Cairo - Mubasher: Food companies are expected to maintain prices due to the decline in skimmed milk powder prices year-to-date on the back of extra volumes being sold lately, Pharos Research said in a report on Wednesday.

Pharos muted any extra price increases as most companies have recovered their margins and have stated that no further rise in prices will take place if the exchange rate remains within current levels.

"We waited on the target price downward review, until we witness a third decline in auction prices, to get a confirmation on this decline momentum,” the research firm added.

Pharos has applied several changes to its models, to reflect the latest developments.

The research firm has raised its fair value (FV) evaluation for Juhayna to EGP 7.88, with an "Equalweight" recommendation.

As for Domty, Pharos also increased its FV to EGP 9.87 with an "Overweight" recommendation, on the other hand, it lowered Obour Land’s FV to EGP 11.41 with an "Equalweight" recommendation.

“Milk powder prices have been acting in a volatile nature over the past three years. 2016 saw the Global Dairy Trade Index up by 55% between July and December,” the report indicated.

“The weaker New Zealand dollar also supports the decline.”