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Egypt's Sewedy wins Qatar contact amid regional worries

Cable maker benefits from Qatari infrastructure surge but exposure elsewhere in Mideast could prove a liability, says brokerage

Reuters, Monday 11 Apr 2011
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Egypt's El Sewedy Electric, the Arab world's biggest listed cable maker, said on Monday its Qatari unit had won a cable supply contract worth US$440 million, helping boost its presence in the Gulf nation.

"This is an important event for Sewedy Electric because it upholds the firm's presence in the Gulf," the firm said in a statement. "We believe Qatar represents an important market for us, particularly after the government announced its enormous investment plan for infrastructure."

The news came as Egypt's CI Capital cut its price target on Sewedy's stock by 28 per cent, saying the company's extensive presence in the Middle East and North Africa region could prove a temporary liability given recent unrest.

Sewedy is exposed to regional instability and associated business risks but its European and African operations may help reduce these risks, the brokerage said.

CI Capital cut its price target on Sewedy, which has production plants in Egypt and 10 other countries, to LE45.4 from LE63.4.

It, however, maintained its "hold" rating on the stock, and said it expects the company's turnkey business to benefit from public-private partnership projects in the short-to-medium term.

Sewedy on Wednesday said its fourth-quarter net profit rose 16 per cent to LE97.5 million on revenue of LE3.69 billion.

Shares of the company, which also makes windfarm equipment, closed at LE40.79 on Sunday.

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