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Al Ahly Pharos

Welcome to our daily podcast featuring the day's top news commentary and technical recommendations delivered to you before the opening bells of the Egyptian Stock Exchange (EGX).Alongside our morning podcasts, we will be publishing a collection of episodes presenting indepth analysis and insights on EGX's equities, all brought to you by Al Ahly Pharos.

Tracks

Pre-Trading Thoughts
The Federal Reserve held interest rates steady at their current range of 5.25% to 5.5%, and revised its outlook for rate cuts to just one in 2024. The CBE revealed that the balance of foreign investments in Egyptian treasury bills in March, surged to USD32.5 billion, up from about USD13.7 billion in February. Chinese shipping and logistics group Cosco Shipping will invest USD375 mn this year to increase its container capacity at various Egyptian ports. AD Ports will develop, operate, and manage three cruise terminals in Hurghada, Safaga, and Sharm El Sheikh that will launch in 2025, after inking a concession agreement with the Red Sea Port Authority that will see AD Ports invest USD4.7 mn over 15 years. EBRD is mulling over extending a USD71.7 mn senior loan to finance a 200 MW wind farm in Ras Ghareb, developed and operated by the UAE’s Masdar and Infinity Power. Egypt joins Pakistan, Nigeria, and Kenya as one of the once-unloved emerging markets that “lured” investors back into their local debt instruments with higher interest rates and liberalized exchange rates, the Financial Times writes. Egypt saw investors pour some USD 15 bn into local bonds this year, the majority of which came following the announcement of the Ras El Hekma agreement. Egypt is preparing to begin bidding procedures to an international consultant to develop a strategy to localize the manufacture of electronic chips and solar cells. The CEO of the General Authority for Investment and Free Zones stated that Egypt attracted FDI worth USD10.04 billion in FY23-24, with a growth rate of 12.3% compared to the previous fiscal year. Egypt was recently able to pay USD400 million arrears to the airlines operating at various Egyptian airports. SWDY is to reduce its capital from EGP2.17 billion to EGP2.14 billion by cancelling treasury shares in total of 30 million shares at a par value of EGP1/share. Accordingly, we adjust SWDY’s FV to EGP45.51/share from EGP44.88/share taking into account the new number of shares of 2.14 billion shares, instead of the previous 2.17 billion shares, post listing the issued capital decrease, effective 24 June 2024. EGCH general assembly approved the adoption of the final price for the additional work of the nitric acid and ammonium nitrate project for the equivalent of USD117 million (USD97.4 million and EGP 937.8 million).  MOIL posted standalone net profit of USD609 thousand for the year ended 31 March 2024 as compared to a net loss of USD481 thousands last year.  COMI reduces the interest rate by 2% on the 3-year fixed rate CD, becoming the first bank to announce a reduction in interest rates on savings certificates, after the inflation rate declined in May to the lowest level in two years.
03:43 6/13/24
Technical Analysis
Market Overview CIRASUGRGGCCEGASISMQEXPAAFDIprepared by: Mayada Amin- CETA, CFTe
03:08 6/13/24
Pre-Trading Thoughts
Egypt is looking to secure a USD 1 bn — or its equivalent in another currency — soft loan from the Brics’ New Development Bank (NDB) by the end of 2024 or the beginning of 2025. The government is also in talks with the NDB over the issuance of local currency-denominated bonds.The government will reportedly launch its new export subsidies program starting in July. The EGX will today launch Egypt’s maiden shariah-compliant index after getting the approval from the Financial Regulatory Authority's main shariah supervisory committee. The index will be launched in collaboration with Standard & Poor’s.The CBE yesterday accepted bids for EGP929.8 bn in fixed-rate deposits with 14-day maturities at a rate of 27.75%.The Suez Canal Authority decided to raise the fees for using the electronic service to pass through the canal, starting next September to USD300 and to USD500 starting in 2025 up from USD50 currently.The World Bank expects the Egyptian economy to grow by 4.2% in FY2024-25, rising to 4.6% in FY2025-26.CCAP’s USD28 million debt buyback program attracted EGP1.7 billion (USD35.9 million) in subscription orders from shareholders in its second and final phase, which took place on 9 June, the company said in an EGX disclosure.The Egyptian Mineral Resources Authority (EMRA), East Gas Company and IMEX International have signed a shareholders agreement to establish a company for upgrading phosphate ores — one of the key components used to make chemical fertilizers. The company will earmark USD250 million to build a facility with an annual processing capacity of 1 million tons.OPEC on Tuesday stuck to its forecast for relatively strong growth in global oil demand in 2024, despite lower-than-expected use in the first quarter, saying travel and tourism would support consumption in the second half of the year. OCDI and Marriott International signed an agreement to open two Tribute Portfolio hotels in Egypt: the Tribute Portfolio Hotel at Forty West in West Cairo, opening in 2027, and the Tribute Portfolio Hotel at June on the North Coast, opening in 2029.GBCO subsidiary, Itamco, and the Military Production Ministry’s Helwan Company for Machinery and Equipment will assemble and manufacture the Indian Bajaj’s eco-friendly, fuel efficient and economically competitive Qute model.State-owned investment bank CICH’s asset management arm, CI Capital Asset Management, wants to launch “the country’s first” fund investing in shariah-compliant stocks when the EGX launches its maiden sharia-compliant index.Private equity firm BINV and the Sovereign Fund of Egypt (SFE) are reportedly planning to attract local institutions to buy into a planned capital increase up to EGP1 bn for B Investments’ healthcare arm B Healthcare Investments, the capital increase could take place within months.
