Reuters reported that EFG Hermes maintained a short term neutral rating on Egypt’s Ezz Steel and its unit Ezz Dekheila Steel, given the likelihood of further steel price declines and weak results through 2009.

The investment bank said that “We believe there is value in the stocks but given the cyclicality of the steel industry, we would be cautious about jumping in ahead of weakening Egyptian and world economies.”

It said that EFG has a long term buy rating on Ezz Dekheila, which reported a 30% jump in 2008 net profit to LE 2.97 billion on March 12th 2009.

EFG said that the two stocks will continue to remain volatile and that it does not expect a rally in the near term. It aid that Ezz Steel is on track to miss our net profit estimate for Q4 2008 of LE 201 million by almost LE 67 million.”

The investment bank said that results for Ezz Steel, which owns about 53% of Ezz Dekheila will likely be hit by limited production as the company closed a plant in November 2008.

(Source from Reuters)