Al Ahly Pharos

The Federal Reserve hiked interest rates by 25 bps yesterday stating that the committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge.    The Electricity Ministry expects the ongoing rolling blackouts to continue until the middle of August as pressure on the country’s power generation infrastructure continues amid the summer heat.    A number of banks are...

Market Overview  ADIB JUFO MFPC prepared by: Mayada Amin - CETA - CFTe

The IMF forecasts Egypt’s real GDP to slow to 3.7% in 2023, from 6.6% in 2022, but to recover to 4.1% in 2024, in light of the current FX crunch. The fund is now projecting inflation in Egypt to average 24.4% in 2023 and to rise further to 32% in 2024.    The National Bank of Egypt and Banque Misr will today launch two new USD certificates of deposit, one with a 9% annual percentage rate that pays...

Market Overview  prepared by: Mayada Amin - CETA, CFTe

[Correction] The US Federal Reserve is expected this week to take the last step in its tightening cycle by raising interest rates by another 25 bps.   The cabinet denied media reports that have claimed that the production at the Zohr gas field has declined due to technical problems.  EGP-denominated bonds’ value rose on the Luxembourg Stock Exchange. The cost of insuring Egypt's 5-year sovere...

Market Overview  prepared by: Mayada Amin- CETA, CFTe

COMI (FV: EGP 68.54, OW)  2Q23 net profit post minority recorded a robust EGP7.99 billion (+32% q/q, +127% y/y), bringing 1H23 profit for equity holders to EGP 14.1 bn (+81% y/y). Robust sequential performance came on the back of 1) strong margins, 2) lower OPEX, 3) lower booked provisions, and 4) lower effective tax rate. The stock is trading at P/E 2023 of 6.1x and P/B 2023 of 1.9x. The Federal...

Market Overview  COMI ETEL ORAS JUFO Prepared by:Mayada Amin- CETA, CFTe

All tourism projects will be eligible for the golden license and will receive the necessary approvals to start operations within 20-days of applying.   The Sovereign Fund of Egypt has reportedly received three offers to buy stakes in military-owned fuel retailer Wataniya, from the Abu Dhabi National Oil Company (ADNOC), the Emirates National Oil Company (ENOC), and Saudi firm Petromin.   Several G...

Market Overview  CCAP FWRY  TMGH PHDC MNHD ISPH ORAS RMDA prepared by: Mayada Amin - CETA, CFTe

Market Overview  Prepared by: Mayada Amin- CETA, CFTe

Russia yesterday said it would withdraw from the grain export pact with Ukraine in a move that threatens to spark renewed volatility in global food prices. On the short-term, this will not have a significant impact on Egypt's wheat imports, since Egypt collected about 3.8 million tons of local wheat during the last season, which is enough for 6 months. Saudi renewable energy firm ACWA Power y...

The IMF has welcomed the government’s progress in selling down state assets in the privatization program, which will support the gradual withdrawal of the state from economic activity and provide resources for external debt reduction. The Sovereign Fund of Egypt received 3 offers from strategic investors to acquire Wataneya from Abu Dhabi National Oil Company (ADNOC) and the ENOC Oil Group, Saudi...

Market Overview 

The USD has dropped almost 13% against a basket of currencies on the back of easing US inflation, which is increasing investor appetite for higher-yielding risk assets around the globe. (Reuters) The cost of insuring Egypt's sovereign debt (CDS rates) declined, since the government announced the progress in the privatization program, to record 12.9% for the 5-year contracts, compared to 14.8%...

Market Overview  Prepared by: Mohamed Othman- CETA, CFTe

The EBRD will provide USD532 million in soft financing to the National Bank of Egypt, Banque Misr, and impact investor Mediterrania Capital Partners, the International Cooperation Ministry said. The Parliament approved a bill that will scrap tax exemptions previously enjoyed by public-sector companies and state entities.  The government will wrap up the disbursement of EGP7.5 billion to 750 export...

Market Overview  DSCW KABO  Prepared by: Mayada Amin - CETA, CFTe

The government has signed agreements worth USD 1.9 bn to sell state-owned assets under its privatization program. The state has raised USD 1.65 bn through the stake sales and received the remainder in EGP.  ADQ acquired 25-30% stakes in Egyptian Ethylene and Derivatives Company (Ethydco), Egyptian Linear Alkyl Benzene (Elab), and Egyptian Drilling Company (EDC) for USD 800 mn.  TMGH’s subsidiary I...

Market Overview  COMI HELI EKHOA ABUK prepared by: Mayada Amin - CETA, CFTe

Madbouly is expected to hold a press conference today to announce the completion of a number of asset sales as part of the state privatization program. Actis reached a preliminary agreement with the Sovereign Fund of Egypt to acquire the wind power plant in Jabal El-Zeit, which is included in the government’s public offering program, as per local media. A Gulf institution is considering pumping in...

Market Overview  COMI ADIB CCAP FWRY SWDY Prepared by: Mayada Amin - CETA, CFTe

Pitch| ETEL’s Relative Valuation and Vodafone Stake Sale Show Massive Upside Potential. ETEL is significantly undervalued compared to emerging peers. The relative value ranges from EGP48.05-81.93 per share. DCF FV is EGP 34. A significant improvement in financial performance on reaping infrastructure spending fruits along with Improved cash flows, higher margins, and lower CAPEX. Key Triggers: Upw...

Market Overview  Prepared by: Mayada Amin - CETA, CFTe

Egypt’s Foreign Reserves inched up to USD34.81 billion in June, adding USD130 million MoM. Unofficial foreign currency reserves increased by USD708 million, reaching the highest level since February 2022 at USD9.58 billion.   Egypt’s oil and gas exports fell more than 50% y-o-y in the first four months of 2023 to USD3.17 billion in January-April 2023. Natural gas prices have plunged and local prod...