Pre-Trading Thoughts

Al Ahly Pharos

Head of the Trade Ministry's Commercial Representation Authority discussed potential investments in Egypt with representatives from major Indian companies.

The IMF said that Egypt may abandon quarterly fuel price increases in exchange for a firm commitment to raise prices to levels “Cost recovery” by the end of the year.

The Ministry of Finance is considering raising the zero bracket of income taxes for individuals to EGP45,000 annually instead of EGP40,000 currently.

Prime Minister Moustafa Madbouly has reappointed Ahmed El Sheikh as the chairman of the Egyptian Exchange (EGX) for another one-year term starting 26 August, and appointed Noha Khalil as acting CEO of the Sovereign Fund of Egypt (SFE) fund, following the resignation of Ayman Soliman.

The CBE reported a net income of EGP22.8 bn in FY2023-24, compared to losses of EGP86.3 bn in the previous fiscal year. This marks the first time that the bank has turned a profit since it was last in the green in FY 2016-17.

The Oil Ministry is rolling out a batch of incentives to help ramp up oil and gas output by encouraging investment in exploration, drilling, development, and production. The new incentives offer foreign entities an increased share of the natural gas or crude oil produced from their concessions in Egypt, provided they increase production through new investments in exploration and development.

Khaleda Petroleum Company, on behalf of the American Apache Company and the EGPC, announced the investigation of a new petroleum discovery in the Western Desert.

We downgrade our FV for SUGR to EGP77.6/share down from EGP92.7/share, maintaining Overweight recommendation, given the decline in volumes from the strong base of 2023. SUGR is currently trading at 2025f P/E of 6.0x.

DSCW reported an outstanding 2Q24 consolidated financial results, where attributable net profit recorded EGP366 million (+250.6% YoY, +210.1% QoQ). This brings 1H24 bottom-line to EGP484 million (+300% YoY). DSCW is currently trading at 2024f P/E of 4.6x.

DSCW is looking to snap up a controlling stake in Twin Top Real Estate Investment Company.

Auto sales in July climbed 42.2% MoM to 11.4k vehicles. The total number of vehicles sold is the highest reported since August 2022. Passenger car sales saw the biggest jump, rising 50.7% from June.

CIB has inked an agreement with the Chemicals & Fertilizers Export Council (CEC) that will see it provide financial and strategic support to local chemical exporters in a bid to boost the competitiveness of the sector’s exports.

A local consortium led by Abu Tartour For Phosphoric Acid will set up a USD1.2 billion phosphoric acid production plant. The project will be carried out over a 36-month period and aims to produce 900k tons of phosphoric acid a year.

Egyptian Natural Gas Holding Company (EGAS) is inviting bids for 12 new oil and gas exploration blocks in the Mediterranean and Nile Delta. The offering includes 10 offshore and two onshore areas.

ETEL is in advanced talks with NTRA to expand the legal framework to allow unregulated companies to own cell towers.

FAIT will sell its entire 48.57% stake in Giza Paints and Chemical Industries in an EGP32.3 mn transaction.

CNFN is planning, with Global Auto for Cars, to increase the capital of their subsidiary “Global Contact Finance” to EGP75 million in 3-month period.

ORHD sold a commercial building in O West to Seoudi Supermarket for EGP332.0 million.

35 billet smelters are negotiating with the Ministry of Industry and Transport to obtain licenses to produce steel rebars, which will enable them to import manufacturing supplies and compete in the local and export rebar markets.