CAIRO: Credit Suisse said it expects sales volumes of Egyptian real estate developers to remain under pressure on continued weakness in property transactions, hurt by ongoing land title legal disputes. The brokerage, which has a cautious view on the sector, expects significant delays in project completion for some developers such as Palm Hills Development Co and Six of October Development and Investment Co (SODIC) . SODIC earnings will be hurt on increasing cancellations for previously sold properties, as it focuses on high-end residential and commercial properties, the brokerage said in a note. Credit Suisse cut its price target on the stock to LE 15.7 from LE 38.3 and has a "neutral" rating on the stock. The brokerage also cut its price target on Palm Hills to LE 1.32 from LE 3.08 and maintained its "underperform" rating on the company's stock. Palm Hills has a funding gap of about LE 600-800 million between the second half of this year and next year which will be difficult to finance in the current environment, the brokerage wrote. However, Credit Suisse upgraded Talaat Moustafa Group (TMG) to "outperform" from "neutral" on fewer cancellations compared to its peers, as the country's biggest listed developer continues to focus on middle-income properties. The brokerage said the strong fundamental demand in the housing market remains intact, especially in the middle and lower income housing segments and raised its price target on TMG's stock to LE 5.67 from LE 5.13.
