Pre-Trading Thoughts

Al Ahly Pharos

Finance Minister Ahmed Kouchouk held a presser. Among his remarks:

• The government rationalized public spending by 2.2% of GDP, brought down the budget deficit to 3.6%, and achieved a primary surplus of 6.1% during the last fiscal year.
• The government wants to reduce debt servicing to 35% of total government spending over the medium term.
• Tax revenues grew by 30% y-o-y in FY 2023-24 to record EGP1.49 tn, which helped push revenues up 60%, outpacing spending growth.
• Government spending on subsidies and social protection more than doubled from FY 2020-21 to EGP550 bn — the government had penciled in EGP530 bn in social safety spending in its draft budget.
• The government is looking to raise around USD2-2.5 bn through the privatization of state-owned companies this fiscal year.

Net foreign reserves edged up by USD105 mn in July to just under USD46.5 bn, surpassing the previous record high USD46.4 bn recorded in June.

State grain buyer GASC yesterday launched a tender for up to 3.8 mn tons of wheat for import over a seven-month period, marking its largest tender to date, according to what traders told Reuters.

The Oil Ministry’s industrial mining complex in Aswan is expected to see EGP700 mn in investments over two phases.

Global markets are catching their breath after stocks staged somewhat of a comeback yesterday, recovering some of the losses from the past three days as investors eased recession concern. The Dow gained 0.76%, while the S&P 500 rose 1.04%, and the Nasdaq Composite closed up 1.03%.

ECAP (FV: EGP30.82, OW) released its KPIs for 2Q24, recording a surge in net profit to EGP86.5 million (+43% YoY, +6 folds QoQ) on the back of revenue growth and enhanced margins, bringing 1H24 earnings to EGP100.3 million (-15% YoY). ECAP is currently trading at FY24e P/E of 12.5x and EV/EBITDA of 4.8x.

Egypt’s aluminum exports surged 10% YoY to USD415 million in 1H24.

According to local media, EMFD is extending operations in Marassi for an additional two months beyond the summer season and has reduced hotel prices in Marassi to attract more tourists.

Real estate company, Arabia Holding, is looking into listing on the EGX.

BTFH has received the greenlight from the FRA to launch its SME finance service.

Local media sources highlighted that an investment consortium of SPE direct investment company and the European Bank for Reconstruction and Development(EBRD), in addition to other investment funds are planning to acquire Tamweeli micro-finance.