Sudden shift of fortune for Egypt's troubled Palm Hill Developments

The outlook on Egypt's Palm Hills Developments has gone from dreadful to decent - in less than a week.

Things had been looking bleak for the company. Its shares were down 60 per cent since the beginning of February and its chairman, Yasseen Mansour, was on trial accused of corruption linked to state land sales.

But on Tuesday Mr Mansour was cleared of the charges, prompting the shares to surge as much as 10 per cent, and analysts said they were taking a fresh look at the stock.

Rehab Taha, a property analyst at Prime Securities in Cairo, said the company remained undervalued and trading at a discount to the rest of the property market. She said she maintained a "neutral" rating on the stock, with her enthusiasm tempered by the company's weak cash position and the high cancellation rate on its properties.

The cautious but favourable view on the developer was echoed elsewhere as analysts at HSBC increased their price target on the company to 2.5 Egyptian pounds, from 1.7 pounds. The analysts also retained a "neutral" rating.

Palm Hills yesterday pared off some of its earlier gains and declined 2.4 per cent to 2.45 pounds. Analysts said the fall was probably linked to a slump on the wider benchmark index, the EGX 30, which closed 2 per cent lower at 5,327.42 points.