Pre-Trading Thoughts

Al Ahly Pharos

Inflation for May| We expect annual urban inflation to come in at 12.8% in May, as increases in the food items slowed down significantly during the month.

Egypt's PMI hit 47.0 in May, up slightly from 46.9 in April, but still below the neutral point of 50.

The International Islamic Trade Finance Corporation (ITFC) has raised the ceiling for its financing agreement with Egypt to USD6 billion from USD3 billion to help us meet our food and energy needs.

Under a food security program pending approval by the World Bank board, Egypt would receive USD380 million to help import up to 700,000 tons of wheat.

Egypt is in talks to export fertilizer and other products to India in exchange for the 500,000 tons of Indian wheat.

The cost of increasing interest rates on the debt service in the budget is estimated at about EGP8 billion until June 30, with total cost reaching EGP60 billion over the next fiscal year.

The government is considering providing tax incentives ranging between 30% and 50% for private sector investments in new cities and industrial areas in Upper Egypt.

Renewable energy player Infinity and Emirati firm Masdar are close to acquiring Actis’ 60% stake in Lekela Power in a transaction that could be worth almost USD 1 bn.

Al Futtaim Group could invest another USD 1 bn here through 2025 and is looking to bring more of its foreign partners to invest in Egypt, the group’s CEO says.

A consortium of an undisclosed bank and Emirati investment funds intend to submit an offer to acquire the United Bank, which the CBE wholly owns.

Saudi Public Investment Fund is planning to acquire the United Bank and is also studying several investment opportunities (local bank in which a Gulf entity holds a stake; TMT, fertilizers, and electronic devices).

CICH denied news of FAB's acquisition of Banque Misr's stake in the company's capital.

ETEL and Etisalat Misr signed a number of agreements with a total value of EGP17 billion including EGP15 billion in infrastructure revenue for ETEL. Value of the agreement is included in the company’s communicated guidance (early double-digit revenue growth).

Phillip Morris paid USD450 mn to obtain the new cigarettes and e-cigarettes manufacturing license after being the only bidder. The license states that if any other tobacco player acquired 10% or more of EAST, PMI has the right to buy EAST's share of 24% in UTC at par value along with USD108 mn, which equates to 24% of the license cost.

The rehabilitation of EGAL’s facilities is estimated to cost around USD300 million, which will be financed through a capital increase to a strategic investor and debt financing.

Orascom Construction, Hassan Allam Construction, and Elsewedy Electric subsidy postponed activating some infrastructure projects for the Libyan government worth EUR3 billion.

EMFD is negotiating to develop a 4.2 million sqm land plot in East Cairo through land acquisition or co-development.

DSCW 1Q22 net profit recorded EGP9.6 mn, compared to EGP3 mn in 1Q22. The annual rise came backed by export rebates of EGP9.6 mn during 1Q22.

The Ready-made Garments Export Council called on the government to provide a package of incentives to encourage import substitution within that industry.

Mobile phone sales recorded a decline of 14.9 % YoY during 4M2022 to stand at 4.74 million device, with April mobile phone sales dropping by 24.3% YoY to stand at around 1.03 million device.

ACDIMA is close to concluding the sale of its stake in UPE Pharma to PHAR in a transaction worth EGP700-800 million (EGP7.56/PHAR share).