EFG-Hermes cuts Orascom Construction fair value

NOT FAIR: Orascom has been the worst performer this year on Egypt's benchmark CASE30 index. (Getty Images)

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 205 Egyptian pounds ($37.01) per share from 310.40 pounds ($56.04) on Wednesday.

Orascom shares, the worst performer this year on Egypt's benchmark CASE30 index closed at 115.11 pounds ($20.78) 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 fertilisers, EFG-Hermes said.

OCI has said it would concentrate on fertilisers after selling its cement unit to French company Lafarge in 2007. It has fertiliser operations in Egypt, Nigeria, and Algeria. (Reuters)

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