Cairo – Mubasher: Pharos Research said Thursday that it has maintained its fair value (FV) of Ezz Steel at EGP 14 per share and Al Ezz Dekheila Steel at EGP 600 per share.
The planned cut in prices of natural gas for steel companies from $7.00 per one million thermal units (MMBTU) to $4.50 per MMBTU in 2018 will have a positive impact on the stocks of the two companies.
Accordingly, Ezz Steel’s FV could exceed EGP 30 per share and Al Ezz Dekheila Steel’s FV could exceed EGP 1,200 per share, according to the report.
Earlier on 9 March 2016, Egypt’s minister of trade and industry announced that the government agreed to reduce natural gas prices for steel producers to $4.50 per MMBTU for one year, to be reviewed afterwards..
Six months later, Egyptian Natural Gas Holding (EGAS) rejected the decision, citing that natural gas cost stood at $7.15 per MMBTU, and accordingly, it claimed that the proposed cut in natural gas prices will result in an annual loss worth EGP 3.2 billion to EGAS, if steel companies secured natural gas at $4.50 per MMBTU, the report stated.
