“The first medium-term bullish reversal signal in Egypt Kuwait Holding (EGX: EKHO) has been materialised after taking out the long-term declining trendline (check both the red line and the red circle). After this breakout, and for many months, the bulls were not able to force the stock decisively over the key resistance level at 0.70,” the report said.
Last week, Egypt Kuwait Holding (EK Holding) said that profits worth $30m (KWD 9m) were realised from the exiting I Squared Capital Fund, according to a bourse statement issued on Wednesday.
On Tuesday, the company, which is listed on both Boursa Kuwait and the Egyptian Exchange (EGX), announced selling its entire 15% stake in I Squared Capital Fund for $60m (KWD 18.12m).
Following this exit deal, Pharos Research has raised the fair value of EK Holding to $0.86 from $0.83.
“This week, we have got the REAL bullish signal! The stock has cleared the structure resistance level decisively, the trading activity has increased relatively and now the stock is moving officially in an up-trend,” Markets Chimp added.
“It might go up easily to (0.90-1.00) but we think that this is just the beginning! As long as the stock keeps rising over 0.70 and as long as the trading volumes keep increasing, then the stock will rise to 1.15 then 1.35. The medium-to-long term traders are advised to Buy,” it added.
The company said that it sold its 15% stake in “I Squared Capital Fund” at a value of $60m, according to a statement to Boursa Kuwait.
The transaction was implemented on Monday’s evening.
In 13 August, Egypt Kuwait Holding board of directors authorised the chairman and the managing director to negotiate about selling the 15% stake.
EKHO profitability was driven by AlexFert’s continued turnaround, recording revenue levels last seen in the first quarter (Q1) 2017, and prior to the natural gas shortage crisis.
Alexfert’s, a subsidiary of EKHO, Q1 2017 revenue increased significantly on a quarterly and yearly basis, driven by high utilisation rates, a rally in urea prices, and a large increase in volumes exported to benefit from the high price difference between local and international urea prices.
The company posted a 24.8% year-on-year rise in its profits during Q2 2017.
Profits reached KWD 4.13m ($13.71m) in Q2-17, compared to KWD 3.31m ($10.98m) in Q2 2016.
In the first half (H1) of 2017, profits grew 10.8% to KWD 10.78m from KWD 9.73m in the prior-year period.
The company’s positive results are mainly attributed to a rise in overall profits and interest revenues, according to a press release.