According to an article in Al Borsa, Egyptian Kuwaiti Holding's (EK Holding) [EKHO.CA] subsidiary, Bawabat Al Kuwait, has settled an arbitration case that was raised against the Egyptian government in relation to the government raising gas prices on its nitrogen based fertiliser company Alexfert from USD3/mmbtu to USD4.5/mmbtu. It is worth noting that the case was raised in 2011 after the Egyptian government had raised gas prices on the company's subsidiary Alexfert to USD4.5/mmbtu. According to the news article, Bawabat Al Kuwait dropped the arbitration claim for USD1.2bn in damages, while government sources mentioned that the government had agreed to fully supply the company's gas needs starting mid-August.   The details of the settlement with the Egyptian government are not yet fully clear, but we think there may be upside to EFGe numbers if the government agreed on i) increasing gas supplies to Alexfert; and/or ii) if the decision involves cutting gas prices to USD3/mmbtu levels again. While we remain bearish on nitrogen-based fertilisers, given the market oversupply and depressed decade low pricing, we remain Buyers of EK Holding as we think that the company's diversified operations and attractive valuation levels offer upside from current levels. (Al Borsa, Ahmed Hazem Maher)   Egyptian Kuwaiti Holding: USD0.46 as of 25 July 2016, Rating: Buy, FV: USD0.80 per share, MCap: USD471mn, EKHO EY / EKHO.CA