03:39 6/12/24
Technical Analysis
Market Overview OLFIJUFOEFIDBTFHPrepared by: Mayada Amin- CETA, CFTe
02:09 6/12/24
Pre-Trading Thoughts
May 2024 saw a continued decline in the annual urban inflation, falling to 28.1% from April’s 32.5%. Core inflation, which excludes highly volatile and administered prices, declined for the third consecutive month in May reaching 27.1%, compared to 31.8% in April.The European Bank for Reconstruction and Development (EBRD) will announce a new electricity production project to be carried out in partnership with the private sector. The bank has plans as well to take part in financing a “major” green hydrogen project in Egypt next year. The bank is interested in acquiring minority stakes in a few local banks.The Oil Ministry plans to import the first shipment of liquefied gas at the port of Ain Sokhna during the last week of June. The Sovereign Fund of Egypt (SFE) has acquired a 20% stake in the local pharma chain Care Pharmacies for EGP75 mn.The government is set to launch an online platform for medical tourism within the next two weeks. The platform will allow users to reserve spots in any hospital in Egypt and apply for and receive a visa for the medical treatment within 72 hours.An official at the Shalatin Mineral Resources Company said that 3 foreign companies won the company's global bid for gold exploration. The official said that the winning companies were one Russian, one English, and the last is Saudi. The names of the winning companies are scheduled to be officially announced in the coming days. We upgrade our FV for JUFO to EGP30.80/share, maintaining Overweight recommendation to factor in:•           New Macro assumptions•           Capex of EGP2.0 billion in 2024.•           Exports expansion mainly to the MENA region.•           Higher ASP and volumes recovery.•           Margin improvement relative to historical averages.JUFO is currently trading at 2024f P/E of 8.2x.BINV’s general assembly approved the distribution of a cash dividend of EGP 1.00/share or its equivalent in USD (DY of 4.9%), with a total amount of EGP218.36 million, in addition to EGP9 million to be distributed to the BoD. Aman Consumer Finance, RAYA's financial services arm, has issued EGP1.04 bn worth of securitized bonds. Local payment cards manufacturer Masria Digital Payments (MDP) is adding three production lines to its factory in Tenth of Ramadan City this year, with investments of USD 2 mn. Alameda Healthcare will invest some USD245 mn to expand its footprint in Egypt and across the region, through setting up new hospitals, acquiring existing ones or expanding its own hospitals.
