Al Ahly Pharos

Al Ahly Pharos

Welcome to our daily podcast featuring the day's top news commentary and technical recommendations delivered to you before the opening bells of the Egyptian Stock Exchange (EGX).Alongside our morning podcasts, we will be publishing a collection of episodes presenting indepth analysis and insights on EGX's equities, all brought to you by Al Ahly Pharos. read less
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Pre-Trading Thoughts
2d ago
Pre-Trading Thoughts
The ADQ on Tuesday deposited the first tranche of its USD35 bn Ras El Hekma investment at the CBE,  El Sisi said.Egypt has inked seven MoUs with international and local companies to develop green hydrogen and renewable energy projects worth USD41 bn in the Suez Canal Economic Zone over the next ten years.The Madbouly government is looking into a proposal from Italian industrial manufacturer Danieli to establish a USD4 bn integrated industrial complex for the production of iron and steel products that will create 17k jobs. The project could also attract a further USD2-3 billion in investments for a green hydrogen plant.BP's plans to invest USD1.5 bn in Egypt over the next three to four years, according to Bloomberg. Maersk has begun due diligence for the 545-MW Zafarana wind farm as it paves the way to submit a final offer to acquire half of the assets, while the UK-based private equity giant Actis has reportedly wrapped up due diligence on the state-owned 580-MW Gabal El Zeit wind farm.TMGH (FV: EGP73.80, OW) released 4Q23 results. Net profit reached EGP629.3 million in 4Q23 (+106.5% y/y, -44.0% q/q), bringing FY23 net profit up 43.8% y/y to EGP3.3 billion. The Board proposed the distribution of EGP0.218/share cash dividends, implying a DY of 0.3%. We raise our FV from EGP42.95/share to EGP73.80/share as a result of raising our sales projections across our forecast horizon.PHDC (FV: EGP7.11, OW) released 4Q23 results. Net profit in 4Q23 increased 54.3% y/y and 20.6% q/q to EGP532.2 million, bringing FY23 net profit up 25.9% y/y to EGP1.6 billion. We raise our FV from EGP5.59/share to EGP7.11/share as a result of raising our FY24 sales forecast.According to local media, PHDC (FV: EGP7.11, OW) aims to invest EGP9.5 billion in its projects in FY24 and expects FY24 sales to be similar to the FY23 level of EGP59.5 billion.According to local media, OCDI aims to invest EGP10.0 billion in construction activity in its projects in FY24, compared to EGP6.0 billion invested in FY23.HDBK released a summary of its 4Q23 financial indicators. Standalone bottom line recorded a strong EGP1,612 million (+220% y/y, +15% q/q). Bringing FY23 bottom line to EGP6,031 million (+167% y/y). BoD proposed distributing cash dividends of EGP3.00/share from 2023 net profit with a payout ratio of 26% and DY of 5.5%.TAQA released 4Q23 unaudited financial indicators posting a 2% YoY decline (-3% QoQ) in net profit to record EGP192 million in 4Q23. Net profit increased by 3% YoY to EGP557 million in 2023. TAQA is currently trading at a 2024f P/E of 35.0x.US-based ExxonMobil is reportedly looking to start drilling the first of three natural gas exploration wells in the Mediterranean’s North Marakia concession in October, with initial investments of about USD100 million. ORWE (FV: EGP23.42, OW) released positive 4Q23 results. Attributable net profit recorded EGP443 mn (+40.3% YoY, -25.6% QoQ). FY23 attributable net profit recorded EGP1,742 million (+106.4% YoY). BoD proposed dividends for FY23 of EGP1.25/share with a payout ratio of 48% and a DY of 6%.
