Pre-Trading Thoughts

Al Ahly Pharos

Minister Moustafa Madbouly delivered his new government’s policy statement to the House of Representatives yesterday and delivered a speech to take MPs through the new government’s agenda over the next three years. Main points included (1) an average of 5% growth throughout the entire three-year period, (2) Private investment should make up 60-65% of total investment by 2030, (3) increasing FDI coming into the country by 14% every year, (4) Increasing the contribution of the industrial, agricultural, communications, and information technology sectors to account for 38% of GDP by the fiscal year ending in 2027, (5) increasing public revenues by 16% every year until the fiscal year ending in 2027.

The CBE has released the Balance of Payment (BoP)'s performance report for 9M2023/24. Key points are: The overall BoP recorded a surplus of USD4.1 bn during 9M FY 2023-24, a significant increase from the USD 281.9 mn surplus recorded in the same period in the last fiscal year.

• Egypt's current account deficit has widened by 225% y-o-y to USD17.1 bn in the first nine months of FY 2023-24, up from USD5.3 bn in the same period in the last fiscal year.

1. The oil trade balance recorded a USD5.1 bn deficit, compared to a USD1.7 bn surplus in the same period a year ago.
2. The non-oil trade deficit improved by USD1.5 bn to USD23.7 bn.
3. Suez Canal transit receipts fell 7.4% y-o-y to USD5.8 bn, with a sharp 57.2% y-o-y drop in the third quarter of the fiscal year after Houthi attacks on vessels passing the waterway started to pick up.
4. Remittances from Egyptians abroad decreased by 17.1% y-o-y to USD14.5 bn during the nine-month period, especially that the EGP flotation didn't take place until early March.
5. Tourism revenues increased by 5.3% y-o-y to USD10.9 bn, up from USD10.3 bn.

• As for the Financial Account:

1. Net FDI inflows tripled y-o-y to USD23.7 bn, up from USD7.9 bn in the same period a year prior. The lion’s share of the inflows came in the third quarter of the fiscal year, where Ras El Hekma agreement was made.
2. Net portfolio inflows recorded USD14.6 bn in portfolio investments in 9M FY 2024-25, compared to a net outflow of USD3.4 bn in the previous year.

Remittances from Egyptians working abroad increased in May to about USD2.7 billion, a growth of 74% y-o-y.

The International Bank for Reconstruction and Development allocated a soft loan of USD144 million to contribute to the development, modernization and duplication of the “Bashteel - Al Ittihad - Itay El Baroud - Al Nahda” railway line.

The Ministries of Industry and Transport are preparing to launch a global promotional campaign to exploit an area of 5 square kilometers of land and logistics areas behind the docks of Sokhna Port, to build a group strategic factories.
QNBE recorded, a lower, but still strong 2Q24 net profit post-minority interest of EGP6,699 million (-5% q/q, +70% y/y) broadly in line with expectations, bringing 1H24 net profit to EGP13,742 million (+59% y/y). We remind you that QNBE is among our tier II top picks for 2024. The stock is currently trading at 2024 P/E of 2.9x.

Banque du Caire has filed a request with the EGX to raise its authorized capital to EGP50 bn from EGP20 bn. The bank also wants to increase its issued and paid-up capital to EGP19 bn from EGP10 bn.

The subscription period of ACTF (Act Financial) for retail investors is set to take place between 9-23 July, while institutional investors between 9-18 July.

SWDY shareholders have put sell orders of a total of 427.7 million shares — around 20% of the company — to Electra Investment Holding in response to the latter’s offer, whose validity ended yesterday. The voluntary offer submitted by Electra in May targeted a 15-24.5% stake in SWDY, which is over 76% collectively owned by the Elsewedy family.