Cairo-Mubasher: Naeem Research has maintained its Hold recommendation on GB Auto stock, following news that the company is considering a capital increase.
The Egyptian Exchange (EGX) announced on Tuesday it is studying a request received from Egypt's car assembler GB Auto for capital increase.
The company said earlier it was seeking to raise issued and paid-in capital to EGP 1.095 billion for original shareholders. The EGP 960 million increase is divided into 960 million shares at EGP 1 par value plus EGP 0.01 issue premium each.
This move is aimed at financing the promising investment opportunities in the Egyptian economy, as well as studying the attractive opportunities and expansions in the region.
“In light of recent rights issue carried out on EGX by companies like SODIC, Palm Hills and EK Holding, we predict a positive turnout by investors/shareholders towards GB Auto’s rights issue,” the research firm said.
It added that GB Auto’s chairman Raouf Ghabbour may subscribe to the company’s capital increase.