AlembicHC raises El Sewedy to overweight

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CAIRO: El Sewedy Electric is poised to benefit from falling copper prices, said AlembicHC and upgraded the company’s stock to "overweight" citing compelling valuation.

The brokerage said it expected Sewedy’s Turnkey division, which is a relatively high-margin business to represent a third of the company’s business by 2012.

"We expect the division…to continue to deliver strong results in the next couple of years, backed by strong demographics and the relatively low electricity access in its main markets of operation," the brokerage wrote in a note to clients.

Falling copper prices will also ease pressure on the company’s balance sheets, with every $100 fall in copper prices estimated to help the company’s copper cable business save as much as $33 per ton, the brokerage said.

AlembicHC also raised its price target on Sewedy, which has production plants in Egypt and ten other countries, to LE 31 from LE 30.5.

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