Pre-Trading Thoughts
3d ago
Pre-Trading Thoughts
Prime Minister held a meeting to look at offers submitted for Wataneya state-owned fuel retailer. Taqa Arabia is the only firm to have publicly declared interest, and Shell has reportedly also made a bid.The IMF has resolved key issues with Egypt in a review of its previous USD3 bn loan program from the Fund, setting the stage for an augmented financing package “within weeks”.Egypt's 5-year CDS rates sharply declined recording 6.76% on Monday, down from 9.85% on Friday, apparently responding to Ras Al Hekma deal news. Yield on Egypt's Eurobonds also declined, with yield maturing in June 2025 dropped to about 8% compared with more than 13% two weeks before.The Official Gazette published a presidential decree to allocate a plot of state-owned land with an area of 170.8 million square meters in the Matrouh Governorate, to establish the new city of Ras El-Hikma, transferring it from lands owned by the armed forces.The Economic Authority for the Golden Triangle, is studying offering the industrial zones in the area to an industrial developer, to be divided and developed according to a detailed plan into different production units.Qatar Islamic Bank and Kuwait Finance House have completed their due diligence for United Bank in December. The transaction could reportedly reel in the USD equivalent of EGP22 bn, which is currently worth USD712 mn at official exchange rates.The FRA has approved BINV’s MTO to acquire up to 90% of OFH via a share swap (1 BINV share: 56.76 OFH shares). The timeline of the MTO is to be made public before the end of this week.Egypt’s financial inclusion rate, the percentage of citizens above the age of 16 who hold bank accounts, mobile wallets, or prepaid cards, jumped to 71% by the end of 2023 from 65% at the end of 2022.  Financial inclusion grew 174% between 2016 and 2023.ESRS (FV: EGP97.02, OW) reduced its local rebar price by EGP7k/ton to EGP46.6k/ton, inclusive of 14% VAT, as of today down from EGP53.5k/ton a week ago. SUGR (FV: EGP98.0, OW) reported 4Q23 results showing: •             4Q23 net profit came in at EGP187 million (+62% YoY, -41% QoQ), backed by reversed provisions for the quarter with the amount of EGP100 million and other income of EGP279 million, helping to reverse the losses recorded on the gross profitability and EBITDA levels. FY23 net profit recorded EGP1,592 million (+87% YoY), slightly below our expectations of EGP1,708 million.•             SUGR is currently trading at a FY24 P/E of 5.3x."Beyti" for food industries is looking to increase its exports by 57% this year to reach USD55 mn.EAST is looking to expand its exports destinations to Saudi Arabia, Emirates, and other African countries, as well as increasing their production capacity 20% in 2025.Samih Sawiris invested USD100.0 million in ORHD's (FV: EGP20.38, OW) El Gouna for the establishment of a new hotel and expansion of existing hotels.AMER reported FY23 net profit of EGP45.9 million, compared to FY22 net loss of EGP101.9 million.CCAP the owner of 64.28% (directly and indirectly) of National Development and Trade, NDT, (Qalaa’s subsidiary operating in the Cement and related activities fields) announced that NDT has signed settlement agreements with three of its banks in full settlement of debts and agreed with a fourth bank to settle its debt over two years, which will have a positive impact on the company’s financial statements.The Supreme Council of Energy has approved the national strategy for green hydrogen. It aims to transform Egypt into a regional hub for green hydrogen production by 2026 and a global hub by 2030.Car manufacturers have been contacted by the local banks to reopen LCs for their manufacturing inputs, for the first time since last June
Pre-Trading Thoughts
4d ago
Pre-Trading Thoughts
The government will soon launch an international tender for the management and operation of all the airports in the country, Civil Aviation Minister said.The House gave final approval to an amendment to the 2018 Consumer Protection Law that will see those hoarding key food commodities facing sentences of one year in prison and fines between EGP150k-3 million. "There are no negotiations regarding a project to develop the Ras Ghamila area in Sharm El Sheikh,” Public Enterprises Ministry spokesman said. The deadline granted to companies to benefit from investment incentives has been extended until 2029, in addition to allowing all new investment projects or their expansions to enjoy tax incentives on machinery and equipment. The CBE directed all banks to prepare a comprehensive assessment of the value of shipments accumulated at the ports which are financed by the “collection documents” mechanism only, provided that the value of these shipments is already in customers’ accounts in EGP. The CBE also requested a detailed report on all pending