Cairo – Mubasher: MubasherTrade Research has put two scenarios for the Egyptian Exchange’s (EGX) main index EGX30 composition after acquiring Global Telecom.
The Financial Regulatory Authority (FRA) had previously said that a mandatory tender offer was submitted to 42.31% of Global Telecom’s capital at EGP 7.9 per share.
Hence, VEON will dominate more than 85% of Global Telecom in case most shareholders tended to sell their shares, which will be eliminated from the EGX30 index as it failed to meet the continuity rules, MubasherTrade highlighted in a recent report.
The research firm forecasted four more stocks to be removed from the index if the rebalancing was effective today, including Egyptian Financial and Industrial Co (EFIC), Arabian Food Industries Co (Domty), Oriental Weavers Carpet, and Cairo Oils and Soap.
Egypt Aluminum, Abu Qir Fertilizers, Credit Agricole Egypt, GB Auto, and Juhayna Food Industries are likely to replace the above-mentioned stocks, MubasherTrade noted.
In the second scenario, the research company expected Global telecom to remain as part of the EGX30 index if it complies with the selection and continuity rules.
As per this scenario, the stocks of EFIC, Domty, Oriental Weavers, and Cairo Oils are likely to be replaced by Egypt Aluminum, Abu Qir Fertilizers, Credit Agricole Egypt, and GB Auto, the research added.
The research indicated that Abu Qir Fertilizers is expected to have the highest weight within the potential stocks to be added to the EGX30 index in both scenarios, a 5.3% and a 5.0% weight in the first and second scenarios, respectively.
Credit Agricole to follow Abu Qir Fertilizers with a 2.8% and 2.7% weight in the first and second scenarios, respectively, MubasherTrade continued.
GB Auto and Egypt Aluminum would tail the potential stocks to be added with weights of 1.1% and 0.9% in the first scenario 1 and 1.1% and 0.8% in the scenario 2, respectively.