02:52 6/11/24
Technical Analysis
Market Overview HRHOORWEAMOCESRSALCNMFPC JUFOPREPARED BY: Mayada Amin - CETA, CFTe
02:47 6/11/24
Pre-Trading Thoughts
The Head of EBRD in Egypt said that the bank has pumped USD500 million into Egypt YTD, and expects the bank's financing to reach USD1.2 billion by year-end.The Cabinet has turned down a proposal from the Supply Ministry to raise the price of subsidized sugar to EGP18 from EGP12.6 per kilo.The government will not be importing sugar for a while and the private sector is expected to import some 250k tons of sugar over the next three months.Suez Canal revenue continued to decline in May, falling some 64.3% YoY to record USD337.8 million.Egyptian banks’ holdings of sovereign debt are about 554% of their capital.The Finance Ministry will release its 2024-2030 tax policy document for public consultation in the coming weeks.Egypt is preparing to assess the final numbers of immigrants, refugees, and foreigners, as well as their geographical distribution in the country, and their economic impact, during the coming year.The Head of the Pharmaceuticals Division at the Federation of Chambers of Commerce expects an increase in the prices of pharmaceutical products by the end of July with the new production being manufactured, indicating that the average increases are between 20% and 25%.We updated our FV for SWDY to EGP44.88/share, up from the previous EGP34.96/share. SWDY is trading at FY24e P/E of 7.9x and EV/EBITDA of 4.0x. ESRS’s (FV: EGP97.02, OW) general assembly approved the decrease of the company’s capital by writing off 910,481 treasury shares with a face value of EGP4.6 million.Egypt's aluminum exports surged 15% YoY to USD259 million in 4M 2024. We raised our FV of EFIH to EGP35.35/share, up from EGP23.50/share. EFIH is currently trading at 2024f P/E of 22.9x and EV/EBITDA of 15.1x.EKHO sent a release announcing the resumption of the gas supply and operations at the factories of its subsidiary, AlexFert, after the natural gas network pressure stabilized.EGCH announced that the subscription for the second phase of the remaining shares, amounting to 3,381,420 shares, was covered 23x with an allocation ratio of 0.04 for each share.CIRA is considering borrowing around EGP600 million from the National Bank from Egypt to partially finance the establishment of the first phase of Saxony University.MASR (FV: EGP5.24, OW) is partnering with CIRA’s subsidiaries, Al Ahly CIRA and Eduhive, to establish Lemania Swiss International School in Taj City, and is collaborating with Blue Ribbon to establish Klub Kayan in Taj City.Investment management firm Act Financial will begin trading on the EGX by the last week of July, following the closure of the subscription period on 23 July. Act Financial is to offer around 32% of the company by offering around 360 million shares at an IPO price of EGP2.9/share.Weekly Commodities Update |   | Last Price | WoW Change, % | Brent, USD/bbl | 79.6 | -2.5% | Diesel-HSFO Spread, USD/ton | 269 | 0.4% | Egypt Urea, USD/ton | 343 | 5.4% | Polyethylene, USD/ton | 1,030 | 0.0% | Polypropylene, USD/ton | 995 | 1.0% | Iron Ore 65%, USD/ton | 128 | -3.0% | Steel/Iron Ore Spreads, USD/ton | 385 | 2.0% | LME Copper Cash Price, USD/ton | 9,638 | -2.8% | LME Aluminum Cash Price, USD/ton | 2,521 | -3.3% | Egyptia Retail Cement, EGP/ton | 2,040 | 0.0% | Steam Coal FOB Newcastle Australia, USD/ton | 132 | -7.7% | SMP, USD/MT | 2,722 | 3.5% | Last price may vary week over week in some indices due to time difference
03:56 6/10/24
Technical Analysis
Market Overview COMISWDY EFIHALCNPHDCESRSABUK AMOCPrepared by: Mayada Amin - CETA, CFTe
03:15 6/10/24
Pre-Trading Thoughts
Prime Minister Moustafa Madbouly’s new government will take their oath before President El Sisi on Tuesday.The IMF has reached a staff-level agreement with Egypt on the third review of its expanded USD8 billion loan program, which is set to unlock USD820 million after the Fund’s executive board gives the go-ahead in the coming weeks.Ain Sokhna will receive the floating LNG regasification unit that the government will lease from Norway’s Höegh LNG in mid-June as it gears up to welcome LNG shipments to help meet heightened local demand. Oil Ministry spokesperson Hamdi Abdel Aziz confirmed that power supplies have returned to their normal levels before the heatwave that hit the country last week. The government will pay 25% of its arrears to international oil and gas companies operating in the country this week. The government cut its target for wheat exports by 17% YoY to 5 million tons during the current year.TMGH (FV: EGP75.00, OW) achieved YTD sales of EGP122.0 billion, up 171.1% y/y. SWDY reported solid 1Q24 consolidated results with attributable earnings surging to EGP4.0 billion (+37%, +95% QoQ). SWDY is currently trading at FY24e P/E of 8.6x and EV/EBITDA of 4.2x.SWDY is studying the execution of some projects in Iraq especially in the infrastructure and industrial