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Citigroup cuts Egypt's OCI to sell - Daily News Egypt

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Citigroup cuts Egypt’s OCI to sell

Citigroup downgraded Egypt’s Orascom Construction Industries (OCI) to "sell" from "hold," saying ongoing fierce competition across the Middle East and North African region’s construction market would lead to margin erosion for the company over the medium term. The brokerage said OCI’s management stated that it would not compromise on margins for the sake of new …


Citigroup downgraded Egypt’s Orascom Construction Industries (OCI) to "sell" from "hold," saying ongoing fierce competition across the Middle East and North African region’s construction market would lead to margin erosion for the company over the medium term.

The brokerage said OCI’s management stated that it would not compromise on margins for the sake of new orders — a strategy not shared by the builder and fertilizer maker’s more aggressive competitors.

In order to gain some major awards, which are in the pipeline, Egypt’s biggest listed firm by market cap would need to accept lower margins, analyst Heidy Rehman said in a note.

However, the analyst remains positive on the near-term outlook for urea and ammonia fertilizer pricing and sees OCI as well-positioned to benefit from sustained wheat prices given its exposure to nitrates.

OCI has been capitalizing on the strong pricing environment for nitrate-based fertilizers, offsetting the impact of softer urea prices.

The brokerage also lowered its price target for the stock to LE 220 from LE 245.

 

 

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https://wwww.dailynewssegypt.com/2010/09/02/citigroup-cuts-egypts-oci-to-sell/
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