SODIC makes its share more appealing
Reuters, Ahram online, Friday 10 Dec 2010
Sodic, the third biggest real estate listed company is to split its share to 5 shares, after its price reached the highest level in 28 months


Six of October Development and Investment (SODIC) is seeking more trading for its shares, as the listed company announced a stock split five shares on Thursday.

Each stock will be split into five, and priced at 20 per cent of the original stock.

A company thinks of a stock split when its price is soaring, making it less "sexy" in the eyes of small investors on the stock market. This is the case for Sodic.

The stock price increased by 32.5 per cent in 2010, almost three fold the EGX 30 increases (10.7 per cent).

SODIC's share reached LE110 ($19) on Thursday and is considered the highest level in 28 months. Its stock jumped by 14.5 per cent during the last quarter and the market main index, EGX 30 by 6.6 per cent.

In the last trade on the stock on Thursday, SODIC rose by 1.9 per cent to reach LE105.

"We try to raise the availability of stock for small investors in the Egyptian stock exchange, therefore increasing the trading and benefiting the company's current shareholders," the SODIC Board of Directors told Reuters.

"Stock split will not add anything to the shareholders but in the Egyptian market, share prices usually rise after stock split news", said Hossam Abo Shamla, head of the research department at Ouroba company.

"I expect the stock to rise by 20 or 30 per cent in the next session, depending on EFSA approval and will be close to its fair value," he added.

"The share split will not change the assessment of the stock because it will only increase the number of shares outstanding," said Harshjit Oza, a financial analyst at Beltone.

"SODIC's stock price is higher than all the stocks in the real estate sector such as the Talaat Moustafa Group and Palm Hills," added Oza.

The stock will be suspended from trading until the Egyptian Financial Supervisory Authority (EFSA) takes the decision of either approving or rejecting the split.

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