Reuters reported that AlembicHC upgraded Ezz Steel, Egypt's largest steel maker to overweight from underweight and said it does not expect allegations against the company's chairman over the acquisition of state owned Ezz Dekeila Steel to affect minority shareholders.

Mr Ahmed Ezz who was a top official in ousted president Hosni Mubarak's party was accused of illegally taking control of Al Dekheila Steel which booked heavy losses as it supplied Ezz with steel at reduced prices.

The brokerage said that allegations pertaining to Ezz Dekeila Steel acquisition are a risk but we believe any negative outcome would be specific to Ahmed Ezz and is unlikely to harm minorities. Even if Ezz Steel spun off its Ezz Dekeila Steel unit, financial authorities would ensure that minorities were compensated in cash and Ezz Dekeila Steel shares.

AlembicHC which maintained its price target of EGP 14.8 on Ezz Steel shares noted that the company's shares have plunged 33% since the Egyptian stock market resumed trading in late March.

(Sourced from Reuters)