Thursday, 19 June 2014

The Breakout Trader: Mota-Engil Africa

 I am posting another entry from the Blog The Breakout Trader. This entry is about the Construction sector Portuguese Mota-Engil company and its African subsidiary Mota-Engil Africa. The company is preparing a first floatation in the Capital Markets with an IPO in the London Stock Exchange, and The Breakout Trader analyses the share price behaviour in the near term as well as looking to the weeks ahead. For the Portuguese audience please check the link at the bottom. Here it is an English translation:

''Mota-Engil is to proceed with the initial public offering (IPO) of its African subsidiary, which will be listed on the London Stock Exchange.In a statement to the CMVM the construction company announced that this operation will be carried out through two offerings, a "preferential" and other "institutional". Thus, the preferential offer "Mota-Engil Africa allocate new shares to all investors who hold shares of the parent - Mota-Engil SGPS - until tomorrow, 17 June, which is leading to a rush for the purchase of shares Mota-Engil which now rise 4.15%. A parallel run of an institutional offering will happen, which will show the number of shares increase if demand for shares in preferred not cover the entire offer.Investing in Mota-Engil Africa seems to me to be a good alternative for those who want to be exposed to the growth of the African continent. In addition to the shareholder remuneration proposal which is quite generous the company intends to achieve a payout ratio between 50% and 75% and is now guaranteed a cash dividend of 20%, approved by the shareholders of Mota-Engil. Moreover, Mota-Engil Africa will benefit from being listed in an index with greater visibility than the national and aimed more at the construction sector.For shares in Mota-Engil, as already stated in the previous analysis, this separation is rather negative, given the strong impact that billing obtained on the African continent has to the group accounts. Recall that, according to the latest annual report, the activity in Africa accounted for over 40% of the turnover of the parent company.Tomorrow being the last day for the purchase of shares entitled to participate in the IPO, I believe that the shares of Mota-Engil can continue to value in tomorrow's session. After that, we are witnessing a correction in the titles, because we are close to the resistance given by the annual maximum € 6.25 / € 6.40.

The Breakout Trader: Amanhã será o último dia com direito a participaçã...: A Mota-Engil vai avançar com a oferta pública inicial (IPO) da sua subsidiária africana, que passará estar a cotada na bolsa de Londre...

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