sectors.SKPC announced that it has begun receiving feed gases and gradually starting up its plants following the stabilization of gas pressure in the network. ABUK also announced on Thursday that it will gradually go back to normal operation.CCAP announced the completion of the first phase to submit applications to participate in the purchase of Qalaa Holdings’ external debt which lasted from 2 to 5 June 2024. The total amounts collected in the first phase were EGP875.4 million, equivalent to USD17.5 million out of a total value of USD21.6 million with a coverage of 81.1%. The remaining amount to participate during the second phase is USD4.1 million, equivalent to EGP204.0 million. The second and final phase of applications for participation will be opened on 9 June 2024.Methanex Egypt announced that the Oil Ministry promised to resume natural gas supply to the company’s plants during the current week. Methanex is the sole producer of Methanol in Egypt.The CBE announced the completion of the deployment of nearly 6,500 ATMs as part of the initiative it launched in 2020 to deploy ATMs in areas suffering from shortages of machines with the participation of 26 banks. The CBE revealed that the number of Meeza cards in the Egyptian market reached 33.7 million issued cards.HRHO's investment banking division completed its advisory on the USD150 million IPO of Miahona, a leading developer of water and wastewater infrastructure in Saudi Arabia.Banque du Caire net profit in 1Q24 grew 129% y/y to EGP2.4 billion.
02:54 6/9/24
Technical Analysis
Market Overview 
01:07 6/9/24
Pre-Trading Thoughts
Remittances from Egyptians abroad surged 43.8% YoY in April to USD2.2 billion. On a monthly basis, remittances increased for the second consecutive month, rising 2.6%. A number of government officials are reportedly in London today to gauge foreign appetite for fresh debt issuances, including the possibility of a eurobond issuance. The Ministry of Petroleum will launch an international tender to import about 15 shipments of liquefied gas until next October to meet the country’s fuel needs.The Supply Ministry is now looking to import some 5 million tons of wheat this year, down from its initial target of 6 million tons, as it works to up its purchases of local wheat. The Finance Ministry will begin disbursing the first batch of export subsidies under the seventh phase of the program today. Some 360 exporters will start receiving some EGP10 billion in export subsidies during this phase. The second and third batches are scheduled for 27 June and 8 August. The General Administration of Cost and Pricing at the Egyptian Electricity Utility Regulatory Authority will finish within days the proposals and scenarios for determining electricity prices that are to be implemented as of next July. The Head of the Sugar and Integrated Industries Company said that the fair price of sugar on the ration card is EGP24 per kilo, after the rise in production costs.Pressure fluctuations in the natural gas pipeline network have forced several companies in the fertilizer and petrochemical sector to suspend production until the gas flow stabilizes. MFPC, ABUK, and  EKHO's AlexFert said they are putting production on hold for an initial 24 hours, while SKPC and EGCH said they are suspending production until the pressure levels stabilize. On the other hand, EFIC announced that it will not be affected by the cut as it does not use natural gas as a main raw material. However, the Oil and Electricity Ministries said they would gradually increase gas supplies to fertilizer companies starting today.MBSC posted its unaudited financial results for 1Q24 with net profit dropping to EGP41.5 million (-32% YoY, -67% QoQ) primarily on tight margins due to the company’s high dependency on imported coal as its main source of energy to operate its facility. MBSC is trading at FY24e PE of 7.7x and EV/EBITDA of 5.6x. Rosetta for Energy Solutions, a subsidiary of TAQA Arabia signed a MoU with Elsewedy Industrial Development, a subsidiary of SWDY to supply natural gas to Elsewedy Industrial City (EIC) in Tanzania via a first-of-its-kind innovative LNG Virtual Pipeline. Egypt's total iron and steel exports dropped 21% YoY to USD600 million in the first 4-months of 2024.EAST has addressed some property and liability insurance companies operating in the Egyptian market to present its technical and financial offers to insure the company’s assets, including the company’s buildings, facilities, and liabilities, with total amounts amounting to EGP65 billion.A number of Egyptian banks doubled the limits of the use of credit cards in Saudi riyals, whether for purchases or cash withdrawal, in tandem with the approach of the Hajj season.SFE is conducting a restructuring process for Misr Life Insurance Company at the moment, by separating real estate activity, in preparation for selling a share of it to one of the strategic investors during the coming period. 