FX sourcing requests, whether they have been shipped or not yet, for all sectors and all financing mechanisms.The General Authority for the Suez Canal Economic Zone is preparing for a global launch of the first phase of a water desalination plant with a production capacity of about 250 thousand cubic meters per day.Egypt's share of the global tourism increased over the past year to 1.2%, compared to its share in 2019, which represented 0.9%.The EGX plans to launch its shariah-compliant index in March.MASR (FV: EGP5.24, OW) achieved stellar 4Q23 sales of EGP15.0 billion, up 334.5% y/y and 57.4% q/q, bringing FY23 sales to EGP29.9 billion, up 194.3% y/y. Net profit in 4Q23 grew 283.3% y/y and 0.5% q/q to EGP775.9 million, bringing FY23 net profit up 188.8% y/y to EGP2.1 billion. The Board proposed the distribution of EGP0.20/share cash dividends, in line with our expectations, implying a DY of 4.0%.MASR (FV: EGP5.24, OW) is considering expanding to North Africa and the Gulf and aims to launch in Saudi Arabia in 1H24. EAST's CEO declared that the company's FX monthly needs range between USD40-50 million. Therefore, the general assembly will gather within the next few days to approve the decision to get USD400 million USD loans as LCs which will be repaid in EGP by the facilitation of the new Emirati partner.ETEL and Huawei have announced a strategic partnership for the deployment of 5G networks.Aman For Financial Services, a subsidiary of RAYA, will start providing installment services in Saudi Arabia in the second half of the year. Aman has already inked an agreement with an unnamed Saudi partner and expects to receive the Saudi Central Bank’s approval next month.Qatar Islamic Bank and Kuwait Finance House (KFH) have completed their due diligence of United Bank, which is owned by the CBE, in preparation for one of them to acquire it based on price preference. CNFN will launch its UAE arm in 3Q24 to Egyptian expats there. Contact is also planning EGP1.5-2 billion worth of securitized bonds that will be issued in March.HRHO subsidiary and e-payment solutions provider PayTabs has teamed up with consumer finance firm Souhoola to add BNPL options for customers at payment checkouts.GBCO's NBFS arm GB Capital has launched GB Capital Sukuk after receiving its sukuk license from the FRA. AMOC shared an EGX disclosure saying that it has no knowledge of the media-reported planned stake sales by the National Bank of Egypt and Banque Misr.Egypt's renewable energy production increased by 8% YoY to 6.691 MW during 2023.The UAE’s largest fuel retailer Adnoc Distribution plans to ramp up its activity in Egypt and Saudi Arabia, the company said in a statement.
Pre-Trading Thoughts
5d ago
Pre-Trading Thoughts
The USD35 billion Emirati investment in Egypt is an important step, but it is not linked to the Fund’s discussions with Egypt. These two topics are completely separate, the IMF’s Middle East and Central Asia head said.Egypt needs to ramp up private sector activity, rationalize spending, and maintain restrictive monetary policy to help boost economic growth, the Organization for Economic Co-operation and Development (OECD) said.The OECD sees economic growth falling to 3.2% in the current fiscal year — from 3.8% in the last fiscal year — as inflation continues to drive down consumption. Growth is set to pick up to hit 4.4% in FY2024-25. There could be a decline in the prices of essential commodities before Ramadan, as the release of goods that had been stuck at customs brings down prices, Federation of Chambers of Commerce Secretary-General said.The House of Representatives gave the final approval yesterday to amendments that will raise the issuance fee of passports to EGP1k from EGP250. The House approved a EUR500 million grant from the European Investment Bank to support the Environment Ministry’s Sustainable Green Industry project, and an EUR80 million grant from Germany to fund the Environment Ministry's solid waste management program, help create 25 technological schools and centers, and support the Central Bank of Egypt’s financial risk management program.The Commodity Exchange has stopped offering and trading the three most prominent strategic commodities: wheat, corn, and sugar about two months ago. The Minister of Supply attributed the reason for the halt to speculation and exaggerated prices for the wheat commodity, which will be offered again when prices stabilize.EKHO released 4Q23 consolidated financial results. Net profit increased 25% YoY (+18% QoQ) to USD42.62 million in 4Q23. FY23 net profit declined 30% YoY to USD179.18 million. EKHO is currently trading at a 2024e PE of 5.1x and EV/EBITDA of 2.6x. According to local press press, the National Bank of Egypt and Banque Misr target selling part or all of their stake of 26% in AMOC.EXPA (FV: EGP42.00, OW) 4Q23 consolidated bottom line