Al Ahly Pharos

Market Overview  TMGH FWRY  JUFO prepared by: Mayada Amin- CETA, CFTe

Egyptian Banks Report Extraordinary 1Q24 Results Amid Surging Interest Rates; Upside Potential Is Hard to Ignore  As highlighted before, post the recent 600 bps increase in policy rates and the EGP devaluation, we expect another year of exceptional profits with impact starting to appear in 1Q24, spearheaded by COMI and ADIB, supported by: 1)Strong Interest income, driven by: •Stronger NIMs. •Balan...

Market Overview  Prepared by: Mayada Amin- CETA, CFTe

CCAP: What Does One Year Forward Look Like?  In light of the potential debt settlement deals and restructuring plans of CCAP , we ran an exercise to examine the impact on the FV of the stock if the announced plans succeed. According to our assumptions and calculations, CCAP’s debt will go down to EGP9,376.5 million (EGP2.35/share) by the end of 2024, while the number of shares will increase to 3,9...

Market Overview  Prepared by: Mayada Amin- CETA, CFTe

Egypt's foreign debt climbed by USD3.5 billion in the three months ending December 2023 to reach USD168 billion.  Monthly headline urban CPI inflation recorded 1.1% in April 2024 compared to 1.7% in the same month of the previous year and to 1.0% in March 2024. Accordingly, the annual headline inflation rate recorded 32.5% in April 2024, compared to 33.3% in March 2024. CBE data revealed a de...

Market Overview 

Global index provider MSCI has decided to remove all special treatment measures on Egyptian securities listed in its indices in the May 2024 index review.  Progress made on foreign currency liquidity and the ability of foreign investors in the country to transfer funds abroad were reportedly the reasons behind MSCI’s decision. MSCI also has some other changes for EGX-listed companies in the pipeli...

Market Overview  Prepared by Mayada Amin - CETA, CFTe

CAPMAS is expected to publish inflation readings for April on Thursday, 9 May. We expect annual urban inflation to record c.32%, lower than 33.34% in March, mainly on a relative calm in some food items. Net foreign reserves increased by USD696 million from the month before to USD41.1 billion at the end of April, reaching their highest level in more than four years. The EGX’s long-awaited sharia-co...

Market Overview 

Global ratings agency Fitch revised Egypt's outlook to positive from stable.  Tourist arrivals to Egypt increased 27% YoY in the first four months of the year. Foreign holdings of local debt have more than doubled to USD35.3 billion as of March from USD16.6 billion at the end of 2023. Total orders issued under the government’s car-for-FX initiative have reached just under USD2 billion, accord...

Market Overview  ABUK  ALCN COMI ORHD ESES MENA DOMT BTFH SWDY ORWE EGTS Prepared by: Mayada Amin - CETA, CFTe

The government plans to start collecting taxes on capital gains incurred from trading EGX-listed financial securities starting March-April 2025, according to a cabinet statement. Kuwait’s Alghanim International is reportedly looking to inject USD300 million worth of investments in the Berenice maritime port.  China’s state-owned Xinxing Ductile Iron Pipes Company is planning to follow up its under...

Market Overview  ADIB BTFH SWDY ETEL FWRY EFIH Prepared by: Mayada Amin- CFTe, CETA

Banks' net foreign assets position improved significantly by c.78% from a net liability position of USD13.2 billion in February to a net liability position of USD2.8 billion in March. Finance Minister now expects the country’s primary surplus to come in at 5.75% by the end of the current fiscal year. China’s state-owned Xinxing Ductile Iron Pipes Company has begun construction on a USD146 mil...

Market Overview  Prepared by: Mayada Amin- CETA, CFTe

The CBE will start handing out letters of credit (LCs) to importers of non-essential goods at the start of June. The government has cleared USD20 billion worth of goods across the country’s ports since the beginning of 2024, a source at the Customs said. Prime Minister stated during the World Economic Forum meeting in Riyadh that it costs Egypt USD10 billion annually to host 9 million refugees. Ja...

Market Overview COMI ADIB CCAP SWDY ORWE ALCN CLHO prepared by: Mayada Amin- CETA, CFTe

The Central Bank of Egypt is auctioning off USD980 million worth of one-year t-bills. The government is reportedly looking to issue new legislation and incentives to make units offered in the New Administrative Capital’s central business district more attractive to foreign investors. The government will soon announce the new licensing requirements for private sector-run freezones. Expats have tran...

Market Overview 

We published this morning our earnings expectations sheet for companies under coverage in 1Q24/FY2. For 1Q24, aggregated net profit will increase 40% YoY and 27% QoQ For FY24, aggregated net profit will increase 38% YoY Stocks trading at P/E 2024 less than 5x: ESRS, POUL, CANA, HDBK, and ADIB (sorted from lowest P/E). The government said it will develop a payment strategy to reduce arrears owed to...

Market Overview  Prepared by: Mayada Amin - CETA, CFTe

*Key news articles for today* The Ministry of Finance reduced the allocations for the export burden rebate program in FY2024/25 budget to EGP23 billion, compared to EGP28 billion in the budget of the current fiscal year. The Chairman of the Export Council for Chemical Industries, said that this reduction will be offset by an acceleration in refunding companies’ export burdens, instead of the curre...

Market Overview  Prepared by: Mayada Amin - CETA, CFTe