Monday 10 Mar
The Egyptian Stock Exchange sessions have witnessed high-value trading since the start of Ramadan, attributable to the liquidity generated by Ahmed Ezz's acquisition of shares from shareholders opting out of Ezz Steel after its voluntary delisting from the stock exchange.
This occurred despite shortened Ramadan trading hours and typically lower transaction volumes during the holy month.
Egyptian Stock Exchange reports indicate that Ezz Steel
shareholders sold their shares to Ahmed Ezz for 138.15 EGP per share, totaling
nearly 23 billion EGP. Subsequently, they reinvested part of these proceeds in
the basic resources sector, particularly Misr National Steel - Ataqa owned by
Gamal El Garhy. This resulted in a 9.59% increase in Ataqa's share price last
week, representing 760.5 million EGP, or 5% of the total trading value.
Investors preferred to buy shares in Misr National Steel -
Ataqa due to its unique position as the sole remaining iron industry company on
the stock exchange, following the liquidation of Egyptian Iron and Steel and
the delisting of Ezz Dekheila Steel Alexandria and Ezz Steel.
The expectation of a surge in iron demand is a key driver
for investor activity. This demand is projected to rise domestically due to the
resumption of construction in villages and cities after building violation
settlements, and internationally from reconstruction efforts in the Gaza Strip,
Libya, and Iraq. Consequently, investors are also purchasing shares in cement
companies, anticipating that this increased demand will positively impact sales
and profitability.
In addition to the basic resources and building materials
sectors, the real estate sector also benefited from the liquidity proceeds
generated by the Ahmed Ezz deal, with Talaat Moustafa Holding Group shares
experiencing the most significant gains, which coincided with the announcement
of the group's unprecedented 2024 financial performance. This included sales
exceeding half a trillion Egyptian pounds, a landmark for the Egyptian real
estate sector, and a net profit of 14.5 billion Egyptian pounds, representing a
332% year-over-year growth%, equivalent to 4.4 times that achieved in 2023.
Investment in Talaat Moustafa shares was recommended due to
Mubasher Securities Trading's research department's estimate of a 78.2%
potential increase to a fair value of 91.4 Egyptian pounds per share by 2025.
This projection is based on a 5-year analysis of recognized sales revenues and
income from the hospitality sector.
Orascom Development Egypt shares saw increased liquidity,
placing them among the top 10 most traded companies on the exchange for the
first time in a long period. Trading values reached 476.9 million Egyptian
pounds, representing 3.1% of total market trading, and the share price rose by
5.41% last week.
Due to the Ezz Steel share sale's large size, exceeding the Egyptian capital market's immediate absorption capacity, trading volumes are expected to remain elevated. Investors are likely to seek opportunities in related sectors, including cement, real estate, and non-banking financial services.
