Egyptian businessman Abdallah Sallam has seen the market value of his stake in Madinet Nasr Housing and Development (MNHD), a Cairo-based real estate development firm, fall by roughly $4.5 million in the last 45 days.
MNHD, one of the region’s largest property developers, was founded in 1959 as a public real estate corporation with the purpose of constructing 40 million square meters of land in Nasr City, a city of 3 million people.
Sallam, a well-known Egyptian businessman and the founder of MINKA Development, MNHD’s newest wholly-owned subsidiary, owns 5 percent of the real estate firm in total.
MNHD shares were trading at EGP2.48 ($0.126) per share as of press time on Oct. 12, giving the real estate firm a market cap of EGP5.21 billion ($265 million), while Sallam’s five-percent shareholding is presently valued at EGP260.4 million ($13.24 million).
Since Aug. 28, exactly 45 days ago, shares in the biggest real estate firm have dropped by more than 25 percent, falling from EGP3.32 ($0.169) to EGP2.48 ($0.126) at the time of writing.
The 25.3-percent drop in MNHD shares on the Egyptian Exchange can be attributed to investors’ decision to reduce equities exposure and direct investment towards risk-free assets such as government bonds and treasury bills backed by the Egyptian government’s “full faith and credit.”
As a result of the recent downturn, the market value of Sallam’s stake has declined by EGP88.2 million ($4.48 million) in the last 45 days, from EGP348.6 million ($17.72 million) on Aug. 28 to EGP260.4 million ($13.24 million) at the time of writing this report.
Under a memorandum of understanding (MoU) with Al-Hazek Construction, a subsidiary of Al-Hazek Group, MNHD under the leadership of Sallam recently agreed to carry out construction works for EGP1.50 billion ($77.2 million) in Cairo, Egypt’s capital city.
The first project to be finished under the conditions of the two-year contract, according to the agreement, is Shalya in New Cairo’s Taj City, which is slated to be completed in 18 months.
The project will comprise the construction of 34 residential buildings totaling 941 apartments spread across 34 feddans in Shalya (14.28 ha).
