Pre-Trading Thoughts

Al Ahly Pharos

The MPC will meet on Thursday, 5 September, to decide on key interest rates. We expect the CBE to keep the current rates on hold in its upcoming meeting on 5 September, with a potential rate cut in 4Q24, or - more conservatively - in 1Q25.

Net foreign asset surplus expanded 3.5% to USD13.3 billion in July, up from USD12.9 billion in June.

The government has purchased a “large volume” of fresh oil hedging contracts, Prime Minister Madbouly said.

The government has stocked up on strategic reserves of essential commodities, and Egypt currently has a six-month supply of strategic reserves, according to Prime Minister Madbouly.

The government is looking into introducing a number of incentives for tourism developers over the coming couple of years.

Madbouly said that he hopes to see the initial phases of the implementation of cash-based subsidies at some point during the next fiscal year.

The government has paid some EGP10 billion in overdue payments to pharma and medical supplies manufacturers over the last two months.

An energy corridor connecting Egypt and Cyprus that would carry natural gas and renewable energy was discussed by Oil Minister and his Cypriot counterpart.

The Trade and Industry Ministry launched a new online platform showcasing industrial investment offerings in partnership with EFIH.

Chairman of GAFI said that Egypt aims to increase FDI above previous levels to reach about USD15 billion at the end of the current fiscal year 2024-2025.

The German Development Bank approved financing worth EUR147 million for energy efficiency improvement projects in Egypt

Minister of Petroleum and Mineral Resources said that the Sukari gold mine has produced 5.8 million ounces since the start of production.

TMGH (FV: EGP75.00, OW) is undertaking the legal and technical procedures related to projects in Iraq.

MBSC posted its financial results for 2Q24 with net profit soaring to EGP180.0 million (+314% YoY, +334% QoQ) mainly on a reverse of a financial obligation of EGP135.4 million after settling the contractual dispute with CCAP’s subsidiary. 1H24 earnings surged 111% YoY to EGP221.5 million. MBSC is trading at FY24e PE of 8.8x and EV/EBITDA of 10.2x.

SWDY (FV: EGP45.69, EW) did not sign any contracts regarding the execution of a big industrial zone in Iraq, according to a release sent to EGX.

The government is considering a program to support steel rebar exports to African and Arab countries. The subsidy program is to include reducing production costs and manufacturing inputs, as per local media.

A consortium of ORAS (FV: EGP344.18, OW), Hitachi, and French firm Colas Rail will develop Metro Line 1 under an agreement inked with the National Tunnels Authority. The project is to be financed by EGP10 billion from the Transport Ministry and EUR605 million from soft loans from international financial institutions, as per local media.

Fertiglobe, ORAS (FV: EGP344.18, OW), and Scatec will receive usufruct rights in Ain Sokhna Industrial Zone to set up wind and solar power plants that will feed their green hydrogen plant.

According to media, BINV plans to sell a 20-30% stake in its subsidiary, Gourmet, before the end of 2024.

The FRA is studying the files of issuing three sukuk programs worth up to EGP12 billion.

Sources confirmed the completion of the formation of the new Board of Directors of National Bank of Egypt and Banque Misr.

According to local press, Basata Holding for Financial Payments, a JV between MTIE and BINV, wants to increase its stake in Jordanian bill payment provider MadfoatCom to 49%.

According to local press, DSCW wants to complete its proposed acquisition of a controlling stake in Twin Top Real Estate Investment Company by the end of 3Q24.