3 factors define TMG Holding outlook amid Saudi anti-corruption crackdown - Analysis

3 factors define TMG Holding outlook amid Saudi anti-corruption crackdown - Analysis
3 factors define TMG Holding outlook amid Saudi anti-corruption crackdown
TMG Holding TMGH -0.88% 9.06 -0.08

By: Heba El-Kordy

Cairo – Mubasher: Talaat Moustafa Group Holding’s (TMG Holding) stock was the most affected by the Saudi Royal anti-corruption crackdown.

TMG Holding’s stock dropped on Monday to its lowest level since 4 October 2017 amid investors’ concerns over the company’s investments with the Saudi businessman Al-Waleed bin Talal.

By 12:43 pm Cairo time, TMG Holding fell 5.3% at EGP 8.95 at a turnover of EGP 34.18 million.

At least three factors would shield TMG Holding’s stock from the political situation in Saudi Arabia, analysts told Mubasher.

 

Strong financial results

Seizing bin Talal’s money will not highly affect the performance of TMG Holding over the coming period, research analyst at Prime Holding Mohamed Marei told Mubasher.

The EGX-listed company recorded the strongest revenues in almost four years, Marei highlighted.

The company achieved net profit of EGP 410.8 million in the third quarter of 2017, versus EGP 188 million in Q3-16, including minor shareholders’ rights.

Marei forecasted the real estate company to record annual revenues of EGP 7.3 billion and profits of EGP 1.2 billion by the end of 2017.

Prime has set its fair value (FV) of TMG Holding at EGP 15.42 per share, he indicated.

Bin Talal’s investments in the Egyptian company were going to boost revenues, but cancelling these deals will not negatively affect the company’s performance over the coming period, he mentioned.

The sideways-to-declining performance of TMG Holding’s stock will vanish over the next two sessions, Marei said.

 

Selling units

Mai Radwan, analyst at Mubasher Research, said that seizing bin Talal’s money would not affect the company’s revenues over the coming period.

TMG Holding’s revenues from hotels represent 18% of total revenues, Radwan noted, adding that revenues mainly depends on selling units by 80%

 

Strong stock

Saeed El-Feki, CEO of Osool ESB Securities Brokerage, said that TMG Holding’s stock highly affected by the Saudi news.

TMG Holding should reveal the volume of its mutual investments with the Saudi businessman Al-Waleed bin Talal to inform investors of how the firm was impacted by the Saudi government’s secisions, El-Feki pointed out.

El-Feki noted that the stock would be able to settle at EGP 8.7 again, adding that it is a strong stock that does not get affected by negative news for a long time.

 

Translated by: Mai Ezz El-Din

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Source: Mubasher Exclusive

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