Today’s Trading Playbook
KEY THEMES
Despite being on the receiving end of some good news, Cairo for Investment & Real Estate Development's [CIRA] performance wasn’t as good during Thursday’s session, ending the day down some 1.9%. CIRA issued a statement on Thursday asserting the probable positive effect of the decision to remove foreign ownership limits on private schools in Egypt. The company stated that such a decision will facilitate obtaining licenses to construct new private schools. We still view any correction in CIRA’s stock price as an opportunity, given the quality of the company’s cash flows as well as the limited downside risks associated with its expansion plans.
Elsewhere, Delta Sugar [SUGR] released a set of poor unaudited preliminary figures for 2020 (please see the top news and analysis section below). Despite showing better volumes, SUGR's performance was pressured by higher manufacturing costs, coupled with weak selling prices. This, in return, caused for lower inventory cost in many cases, thus burdening the company’s margins. We think that until white sugar prices reach to levels economically reasonable relative to beet prices, net losses are inevitable.
Positive
CIRA: We reiterate the positive effect of removing foreign limits on private school ownership.
negative
SUGR: Higher selling volumes will not help in the presence of weak selling prices and higher manufacturing costs.