Today’s Trading Playbook
KEY THEMES
Global markets are set for a rebound in early Monday trading, after notable losses on Friday. U.S. future indices are broadly up, whereas oil prices rebounded on speculation that OPEC+ could pause an output increase this Thursday in response to the spread of Omicron. We think that such a rebound in early Monday’s trading does not indicate that investor’s sentiment has fully recovered from Omicron, so we should expect more volatility in the future until we get a firm grip on the essence of the new variant.
Here at home, EGX 30 dropped by 1.34%, while EGX 70 EWI closed down 1.17%, with slippages basically all over the market. We note that both indices ended the day above their intra-day lows, especially EGX 70 EWI, which should promise a green open for both indices in Monday’s session.
Elsewhere, 21.5% of SODIC's [OCDI] shareholders have reportedly accepted Aldar Properties and Abu Dhabi sovereign fund ADQ offer in the first three sessions since it was launched. We note that the MTO will go through if a minimum of 51% of OCDI’s shares were to be submitted. Given the magnitude of the shares submitted so far, we think the likelihood of the acquisition going through has increased substantially, offering 3.3% from Sunday’s close. We believe completing the deal should be something of a booster to the rest of the real estate sector.
Moreover, Ezz Steel [ESRS] has not positively confirmed yet if the acquisition talks for an 18% stake in Egyptian Steel are indeed valid in a disclosure yesterday. We note that according to news sources, the deal is purportedly valued at EGP1.5bn with no share swap arrangement involved. Furthermore, if deal talks were in fact valid, we do not think the aforementioned valuation of Egyptian Steel should be accurately used to value ESRS, given the lack of information regarding Egyptian Steel capital structure, in addition to other differences related to the business model of the two steel manufacturers.
Now, on to the top news and analysis for the day.