Pre-Trading Thoughts

Al Ahly Pharos

The government is allocating EGP596 billion for subsidies and social support in the next fiscal year. And expects to record a budget deficit of 6% and a primary surplus of 3.5%.

The Saudi government approved a MoU between its Finance Ministry and Egyptian counterparts to establish a high-level financial dialogue.

According to the Minister of Finance, foreign cash inflows are expected to exceed USD20 billion, after the agreement with the IMF.

According to the Minister of International Cooperation, Egypt is expected to receive USD1 billion from the world bank by June 2024.

The IFC’s financing portfolio in Egypt is expected to reach USD1 billion during the current fiscal year, from USD850 million a year before.

Ras Al Hekma city will include a free zone to facilitate the establishment of investment and financial projects.

Exports from Israel’s Leviathan gas field to Egypt were up 28% last year, jumping to 6.3 bcm from 4.9 bcm in 2022.

The Cabinet approved a draft decision regulating the temporary exit of equipment and machinery from the country’s freezones.

The Parliament yesterday gave final approval to four USAID grant agreements targeting the private sector, education, healthcare, and sanitation.

The Parliament greenlit three draft laws licensing the Oil Ministry to provide firms with oil exploration contracts. The three contracts will see the Egyptian General Petroleum Corporation work with a number of local oil companies and Croatian national producer INA to explore for oil in the West Delta, Western Desert, and in the Gulf of Suez.

The government’s 6-year aviation strategy targets raising tourism revenues by 20% annually to USD45 billion by 2030, up from the USD13.6 billion recorded by the central bank in the previous fiscal year.

RMDA released 4Q23 full financials:

• Attributable net income recorded EGP52.6 million in 4Q23 (+3.6% YoY, -31.0% QoQ). This brings FY2023 attributable net profit to EGP244.6 million (-0.4% YoY).
• RMDA BoD proposed dividends distribution of EGP100 million (EGP0.065/share) from 2023 earnings, implying a dividends payout ratio of 40% and a dividend yield of 2.5%, to be distributed on three tranches throughout 2024.
• RMDA is currently trading at FY23 P/E of 16.5x.

DSCW (FV: EGP1.11, EW) released FY23 Financials:

• FY23 attributable net profit recorded EGP448 mn compared to EGP162 mn in FY22. The rise came backed by trickling down of healthy gross profitability.
• Revenues for the year came in at EGP3.4 bn (+60.9% YoY), backed by the rise in FX rates which boosted exports segment revenues, coupled with higher Average Selling Price in the local segments.
• DSCW BoD proposed dividends of EGP0.17/share with a payout ratio of 67% and a Dividend Yield of 12%.
• DSCW is currently trading at a FY24 P/E of 5.

The Customs Authority released 70% of steel products and raw materials stuck at different ports which may accelerate price reductions in the local market during the coming period.

According to local media, the Holding Company for Construction and Development intends to keep its 14.94% stake in MASR (FV: EGP5.24, OW).
SUGR announced the start of receiving sugar beet crops from farmers for 2024 season. It targets to receive around 2.2 million tons of sugar beets over the course of the season, to produce approximately 300 thousand tons of local white sugar in addition to refining 25 thousand tons of raw sugar.