MARKET WATCH — Back in the Black
STOCK ANALYSIS: Osool ESB Securities Brokerage Co. (EBSC)
Written end of February 2025 for Business Monthly - March 2025 Issue
MARKET WATCH
After starting off the year on the wrong foot, both main market indices staged a comeback during the period from Jan. 15 to Feb. 15. EGX 30 rose 2.1% just shy of the 30,000-point psychological level, while EGX 70 EWI rose 3.5%. Such a performance brought the two indices back in the black on a year-to-date basis, up 0.9% and 3.2%, respectively. Still, declines outnumbered advances, albeit by a small margin.
During the period, shares of a company by the name of Go Green for Agricultural Investment & Development (GGRN) began to trade after undertaking a direct listing on the Egyptian Exchange. The stock opened trading on Feb. 9 at EGP1.77 a share which is the fair value set by an independent financial advisor. On its first day of trading, the stock jumped to an intraday high of EGP2.12 before touching a low of EGP1.25, a 41% drop.
Meanwhile, the top performers’ list was led by small caps, like Egyptian for Developing Building Materials (EDBM, up 90%), Cairo Oils & Soap (COSG, up 64%), and Mena Touristic & Real Estate Investment (MENA, up 37%).
EDBM is now leading the 2025 top performers’ so far with a year-to-date return of 168%. The company recently signed an agreement with Remco Touristic Villages Construction (RTVC, down 7%) to buy all units in its Stella Di Mare Sokhna 2 with the remaining transaction value of EGP4.4 billion to be paid off in 3 annual installments totaling EGP1.4 billion and the remaining EGP3 billion to be recorded as due to RTVC to be potentially swapped into EDBM shares through a capital increase.
Meanwhile, COSG continued to bear the fruits of its restructuring after reporting strong results during 2024. Net earnings jumped 300% to EGP134 million on 14.5% higher revenues of EGP1.06 billion. On the other hand, MENA, which reported a wider net loss in 2024, had accepted an offer from Concrete Plus to develop a 10-feddan land in Mena Garden City project against a 36% profit share.
Also, South Valley Cement (SVCE, up 33%) said it was not aware of any offer to acquire a stake in one of its investments in order to settle an outstanding debt due to National Bank of Egypt. Two other cement manufacturers, namely Arabian Cement (ARCC, up 29%) and Misr Beni Suef Cement (MBSC, up 26%) denied the existence of any material events that drove their stock price lately.
Elsewhere, some large caps delivered strong performance, led by Juhayna Food Industries (JUFO, up 20%) and EFG Holding (HRHO, up 16%), ahead of reporting their full-year 2024 results. On the other hand, the underperformers’ list was led by Premium Healthcare Group (PHGC, down 42%), Misr Kuwait Investment (MKIT, down 33.5%), and Rakta Paper Manufacturing (RAKT, down 24%).
As for the macro picture, the Central Bank of Egypt (CBE) is delaying its easing cycle to the second quarter of 2024, despite falling inflation. This should secure Egyptian banks with high profitability for some time.
STOCK ANALYSIS
Osool ESB Securities Brokerage Co. (EBSC)
Osool ESB Securities Brokerage Co. (EBSC) used to be one of the leading stock brokerage firms in Egypt with focus on individual investors. Majority owned by Osool Holding for Financial Investments with a 74% stake, the brokerage house ranked 25th in 2024 with a total trading value of EGP17.6 billion capturing a 0.7% market share, more than 70% of which was driven by individual investors. Early February, EBSC received a binding offer from UAE-based Amass Investments to take part in the former’s EGP100-million capital increase to be fully allocated to the latter through a private placement at a price per share to be set at the fair value assigned by an independent financial advisor. During this period, the stock jumped 42% to EGP1.03 after around 133 million shares changed hands worth some EGP140 million. The stock later jumped by as much as 50% to EGP1.54, valuing EBSC at EGP616 million.
