Pre-Trading Thoughts

Al Ahly Pharos

Annual urban inflation cooled for the fourth consecutive month, registering 27.5% YoY in June, down from 28.1% YoY in May.

The new government explained detailed plans for its three-year term. Goals include:

• Private investments to make up 51% of total investments in Egypt by the fiscal year 2026-2027 and 70% by 2030.
• Cabinet aims to reduce the unemployment rate to 6.5% by FY2026-27 and to 6.1% by 2030.
• Cabinet has revised downwards its tourism target and now expects to welcome 25 million tourists annually by 2030, down from a previously-set goal of hitting 30 million tourists by 2028.
• The government aims to expand health insurance coverage to reach 85% of the population by 2026-2027 and have local pharma production meet 94% of local market needs.
• Raise growth rates during the fiscal year 2026-2027 to 5.5%, up from the target of 4.2% for the current fiscal year.

The government plan document also estimated the value of the proceeds of the first and second phases of the government IPO program at USD5.8 billion.

Italian Energy giant Eni plans to drill two new wells in the Zohr field in 2H2025 with investments of USD160 million.

According to a member of the Egyptian Federation of Tourism Chambers, Egypt’s general revenue from tourism amounted to USD6.6 billion in 1H2024, as the number of tourists arriving to Egypt reached 7 million tourists.

The EU Ambassador to Egypt said that it is likely that the disbursement of the financing packages related to the strategic partnership between Egypt and the EU will begin during the fall semester.

The government's work program reportedly revealed its intention to allocate the equivalent of 1% of GDP from the proceeds of the government IPO and divestment program to reduce government debt.

UAE-based Al Nowais’ AMEA Power is looking to up its investments in Egypt and set up 2.5 GW-worth of solar and wind projects, according to a statement.

The IMF Executive Board has pushed back the third review of our USD8 billion loan program to 29 July to “finalize some details”.

The Minister of Finance confirmed the disbursement of about EGP3 billion by the end of this week in Phase 7 of the immediate cash payment initiative for exporters.

We updated our FV for ESRS to EGP120.21/share, up from EGP97.02/share, and maintain our Overweight recommendation. ESRS is currently trading at FY24e P/E of 5.0x and EV/EBITDA of 3.4x.

Abu Dhabi-based Electra Investment Holding now holds a 20.0% stake in SWDY.

Germany, through its H2Global hydrogen initiative, inked a 20-year, EUR397 million green ammonia offtake agreement with UAE-based renewables player Fertiglobe. Fertiglobe’s green hydrogen partnership with ORAS (FV: EGP344.18, OW), Scatec, the Sovereign Fund of Egypt (SFE), and the Egyptian Electricity Transmission Company will provide the green hydrogen needed for Fertiglobe to produce green ammonia at its ammonia plants.

TALM reported 9M23/24 results where net profit recorded EGP613 million (+78% YoY).

BPE Partners is eyeing two investments worth a combined c. EGP400.0 million in the local market.

BTFH is planning to add 6 new investment funds to its current 17 funds.