Egyptian investment bank EFG-Hermes said it cut its long-term fair value estimate on Orascom Construction Industries because of volatility in oil and commodity prices. EFG-Hermes cut its estimated fair value of Orascom, Egypt s largest builder by market value, to LE 205 per share from LE 310.40 on Wednesday.
Orascom shares, the worst performer this year on Egypt s benchmark CASE 30 index, closed at LE 115.11 on Tuesday. The stock has fallen 14 percent this year to Tuesday s close.
Lower oil prices mean building demand in Orascom markets including Algeria and the Gulf Arab countries could fall, EFG-Hermes said. Lower oil prices could also decrease the floor price for commodities including fertilizers, EFG-Hermes said.
OCI has said it would concentrate on fertilizers after selling its cement unit to French company Lafarge in 2007. It has fertilizer operations in Egypt, Nigeria, and Algeria.
In related news, EFG-Hermes buyback program of 5.05 million shares began Wednesday and will expire on Feb. 20. The shares represent both local shares and GDRs. -Reuters
