Last Week’s Market Summary
EGX 30: 11,125 (+2.9%) weekly change, YTD (+2.5%)
Traded Value 1W Avg: EGP 584M, (+24%) 90D Avg.
USD:EGP: 15.70 (0.0%) weekly change
20% intraday share price limit effective September 5🏛️
Earlier this month EGX Chairman Dr. Mohamed Farid issued law no. 681 of 2021. The law increases the intraday share price movement limit to 20%, introduces a new closing price methodology, and a new “pre-close auction.”
Let’s break it down〽️: Firstly, limits on share price movements are increasing from 10% to 20% for the EGX, and from 5% to 10% for the Nilex. Secondly, a new closing price methodology that uses a 30-minute moving-volume weighted average price (Moving VWAP) will be implemented, which takes into account the traded volume during the last 30 minutes for transactions with a minimum value of EGP 100,000. This new methodology comes in place of calculating the VWAP for the entire trading session. Thirdly, a new “pre-close auction” is being introduced.
What’s a “pre-close auction”🤷: Every trading session at 2:15 PM, investors will be able to put buy and sell orders, but the orders won’t be executed. They will instead be used to come up with a “pre-close adjusted” price around 2:25 PM, once the pre-close auction is over. Trading resumes around 2:25 PM at the new pre-close adjusted price.
Why is this important🤔: This is not the first time the share price movement limits reach 20%. Prior to 2011, the 20% cap was in effect. The 10% cap came into effect under measures taken by the Egyptian Financial Regulatory Authority (FRA), to protect the market from aggressive volatility following the 2011 revolution. The new closing price methodology, as well as the “pre-close auction”, are steps towards conforming to global best practices.
Speed Medical abandons acquisition of Prime Speed💔
Speed Medical (SPMD) board of directors decided not to go through with the acquisition of Prime Speed Healthcare.
Who is affected🤷: SPMD cited several reasons for this decision. These reasons included failure to achieve sales target set for Japanese-made products, increased competition for PCR tests, incompatibility of strategies among both companies’ boards, a solid financial position for SPMD that does not require the additional liquidity the acquisition would provide, and finally Prime Speed’s drive-thru-based business model that may not be needed once COVID-19 is over with.
Why is this important🤔: Trading on SPMD was suspended on Wednesday until SPMD responded to the FRA’s inquiries regarding the acquisition deal of Prime Speed The company said in a statement to the EGX that the board is satisfied with the current ownership share of 30% of Prime Speed.
Egypt sets the size of debut Sukuk issuance🌙
Finance Minister Mohamed Maait told CNBC Arabia on Wednesday that Egypt’s first Sharia-compliant bond (Sukuk) issuance will be between $1-2 billion.
Who is affected🤷: In a statement released by the Ministry of Finance on Tuesday, the government plans to set up a state-owned company to manage the Sukuk issuance, which could be offered in local or foreign currency. The issuance is expected to take place sometime in the second half of the current fiscal year (first half of 2022).
Why is this important🤔: Sukuk will be Egypt’s fourth source of financing, along with treasury bills, domestic & foreign loans, and credit facilities. It is set to attract investors interested in investing in Sharia-compliant investment assets.
- SODIC (OCDI) says new location proposed for New Zayed project
- Telecom Egypt (ETEL) to provide integrated communication solutions for Amer Group’s projects
- Cairo for Investment & Real Estate Development (CIRA) board approves EGP 100m dividends
- Egyptian Kuwaiti Holding (EKHO) gets FRA’s approval to launch microfinance firm
- EGX approves United Housing’s (UNIT) capital reduction
Manchester United stock surges as Cristiano Ronaldo returns⚽
Manchester United’s (MANU) stock price rallied following both investors and fans’ delight over the return of the Portuguese to the club.😈
The English club’s stock is listed on the New York Stock Exchange (NYSE). Following a Friday evening tweet by the club welcoming Ronaldo Home, the stock went up as high as 9.7% during Friday’s trading session and closed at 5.8% in the green.
Why is this important🤔: Manchester United fans & MANU investors will be hoping Ronaldo brings back the glory days for the club, which in recent years has gone from one disappointing season to another.
- Cleopatra Hospitals Group (CLHO) reported EGP 202 million in H1-2021, a 98%YoY increase
- SODIC (OCDI) recorded a 203% YoY increase in its consolidated net profits, logging EGP 225.84 million in H1-2021
- Faisal Islamic Bank of Egypt (FAIT) posted a consolidated net profit of EGP 1.09 billion in H1-2021, a 32% YoY increase
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