MARKET WATCH — The Comeback Resumes
STOCK ANALYSIS: Rameda (RMDA)
Written end of March 2025 for Business Monthly - April 2025 Issue
MARKET WATCH
Last month’s comeback seems to have been a change in direction. Both main market indices rose during the period from Feb. 15 to Mar. 15., further extending their year-to-date (YTD) performance; the EGX 30 added another 4.3% to 5.2% YTD, and the EGX 70 EWI added another 4.6% to 7.9% YTD. The EGX 30 finally managed to penetrate the 30,000 psychological level, suggesting a recovery by large caps which are yet to overtake small caps.
Indeed, small caps are still ahead in terms of performance, led by some names familiar to retail investors. For instance, shares of New Ismailia for Urban Development (IDRE) rose 94% during the period to EGP34.01, yet the company denied any material events or information that led to such an outstanding performance. The company’s earnings rose more than 21 times year-on-year, albeit to around EGP14 million in 2024 on higher revenues driven by rental income.
In contrast, earnings were not the driver behind the strong performance of Misr National Steel - Ataqa (ATQA, up 56% to EGP8.20). The company’s earnings fell 21% year-on-year to around EGP578 million in 2024 despite doubling its revenues to EGP5.43 billion as financing expenses and a drop in the fair value of some financial investments ate into profits. But what drove the stock higher was an EGP1.9-billion deal whereby Organi Group will acquire a 26.25% indirect stake in ATQA. This came after Ezz Steel (ESRS) went through with its delisting off the Egyptian Exchange (EGX), which brought ATQA under the spotlight as the other alternative to having an exposure to the steel industry in Egypt.
Meanwhile, the health care sector in general and the pharmaceutical industry in specific were among the top performers, led by Memphis Pharmaceuticals (MPCI, up 50% to EGP83.96), Rameda (RMDA, up 38% to EGP4.63), Ibnsina Pharma (ISPH, up 30% to EGP8.00), and Cairo Pharmaceuticals (CPCI, up 25% to EGP134.74). While pharmaceutical companies continue to benefit for product repricing, ISPH stands to benefit twice, once from the product repricing and once from an expected decline in interest rates starting this year.
Elsewhere, shares of EFG Holding (HRHO) rose around 20% during the period to EGP27.35 a few days before reporting an all-time high earnings of EGP4.25 billion in 2024, up 71% year-on-year. Concurrent with its earnings release, HRHO revealed its intention to directly list valU, its well-known consumer finance arm, on the EGX by June.
But the latest direct listing on the EGX has not been performing that well. Go Green for Agricultural Investment & Development (GGRN), which started trading on Feb. 9, fell 29% during the period to EGP1.10 a share, which is 38% below its EGP1.77 a share fair value set by an independent financial advisor.
As for the macro picture, Egypt’s real GDP growth rate rose to 4.3% in the quarter ended Dec. 2024, while the unemployment rate fell to 6.4%. Going forward, investors await the Central Bank of Egypt’s (CBE) decision on Apr. 17 as far as interest rates are concerned.
STOCK ANALYSIS
Rameda (RMDA)
Since the start of the year, Rameda’s (RMDA) stock rose around 39% through mid-March 2025. However, most of the stock’s positive performance took place during the period, having risen by 38% to EGP4.63. The company recently reported its full-year figures for 2024, hitting all-time high records in terms of revenues and earnings. Indeed, revenues rose 44% to EGP2.77 billion, and earnings rose 58% to EGP387 million. The company’s management even proposed to distribute around 40% of its 2024 earnings, translating into a dividend yield of around 2%. RMDA benefited after the Egyptian Drug Authority began allowing pharmaceutical companies to revise their selling prices higher, mainly during the second half of 2024.