recorded a strong EGP1.1 billion post minority interest (+227% y/y, +7% q/q), bringing FY23 bottom line post minority to EGP3.375 billion (+156% y/y). We raise our FV from EGP32.00/share to EGP42.00/share and maintain our Overweight recommendation on strong financial performance exceeding our expectations. EXPA is currently trading at 1.1x P/B24 and 5.5x P/E24, on RoAE of 22%.ELSEWEDY ELECTRIC for Electrical Products (EEEP), a subsidiary of SWDY (FV: EGP34.96, OW), targets an increase in oil transformers' exports to USD150 million in 2024 up from USD120 million recorded in 2023.According to local press, Saudi Egyptian Industrial Investment (SEII) plans to invest USD5 million in a new pharma production line, which should kick off operations early next year.Weekly Commodities Update |   | Last Price | WoW Change, % | Brent, USD/bbl | 81.6 | -2.2% | Diesel-HSFO Spread, USD/ton | 405 | -5.5% | Egypt Urea, USD/ton | 406 | -1.0% | Polyethylene, USD/ton | 1,060 | 0.0% | Polypropylene, USD/ton | 960 | 0.5% | Steel/Iron Ore Spreads, USD/ton | 387 | 1.0% | LME Aluminum Cash Price, USD/ton | 2,138 | -2.8% | Egyptian Retail Cement, EGP/ton | 2,099 | -1.5% | Steam Coal FOB Newcastle Australia, USD/ton | 119 | 0.1% | SMP, USD/MT | 2,788 | 1.1% | Last price may vary week over week in some indices due to time difference
Pre-Trading Thoughts
6d ago
Pre-Trading Thoughts
Ras El-Hekma: Potential Addition to TMGH Valuation Is MassiveOn Friday, the Prime Minister announced a USD35.0 billion investment by ADQ to acquire the development rights for Ras El-Hekma on the North Coast in Egypt. ADQ’s press release mentions TMGH as one of the partners it will work with.In an attempt to preliminarily gauge how much potential value this project could add to our TMGH valuation. We assume TMGH to be brought onboard as a subdeveloper by ADQ to develop a land area of 23.3 million sqm (based on unconfirmed media reports).We multiply this 23.3 million sqm land area by EGP2,500/sqm  to reach a valuation of EGP58.2 billion, translating into EGP28.19/TMGH share.This, in addition to incorporating the seven Legacy hotels (adding around EGP3.12/TMGH share post minority) would take our total TMGH valuation from EGP42.95/share to a total preliminary valuation of around EGP82.95/share.We reiterate our Overweight recommendation of TMGH.Egypt’s government officially announced the Ras El-Hekma investment deal. The deal size is as big as USD35 billion, which will be divided into two installments:The first is in a week’s time, amounting to USD15 billion. This will be in the form of USD10 billion freshly injected, in addition to swapping USD5 billion for a part of the UAE deposits at the CBE.The second installment will be two months later, amounting to USD20 billion. Similarly, this will be divided into USD14 billion of fresh USD inflows and a deduction of another USD6 billion of UAE deposits.The USD has weakened on the parallel market to something in the EGP49.50 to EGP52.00 range.A government official said that the proceeds of the Ras El-Hekma deal will be addressing the import backlog and paying arrears owed to foreign partners as cabinet’s top priorities.The IMF staff and Egyptian officials continue to make excellent progress towards finalizing the long-stalled first and second reviews of Egypt’s loan program according to the Fund’s director of communication said. The Norwegian company SCATEC plans to establish a new wind power plant in Egypt in the Gabal El-Zeit region on an area of ​​22 square kilometers.The government will be pausing rolling blackouts during the holy month of Ramadan — expected to start 11 March — according to a cabinet decision.Minister of Finance announced the government’s intention to draft a new income tax law, which will be presented for a dialogue within weeks.National Dialogue sessions on the economic axis will kick off on Monday. The sessions will last for four days, with discussions on issues associated with the state’s budget, inflation, social justice, and investments.Kima released 2Q23/24 unaudited financial indicators. Net profit grew 22% YoY (-53% QoQ) to EGP163 million in 2Q23/24. Net profit declined by 15% YoY to EGP514 million in 1H23/24. Kima is currently trading at a 2023/2024f PE of 11.8x and EV/EBITDA of 6.7x.Egyptian Petrochemicals Holding Company (ECHEM) and Alexandria National Refining and Petrochemicals Company (ANRPC) are considering teaming up with an undisclosed local private-sector player to establish a USD380 million sustainable aviation fuel (SAF) project with an estimated production capacity of 120k tons a year.Energean will announce the results of exploratory drilling at its Orion X1 well in the next two to three weeks.TAQA, the Saudi Industrialization and Energy Services Company, is eyeing investment opportunities in Egypt’s offshore oil well services sector to drive its growth targets.