04:08 6/6/24
Technical Analysis
Market Overview ORWEPHDCHRHOSWDY TMGHESRSprepared by: Mayada Amin- CETA, CFTe
03:37 6/6/24
Pre-Trading Thoughts
Net International Reserves increased to USD46.126 billion in May, the highest on record, up from USD41.1 billion in April. It is known that the second tranche of the Ras El-Hekma deal funds was received by the Egyptian authorities around mid-May.Ministries of Petroleum and Electricity announced they were extending rolling power blackouts across the country for an extra hour on Tuesday to allow for preventative maintenance on its regional gas and power networks and because of increased consumption caused by a heatwave.Egypt PMI jumped to a 33-month high as demand and inflation trends improve, recording 49.6 in May from 47.4 in April, as a marked cooling of inflationary pressures since early 2024 spurred a near-stabilization in demand conditions.The Sovereign Fund of Egypt (SFE) will start offering 7-8 former ministerial headquarters in Downtown Cairo to investors during the second half of the year. Adnoc Distribution, the distribution arm of UAE’s Abu Dhabi National Oil Company, is set to begin manufacturing motor oil in Egypt before the end of 2024. The company is also planning to add 15-20 gas stations in Egypt, Saudi Arabia, and the UAE over the next six monthsHousehold appliance manufacturers and retailers are set to start slashing prices no less than 5-10% in response to the goods recently released from customs and from the first post-float import cycle hitting the market.The Oil Ministry has once again reduced natural gas supplies to energy-intensive fertilizer companies by 20-30%, pushing a number of factories to close their doors until their gas supplies go back to normal levels. The effect of such a cut will be significant only if it is going to be in place for a long period of time.Oil prices fell another USD1/bbl yesterday, extending losses that pushed them to four-month lows, reaching a low of USD76.76/bbl. Brent has now fallen 8% over the past week.The Managing Director and CEO of EAST revealed that the company has sufficient liquidity and is ready to purchase raw tobacco worth up to USD1.2 billion to secure its needs for the next two years, with support from the Emirati partner.GB Auto, GBCO’s auto arm and the local agent for Chery cars, is considering approaching the Ministry of Finance to include the Chery Tiggo 4 Pro model within the car replacement initiative, and studying benefiting from international agreements in preparation for taking steps towards export during the coming period.ValU, HRHO’s arm, launched Ulter, a high-end platform that will finance purchases of luxury goods and services, including home finishing, travel, automotive, and marine transport, for affluent consumers.The Central Bank of Egypt has issued fresh regulations putting a limit as to how long banks, payment services providers, and credit rating agencies can use the services of one accounting or auditing firm. The regulations also include a clause that ensures the client cannot use the same firm except after the passage of a specific period of time. Firms have 12 months to comply with the new rules.Al Gioshy Steel is in talks with several Italian suppliers of steelmaking equipment to install a production line at its manufacturing facility next year at a cost between EGP500 million and EGP1 billion. The company aims to double its output to 200-240k tons this year. MTIE has allocated the equivalent of EGP200 million to its Saudi venture, the company through which it plans to enter the Saudi home appliances and electronics market. The company plans to enter the Saudi market next month.ELSH declared EGP0.15/share cash dividends (DY of 2.6%). Record date is 24 June 2024. Distribution date of first installment is 27 June 2024. Distribution date of second installment is 27 February 2025.The Healthcare Ministry is putting together a committee to review medicine prices every six months.
