Pre-Trading Thoughts

Al Ahly Pharos

Annual core inflation rate, which excludes volatile items, recorded 13.3% in May 2022, up from 11.9% in April. CBE might opt for tightening by another 200 bps, for real interest rates.

Egypt has paid due debts with a total value of USD24 billion YTD, including USD10 billion in foreign debt, and USD14 billion in foreign portfolio outflows.

Russian payment system “MIR” will be activated in a few days within Egyptian Resorts, which will raise number of Russian visitors to Egypt.

Ethiopia is interested in returning to the negotiating table with Egypt and Sudan on Grand Ethiopian Renaissance Dam.

A UAE company intends to acquire a 95% stake in Delta Pharma at a value of EGP1.0 billion; Transaction-implied multiples should be at 2022f P/E of 9.6x, EV/EBITDA of 5.8x, and P/S of 1.3x. With the exception of MCRO and RMDA, this is higher than local pharma market players' average multiples.

Response Plus plans to expand in Egypt and therefore contacted CLHO for cooperation on the operational/service level. (Not acquisition-related)

EFIH will help digitalize Libyan government finances under an MoU signed with the country’s Finance Ministry.

ESRS secured approvals from local banks to finance EGP2.2 billion out of the furnace's total cost estimated at EGP3.2 billion.

Savola has signed an agreement to acquire 100% of the Egyptian Belgian Company (Ole) for EGP622.4 mn. Savola plans to pour EGP 740 mn into the factory and achieve sales of around EGP 2 bn annually.

The Supreme Council of Private Universities has decided to terminate the centralized enrollment system that students were required to use to apply to private universities during the academic year 2020/2021.

FRA has approved a program that would see CIRA issue EGP 2 bn of future flow securitized bonds over three years. The first tranche will be worth EGP 800 mn.

Japanese Sumitomo will set up an industrial complex to produce pigtail cables used in cars and cable harnesses worth USD100-150 mn.

PHDC’s Board has now approved relinquishing the remaining Botanica land (amounting to around 2.0 million sqm) worth around EGP2.8 billion to NUCA in exchange for reducing PHDC’s liabilities to NUCA in PHDC’s other projects. Should have minimal impact on valuation.

Egyptian banks' risk departments have been looking into the credit limits for real estate developers, due to the recent hike in commodity prices.