Pre-Trading Thoughts
22-02-2024
Pre-Trading Thoughts
UDC Real Estate Development has received a land plot in New Cairo’s Al Andalus to build a EGP60 bn mixed-use development. The project will span some 665k sqm and will feature residential, administrative, entertainment, commercial, and hospitality units.Budget expenditures in 1HFY2023-24 rose to EGP1.461 trillion, compared to EGP940.8 billion in the corresponding period of FY2022/23, mainly due to a significant increase in interest payments, which reached EGP792.99 billion, compared to EGP392.84 billion in the comparison period. Finance Ministry has approved a proposal to amend the tax brackets for SMEs to take inflation into account.The New Urban Communities Authority (NUCA) has awarded the local arm of the UK-based NHMC Group a plot of land in East Cairo’s Shorouk City to set up a USD300 mn medical and educational complex alongside a residential and commercial project. The Ministry of Finance intends to launch the seventh phase of the “immediate cash payment” initiative to support exporters before the end of 1Q2024.The tonnage passing through the Suez Canal declined by about 28% YoY after the Houthi attacks on the ships heading to Israel.A government official revealed that the Ministry of Public Business Sector intends to complete the preparation of two of its affiliated companies, to be listed on the Egyptian Stock Exchange or offered to strategic investors, before the end of next June.GB Corp (FV: EGP12.86, OW) announced yesterday that their subsidiary “International Group of Automotive Trading” is exploring the establishment of a trading and distributing passenger car company in Jordan, following the company’s strategy in expanding its geographical presence.According to local media Abu Ghaly Motors is looking to add 3 new brands to their vehicles’ portfolio.Local EV startup Shift EV is exploring opening a new factory in several stages that would eventually be able to convert 50k petrol-powered cars to EVs a year to keep up with increase in demand. A consortium of Petrojet and Elsewedy Electric and another between EKHO’s Natgas and Petrogas have made it to the Saudi Energy Ministry’s list of companies qualified to bid for dry gas and liquified petroleum gas (LPG) distribution licenses.IPR Energy Group has earmarked USD110 million for investments during the current year.The Oil Ministry has signed a memorandum of understanding with Al Nasr Petroleum Company (NPC) to assess the possibility of establishing a green hydrogen production unit in Suez.ATLC (FV: EGP 7.50, OW) 4Q23 net income recorded EGP26 million (+48% y/y, -69% q/q). 2023 net income recorded EGP171 million (+29% y/y). ATLC is currently trading at P/B24 of 1.3x and P/E24 of 5.7x, on an ROE of 29%. The National Bank of Egypt’s net income rose by just under 120% y-o-y to EGP50 bn in 9M2023.United Bank is eyeing 20-30% stakes in two unnamed tech companies and aims to acquire the stakes within the coming few months.Banque Misr aims to exit investments in 7 companies with proceeds of approximately EGP1.5 billion during the current year 2024.         ALCN declared cash dividends of EGP2.40/share, partially paid in USD at exchange rate of EGP30.85, and the remaining will be paid in EGP. This implies dividend yield of 3.8% and payout ratio of 81.5%. Record date is March 4, 2024 and distribution date is March 7, 2024.According to local media, ORHD (FV: EGP20.38, OW) signed a EGP200.0 million agreement with SolarizEgypt for the second phase of El Gouna's solar power plant.
