MARKET WATCH — Surprise, surprise!
MARKET WATCH — Surprise, surprise!
STOCK ANALYSIS: General Co. for Ceramics & Porcelain ‘Sheeni’ (PRCL)
Written for Business Monthly - December 2023 Issue
MARKET WATCH
Who would have thought the Egyptian stock market would rally this much this fast? Even the most optimistic investor could not have considered the EGX 30 index would hit 25,000 this year, five weeks before the end of the year.
The index surpassed that 25,000 level intraday during trading on Nov. 20. But the period from Oct. 15 through Nov. 15 also was momentous, with the EGX 30 ending on a very positive note, up 18.8% to extend its year-to-date gain to 65.4%. Similarly, the EGX 70 EWI hit another all-time high, ending the period up 28.5% to extend its year-to-date gain to 72%.
With both leading market indices hitting all-time highs, a couple of stocks posted triple-digit returns: ASEC Mining (up 107%) and Wadi Kom Ombo Reclamation (up 105%). Year-to-date the list was close to 50 stocks, led by Misr Fertilizers Production Co. “MOPCO” (MFPC, up 305.5%) and General Co. for Ceramic Porcelain “Sheeni” (PRCL, up 266.5%).
In the prior period, the EGX 30 performance was led by MFPC and Abu Qir Fertilizers (ABUK). Meanwhile, CIB (COMI), the index heavyweight, was lagging. TMG Holding (TMGH, up 87.5% for the period) was by far the top performer, followed by Ezz Steel (ESRS, up 34%), Eastern Co. (EAST, up 30%), and Telecom Egypt (ETEL, up 25%). COMI, meanwhile, started to catch up, rising 20% in the period.
Elsewhere, it seems that the leading market’s surprise recovery enticed other companies to go public, albeit on the SME market, previously known as Nilex. Indeed, two companies went public recently. Digitize for Investment & Technology (DGTZ) floated 1.2 million shares or 10% of its issued shares for EGP 4.26 a share, valuing the company at EGP 51 million. The stock’s debut was on Oct. 22; it ended that day up 64%. By Nov. 15, DGTZ was up 73% off its IPO price. The company, which provides ICT solutions and engineering services, saw its nine-month earnings fall 32% to EGP 5 million.
More recently, Fitness Prime Health Clubs (FTNS), another SME, went public on Nov. 20 with 26.5 million shares floated or 20% of its issued shares for EGP 1.20 a share, valuing the company at EGP 159 million. The stock ended its first trading day up about 66%.
The CBE decided to keep interest rates unchanged. Now, investors have one last meeting to speculate on whether the CBE will choose to reset the counter to unify the exchange rate in the market. Regardless, the market has already priced in a steep Egyptian pound devaluation.
STOCK ANALYSIS
General Co. for Ceramics & Porcelain ‘Sheeni’ (PRCL)
General Co. for Ceramic Porcelain (Sheeni) continues to report gross loss. Shareholders (led by state-owned Holding Co. for Metallurgical Industries, 57% stake) decided to keep it open despite retained losses surpassing half its book equity. Midfert Misr has raised its stake in the company to 12.3%. Last full-year earnings were saved by capital gains from a land sale. That led PRCL’s stock to rise 91% and extend its year-to-date gain to 266.5%. Rumor has it there is interest in acquiring the company, which management denied.