04:47 6/5/24
Technical Analysis
Market Overview PHDCHELISWDYFWRYALCNORWEEKHOAprepared by: Mayada Amin- CETA,  CFTe
03:24 6/5/24
Pre-Trading Thoughts
*Key news articles for today*President Al-Sisi reappointed Prime Minister Mostafa Madbouly on Monday to form a new government after the latter submitted his cabinet’s resignation. The House of Representatives gave its seal of approval to the FY 2024-2025 state budget. The government has penciled in growth of 4.2%, up from an estimated 2.9% in FY 2023-2024. Headline inflation is expected to drop to an average of 17.9%, down from a projected 35.7% this FY. The budget deficit is expected to increase to 7.3% of the country’s GDP, up from 7.2% this year.Pharma companies have begun receiving new pricing guidelines from the Egyptian Drug Authority. Price hikes will vary depending on each company’s cost criteria, with the hikes expected to range from 10-50%.The Minister of Trade and Industry, revealed that the ministry, represented by the Export Development Fund, had issued the first tranche of certificates for phase 7 of the immediate payment initiative to refund export burdens to 478 companies, with a total of EGP7 billion and a net amount of EGP6.3 billion.The CBE sold one-year T-bills worth USD500.6 million with an average return of 5.149%. The proceeds are used to pay off due T-bills, that was sold on June 6. 2023Finance Minister said that the tax policy document circulating on social media is months-old “initial concept” that has now gone through revisions. The document laying out taxation policies throughout El Sisi’s third term is still in the works and will be opened up for community dialogue in the “coming weeks.”The Egyptian Electricity Holding Company, affiliated with the Ministry of Electricity, obtained a loan worth EGP51 billion from a local banking alliance that includes 5 banks, and paid it to the Ministry of Petroleum to deduct its value from its debt.Sources said that launching hedge funds in the Egyptian market will be linked to activating the financial derivatives market first. We upgraded our FV for EAST to EGP39.36/share, maintaining our Overweight recommendation. EAST is currently trading at FY23/24e PE of 7.1x.TMGH (FV: EGP75.00, OW) is continuing its treasury share buyback during the period from 3 June 2024 to 2 July 2024.According to data from the CBE, Egyptian banks received EGP258 bn in deposits from outside the banking system in the first four months of the year, with high-yield certificates of deposits contributing a bulk of the deposits.Banque Du Caire net profit expanded 129% on an annual basis, recording EGP2.4 bn. Gross financing facilities increased by (+10% y/y), while customer deposits increased by 4% y/y.AIH's paid-in capital increase from EGP425 mn to EGP467 mn, financed from 2023 profits, record date is on the 23 of June 2024, while distribution date is on the 24 June 2024.Oil prices fell over 3% yesterday to their lowest in close to four months in response to Sunday’s OPEC+ decision to gradually increase output towards the end of the year, which left investors worried. Brent crude futures fell 3.4% to USD78.36/bbl.HPS Oil & Gas targets investing USD65 million to increase gas reserves in Southwest Alamein, in the Western Desert. In response to circulating news that the Saudi Public Investment Fund (PIF) is interested in buying towers belonging to two Egyptian telecom companies, ETEL said it has been studying the sale and rental of its towers for more than a year, and that the matter is still at the study stage and has not yet received any offers. 
04:28 6/4/24
Technical Analysis
Market Overview SUGROCDIGBCOGDWAORHDORWEMASRPrepared by: Mayada Amin- CETA, CFTe
03:08 6/4/24
Pre-Trading Thoughts
Saudi Public Investment Fund’s (PIF) telecom infrastructure subsidiary, Tawal, is looking to buy several telecom towers from Vodafone Egypt and another undisclosed telecom company. Supply Minister has proposed hiking the price of subsidized sugar to EGP18 from EGP12.6 per kilo. The proposal has not been approved yet by the government.The CBE will auction USD500 million worth of one-year USD-denominated treasury bills with the submission deadline penciled in for 11 AM today.A number of foreign companies are examining investment opportunities in the healthcare sector.The Ministry of Transport, represented by the Egyptian National Railway Authority, will begin evaluating five Egyptian and international alliances, with a total of 12 companies, competing to seize business with a total value approaching EUR403 million.JUFO reported outstanding 1Q24 net profit of EGP479 million (+191.8% YoY,+237.6% QoQ). JUFO is currently trading at P/E24 of 9.6x  . We upgraded our FV