How would natural gas price rise affect industrial sector, stock market?
Egypt has increased natural gas prices for the industrial sector to $5.75/MMBtu, except for companies that calculate gas costs based on a formula tied to selling prices.
Stock market experts believe that while the gap between the future values (FVs) and current market prices is not wide, because stocks had initially failed to reflect the profitability spike, the market will not take the news well and stocks will be under pressure.
Al Ahly Pharos Research said that the only scenario that would save the upside potential for the industrial sector, in general, is that the government would utilize a formula-based gas cost, even if applied with a time lag. Technically, the Fuel Pricing Committee should look into gas costs every quarter. Accordingly, this is not a far-fetched scenario.