On 4 May, we had suggested that investors benefit off any mispricing that impact SWDY ahead of MSCI EM’s semi-annual rebalancing scheduled for tomorrow night.
Elsewhere, Ibnsina Pharma’s [ISPH] move to partner with the Egyptian government, as represented by the General Authority for Health Care, could signal potential business and further acceleration of its developing logistical capabilities.
POSITIVE
SWDY: SWDY offers an upside of 50% to our 12M PT of EGP12.7/share. SWDY is up 4.9% since then but already up c.10% since 15 April when we first alluded to its unjustified pullback starting April. Yet, SWDY is still down 6.7% since end of March.
ISPH: ISPH rose 2.9% yesterday to EGP3.97/share, close to a 52-week low. Still, ISPH is down 22% ytd. We also see its recent pullback as unjustified.