Pre-Trading Thoughts
21-02-2024
Pre-Trading Thoughts
The EGX is preparing a proposal to allow individuals to trade T- bills in the secondary market soon, within the framework of the EGX management strategy for development.The government is considering a new increase in the procurement price of wheat ardeb for the current season by EGP400, to reach EGP2,000/ ardeb in conjunction with the rise in the price of wheat in the local market.Egypt's gas exports increased during Last December to 438 million cubic meters compared to 206 million cubic meters In November, according to data from the Energy Data Platform Joint “JODI”.ESRS (FV: EGP97.02, OW) raised its rebar price by EGP3,600/ton to EGP53,520/ton on increasing FX rate in parallel market. EGAL (FV: EGP77.75, OW) has signed a cooperation agreement with Norwegian company Scatec ASA to build a 1 gigawatt (GW) solar power plant in the Industrial Complex in Naga Hammadi. Under the agreement, the plant will be built over two phases. The first phase is planned to be built within 18 months of the date of the agreement, while the second phase is set to be completed within 24 months. Scatec will develop and fund the project, in addition to installing equipment and conducting relevant studies.The Oil Ministry aims to attract somewhere around USD7.5 billion in foreign direct investments from foreign partners in the Egyptian oil sector during the next fiscal year, compared to the USD6 billion in investments expected in the current fiscal year.Egypt’s anticipated agreement with the IMF will help settle debts that it currently owes to foreign oil firms.The oil minister confirmed unconfirmed reports from last year that the Middle East Oil Refining Company (Midor) will be the next company from the petroleum sector within the government’s privatization program.Egypt is likely to suspend exports of liquefied natural gas during the coming summer on the back of increased domestic demand as rising temperatures strain supplies, The ministry of Petroleum has extended the deadline for a current oil exploration tender from 25 February to 1 April and plans to launch a new gas exploration tender during the second half of 2024.Emirates National Oil Company subsidiary, Dragon Oil, plans to invest some USD500 million in Egypt this year to drill new wells and maintain oil production levels at 61k barrels per day (bpd). Dragon Oil wants to raise its production from the North Safa oil field in the Gulf of Suez to 8k bpd next year up from 6k bpd.Apache aims to secure new oil and gas concessions areas in 2024. Egypt is committed to paying its dues to the company over a 30-year period.Energean confirmed its intention to continue investing in Egypt’s oil sector despite the company’s accumulated receivables.ERP, the American energy company targets investing USD250 million in Egypt during the current and the coming year.According to local media, JUFO expect a 30-50% increase in demand on their products during Ramadan compared to any other month.Member of the Board of Directors of the Chamber of Pharmaceutical Industry and the Head of the Cosmetics Division of the Federation of Egyptian Industries stated that 70 pharmaceutical companies asked banks to source USD22 million advance payments for foreign suppliers, to be able to ship raw materials and supplies from countries of origin to Egypt.Beltone Holding has entered into a multidimensional collaboration agreement with Bank of Africa Group (BOA Group) that will help Beltone and its new partner in developing mutual growth and leveraging product cross-selling potential in the African market.EXPA signed an agreement with the European Bank for Reconstruction and Development to obtain a loan worth USD25 million, with the aim of financing small and medium export companies.
Pre-Trading Thoughts
20-02-2024
Pre-Trading Thoughts
Tourist arrivals in the first 40 days of this year were up 5% from the same period last year, Tourism Minister said. Egypt received a record 14.9 million tourists in 2023.Egypt's Trade deficit reached USD3.032 billion during December 2023. Egypt's trade deficit decreased during 2023 by about USD11.2 billion, recording about USD36.9 billion.BP is planning to inject at least USD1.5 billion in new investments for development and exploration activities, with the potential of an additional USD5 billion in investments over the coming years.The International Finance Corporation plans to invest some USD1 billion in Egypt this year, the same amount invested in the country last year.The International Islamic Trade Finance Corporation (ITFC) has inked its USD1.5 billion annual work program with Egypt. The funds, earmarked for EGPC and GASC, will support the state’s energy and commodities purchases.Saudi Egyptian Company for Medical Laboratories is set to invest some EGP400 million in the Egyptian market this year.Finance