Today’s Trading Playbook
Yesterday’s trading session felt like Eid Al-Adha’s long vacation was not over yet, with thin volumes of shy of EGP325mn or barely USD17mn. Ironically, foreigners were net buyers on a Sunday, when they are usually low on trading activity. Meanwhile, local individuals were net sellers. As we mentioned yesterday, we continue to see this market’s summer lull only interrupted by individual stock stories that have to do with some sort of a corporate event, such as M&A, share buyback, or an earnings surprise.
Speaking of which, Madinet Nasr Housing & Development’s [MNHD] board of directors rejected SODIC’s [OCDI] offer as too low compared to MNHD’s “real” value. We have reservations on the use of the word “real” here because it implies a well-known fact. Granted, MNHD’s “fair” value rather is higher than its market price and probably higher than the offer price, but at the end of the day, it’s investors that decide whether or not a value is fair given the circumstances, which may have nothing to do with the subject company. Yes, the offer price was made at a premium, but that premium is off an already low price level. So, MNHD’s board decided to let investors decide for themselves if the offer price is “fair” enough by asking shareholders to vote in a general meeting before opening their books for due diligence. This also leaves the door open for OCDI, now 85.5% controlled by Aldar Properties [ADX: ALDAR] and ADQ Holding, to revise its offer price higher. This probably explains why MNHD’s stock price fell at the start of the trading session before recovering by end of the day.
Company-specific events aside, we see an imminent IMF deal as key for the market performance, provided that the agreed funding is large enough.
Now, on to the top news and analysis for the day.