CAIRO - Investment bank and equities researcher EFG-Hermes has raised its long-term fair value estimates for three Egyptian cement companies because of their exposure to a more favorable export market. But it cut its estimates for two other companies because of changes in the domestic market, where higher energy costs and government pressure to hold down prices have squeezed profit margins, it said in a report received on Monday. The government decided in July to raise the prices industrial companies pay for natural gas by 30 percent and for fuel oil by 67 percent, adding about 10 percent to the overall cost of making cement in Egypt. But the government has also persuaded the cement companies to accept a cap on cement prices at LE 330 ($57.59) a ton for retail and LE 290 ex-factory, it said. Other factors that affect estimates are the many new real estate projects, which should add to demand for cement, a growth in the cement deficit in several countries that import from Egypt and the announcement of more capacity additions. The companies it is upgrading are Sinai Cement, Misr Beni Suef and Misr Cement Qena. It cut its estimates for Torah Portland Cement and National Cement. EFG-Hermes gave buy recommendations for Sinai Cement and Misr Beni Suef, neutral recommendations for Misr Cement Qena and Torah, and a reduce recommendation for National Cement.