Minister unveiled fresh details on the proposed amendments to the Unified Budget Act, under which the budgets of all 59 of the state’s economic bodies and the state budget will be presented in a new consolidated budget. The move will happen gradually over a five-year period starting FY2024-25. Suez Canal revenues are down by 40-50%, El Sisi said.El Sisi calls for low-cost financing to drive Egypt’s green transition as previously pledged by major economies.The FRA approved the decision of the Egyptian Stock Exchange Board of Directors regarding redividing the stock market into four main markets, instead of two.EGAL reported 2Q23/24 full financial results with net income surging to EGP1.8 billion during the quarter (+69% YoY, +11% QoQ), bringing 1H23/24 bottom-line to EGP3.4 billion, which is double comparative period earnings of EGP1.7 billion. EGAL is currently trading at FY23/24e P/E of 8.2x. SAUD (FV: EGP25.00, OW) 4Q23 net profit recorded EGP617 million (+23% y/y, +5% q/q), bringing 2023 bottom-line to EGP2,224 million (+27% y/y). •We raise our FV from EGP17.00/share to EGP25.00/share and maintain our Overweight recommendation.•The stock is currently trading at P/E24 of 5.2x, with ROAE of 21%.ADIB (FV: EGP 70.00, OW) will increase its authorized capital to EGP10 billion, and its paid and issued capital to EGP6 billion, through 1:5 bonus shares, financed from 2023 net profit.EFG Corp-Solutions, the leasing and factoring arm of HRHO, plans to provide at least EGP10 billion in financing in 2024, up from the EGP8.5 billion provided last year.The Islamic Corporation for Private Sector Development, has signed a letter of intent with Banque Misr to provide a USD30 million line of credit to finance private sector and SME projects.Egypt is now aiming to have renewables make up 60% of its energy mix by 2030, according to an Oil Ministry statement, as compared to a previous target of 40%.The Israeli Energy Ministry has greenlit an agreement that will see Israel increase its gas exports to Egypt from Chevron’s offshore Tamar field starting July 2025. Israel will raise gas exports by an additional 4 billion cubic meters (bcm) annually for the next 11 years which is triple what is currently exported from the field.The Saudi Industrialization and Energy Services Company (TAQA) is planning to tap into Egypt’s offshore oilfield services sector in 2026. The company, will invest three or four times the amount it invested in 2023 during the current year.City Lab for Medical Analysis Company obtained the FRA approval to be registered, the FRA also approved trading the company’s shares that were temporarily registered on the stock exchange in the medium and small size companies market. The trading on the company’s stock will begin before th
Pre-Trading Thoughts
19-02-2024
Pre-Trading Thoughts
Minister of Planning announced that Egypt aims to reach a growth rate of 4.2% in FY2024-25, up from 3% for the current year.Egypt Post’s investment arm could invest as much as EGP6 billion throughout the year split between private equity investments and investments in EGX-listed companies.Importers are reportedly expecting banks' provision of foreign currency to complete the procedures for opening letters of credit, accelerating the pace of importing new shipments during the coming period. Sources said that the banks they deal with notified them of depositing the value in EGP and opening a letter of credit for it, with promises to provide USD, but did not specify the rate or time.The Sovereign Fund of Egypt is looking into launching three sub-funds for education, agriculture, and healthcare in a bid to bring in more investments into the local market.The Ministry of Electricity expects to attract foreign investments in the field of renewable energy amounting to more than USD2.5 billion during 2024 and 2025, specifically in solar and wind energy projects.The House’s Legislative and Constitutional Affairs Committee will convene today to discuss amendments to the 2018’s Consumer Protection Law, as the government looks to toughen penalties for withholding strategic food commodities from the market.The Institute of International Finance (IFF) forecasts Egypt's economic growth to slow to 2.8% in the event that the war on Gaza is contained and Red Sea shipping resumes in a couple of months. The Governor of the CBE said that about USD100 million will be provided to import oils and dairy, according to the requests of the Ministry of Supply.The Minister of Finance revealed that the Cabinet approved a draft law aimed at merging the budgets of 59 economic authorities with the state’s general budget.Shalatin Mineral Resources Company increased its gold deliveries to the CBE by 14% in 2023 to about 720 kilograms of gold, worth EGP1.3 billion.Public Enterprises Ministry will ink a contract with an Indian company within days to build a