Juhayna Gains as Packaged Milk Demand Boosts Profit: Cairo Mover

Juhanya Food Industries climbed to a record as demand for packaged milk helped Egypt’s biggest dairy producer more than double first-quarter profit.

The company’s stock increased 1.6 percent to 9.11 Egyptian pounds at the close in Cairo, the highest since Juhayna sold shares to the public in June 2010. Volume was almost three times the three-month daily average, according to data compiled by Bloomberg. Juhayna was the third-biggest advancer on the benchmark EGX 30 Index, which gained 0.6 percent.

The foodmaker’s shares have surged 18 percent this year, outperforming the benchmark gauge, which declined 1.1 percent amid escalating political instability. Juhanya’s first-quarter sales increased 28 percent, helping boost profit to 96 million pounds ($13.8 million) from 43 million pounds a year earlier, according to a filing to the bourse today.

“The underlying demand fundamentals are still very strong as consumption for their core products grows, mostly driven by the shift from loose to packaged milk,” Hatem Alaa, an equity analyst at Cairo-based EFG-Hermes Holding SAE, said by phone. The stock is “one of the safer investments in Egypt at the moment.”

The share’s relative strength index rose to 86 today after crossing 70 on April 30. A reading of above 70 signals to some traders that the stock is poised to decline.

Juhayna’s investment to start its dairy farm may reach 725 million pounds, 2.4 times the initial projection, Cairo-based CI Capital Holding said in March. CI Capital set the stock’s 12-month price estimate at 8.6 pounds with a neutral rating. Another five analysts have a hold rating on the stock, while two recommend buying and two selling, according to data compiled by Bloomberg.

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