Today’s Trading Playbook
KEY THEMES
Egypt’s milling industry is one of the few industries that include high dividend plays, along with the pharmaceutical industry. The fact that the seven milling stocks listed on the EGX are all state-owned mills means that it is dividend season. State-owned mills end their fiscal year in June with annual cash dividends usually paid in November/December. This is one reason we think milling stocks should perform well over the coming period. Another reason, dividends aside, is that four of these seven names are worth owning on a valuation basis, specifically for income investors. Our top picks are Middle & West Delta Flour Mills [WCDF] (PT EGP170.8/share, +65%), East Delta Flour Mills [EDFM] (PT EGP131.4/share, +54%), Upper Egypt Flour Mills [UEFM] (PT EGP131.4/share, +29%), and Central Egypt Flour Mills [CEFM] (PT EGP42.7/share, +28%). While POSITIVE, we see the dividend story a MODERATE impact due to the low trading liquidity of all milling stocks. For more details please read our note published yesterday about the Egyptian milling industry.
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