solar power plant to supply EGAL with energy in a bid to ramp up the company’s exports to markets seeking products made with a lower carbon footprint. A new USD3 billion aluminum factory is in the pipeline in partnership with Emirates Global Aluminum to be located somewhere in northern Egypt with an estimated production capacity of 600k tons.MOPCO release 4Q23 audited standalone results. Net profit increased 356% YoY to EGP824.3 million in 4Q23. Net profit grew 55.8% YoY in 2023 to EGP5.97 billion. KIMA is selling four unused land plots in Aswan with a total area of 52,564 sqm. The sale will be through a public auction on 3 March 2024 using closed envelopes. EKHO has taken an interest in and is open to investing in stakes in companies being offered up by the state asset sale program.According to the Minister of Petroleum, Middle East Oil Refinery’s (MIDOR) refinery expansions are planned to start full operations next March with investments worth USD2.7 billion.  Chevron’s Tamar gas field in Israel, which also supplies gas to Egypt and Jordan, will increase daily production to 1.6 billion cubic feet per day, from a current 1 billion cubic feet per day.QNBA's BoD decided to amend the proposed cash dividend distribution to EGP1.00/share from EGP1.50/share, implying a payout ratio of 13% and DY of 2.6%.ALCN announced cash dividends of EGP2.40/share, partially paid in USD, and the remaining will be paid in EGP. The EGP coupon amounts to EGP1.94/share.EGTS’s court date for the 20.0 million sqm third phase Sahl Hasheesh land plot lawsuit is postponed to 27 April 2024.ZMID reported FY23 net profit of EGP324.2 million, up 24.2% y/y.  Weekly Commodities Update
Pre-Trading Thoughts
18-02-2024
Pre-Trading Thoughts
Egypt's unemployment rate hit 6.9% in 4Q2023, down from 7.1% in the 3Q2023 and 7.2% in the corresponding quarter of 2022.Outstanding balance of foreign investors in Egyptian T-bills increased by about USD400 million in November to USD12.6 billion compared to USD12.2 billion in October.Arab countries' debt to Egypt rose to USD48.4 billion at the end of last September, compared to USD46.2 billion at the end of last June. Egypt has repaid about USD8.2 billion of debt during 1Q2023-24. The per capita share of external debt rose to USD1,444.5 in September 2023, compared to USD1,360.7 in September 2022.Egypt and Brazil inked a protocol aimed at facilitating Brazilian beef, pork, and poultry exports to Egypt by aligning the two countries’ meat inspection systems. The Finance Ministry is looking into a package of tax and custom breaks aimed at attracting investors to the new capital’s Central Business District.Minister of Trade and Industry said that the Ministry intends to launch a new strategy for the industrial sector in Egypt at the end of this month. EAIC will likely kick off operations this year and will initially target investments in the agriculture and trade, before expanding into renewable energy and green hydrogen, Emigration Minister said.EAST announced on Friday an increase in the prices of all its products. The increase was implemented as of yesterday, Saturday, a step that the company attributed to an increase in raw material costs. Adnoc has reportedly withdrawn its bid for a stake in Wataniya, meanwhile Taqa Arabia is the only firm to have publicly declared interest in the bidding. AMOC released 2Q23/24 financial results. Net profit declined by 18% YoY and increased by 18% QoQ to stand at EGP488 million. In 1H23/24, net income dropped 9% YoY to EGP900 million. AMOC is currently trading at a FY23/24e PE of 5.8x and EV/EBITDA of 3.2x.Oil prices rose on Friday triggered by escalating tension in the Middle East and a hotter-than-expected US inflation report. Brent crude was up almost 1% to USD83.53/bbl.EGPC issued a tender to import 593k tons of petroleum products to be received in March 2024. Egypt is importing 500k tons of diesel and 93k tons of gasoline.According to local media, EDA informed representatives of pharmaceutical companies through the Chamber of Pharmaceutical Industry in the Federation of Industries and the Pharmaceutical Division in the Federation of Chambers of Commerce that studying requests to increase drug prices is subject to the CBE’s decision to float the Egyptian pound completely or partially.Vodafone Egypt has received approval from the CBE to raise its stake in Basata Holding for Financial Investments’ subsidiaries Bee and Masary to 20% up from 10%.DSCW obtained the approval of QNB Al Ahli for a medium-term loan worth USD5 million for a period of 6 years as well as the approval of CIB to grant it a loan worth EGP100 million for a period of 3 years.SAUD announced studying a plan to start a non-banking financial services subsidiary.Banque Misr has launched a new platform called Banque Misr Express to provide Egyptian SMEs with financial and non-financial support.