for ORWE to EGP30.01/share, maintaining our Overweight recommendation. ORWE is currently trading at P/E24 of 4.8x.DSCW reported 1Q24 attributable net profit of EGP118 million (+613.4% YoY, -3.1% QoQ). DSCW is currently trading at  P/E24 of 5.5x. AMIC released its numbers for April 2024, showing an increase in auto market sales by 11.0% YoY to record 5.7K units driven mainly by a jump in PC sales by 65.5% MoM and 18% YoY.HELI (FV: EGP18.84, OW) reported 1Q24 revenue of EGP239.3 million, up 163.2% y/y and down 98.4% q/q, and 1Q24 net profit of EGP748.5 million, up 3755.4% y/y and down 90.4% q/q. The Iraqi Ministry of Health is holding discussions with Egyptian contractors to take part in revamping 12 hospitals with an estimated cost of USD480 million.EFIC released 1Q24 consolidated net income of EGP428 million (+93% YoY, +132% QoQ). EFIC is currently trading at a PE24 of 4.4x.CCAP shareholders have until 5 June to subscribe to the first phase of the company’s debt buyback. Shareholders who wish to participate are required to pay EGP0.6776 per share.OPEC+ agreed to extend production cuts until 2025 — cuts of 3.66 million barrels a day will be extended until the end of 2025, while voluntary cuts of 2.2 million barrels a day will run through the end of Sep.North Petroleum International Company (NPIC), the Egyptian arm of China’s Zhen Hua Oil, will invest some USD78 million to increase production from its Western Desert’s East Ghazalat concession.British energy company Harbour Energy signed an agreement to finalize the acquisition of Wintershall Dea’s upstream assets in Egypt.SWDY Board of Directors appointed BDO Keys Financial Consulting as an independent financial advisor to prepare a FV Report for the stock in light of FRA’s decision on 30 May 2024.FAIT 1Q24 consolidated net profit recorded an impressive EGP6.2 billion (+179% y/y, +851% q/q). We keep our Equalweight recommendation on FAIT on an updated FV of EGP40.00/share. The stock is currently trading at P/E24 of 3.3x.EFG Hermes One, HRHO’s subsidiary, has signed a partnership agreement with PayTabs Egypt. Weekly Commodities Update Last Price | WoW Change, %Brent, USD/bbl | 81.6 | -0.6%Diesel-HSFO Spread, USD/ton | 267.6 | -3.5%Egypt Urea, USD/ton | 325.0 | 2.4%Polyethylene, USD/ton | 1,030.0 | 0.0%Polypropylene, USD/ton | 985.0 | 1.1%Iron Ore 65%, USD/ton | 132.9 | -1.8%Steel/Iron Ore Spreads, USD/ton | 378.1 | 2.0%LME Aluminum Cash Price, USD/ton | 2,607.1 | -0.4%Egyptian Retail Cement, EGP/ton | 2,039.0 | -0.4% Steam Coal FOB Newcastle Australia, USD/ton | 142.4 | -0.3%SMP, USD/MT | 2,629.0 | 0.0%
06:22 6/3/24
Technical Analysis
Market Overview HRHOHELISKPCORWEPrepared by: Mayada Amin - CETA, CFTe
02:17 6/3/24
Pre-Trading Thoughts
Prime Minister said the government will unveil several investment opportunities in key sectors during the joint investment conference between Egypt and the European Union slated for 29-30 June.Prime Minister and several government officials on Thursday held an online meeting with over 200 international investors, representing 110 companies. The conversation centered around the local investment environment and gave investors the chance to ask questions.Egypt’s net foreign asset deficit continued to narrow in April, falling to USD3.7 billion in the Egyptian banking system, down from USD4.2 billion in March.President El Sisi and Chinese President during El Sisi’s visit to China agreed to allow more high-quality Egyptian products into the Chinese market and to explore local currency-denominated local trade.The World Bank revealed that its program with Egypt regarding implementing the state ownership policy will focus on improving governance in the companies that the state will not exit, working on a clear definition of state-owned companies, and the logic behind state ownership.The expected new increases in electricity segments will be implemented in next July’s bill. The new increases are expected to range in the first three tranches at a rate of no less than 30%, while the other tranches will not exceed 40% and will not be less than 30%.The New Urban Communities Authority (NUCA) has suspended land-for-FX sales for Egyptians abroad until it assesses the compatibility of the initiative with the CBE’s policies. Foreign investors and companies are excluded from this decision.The CBE is expected to issue USD t-bills this week worth USD550 million.TMGH (FV: EGP75.00, OW) achieved strong 1Q24 results, with sales rising 211.5% y/y and 11.0% q/q to EGP38.0 billion. Net profit in 1Q24 increased 219.8% y/y and 279.8% q/q to EGP2.4 billion, supported by stronger operations and FX gains. We maintain our Overweight recommendation of TMGH on an updated FV of EGP75.00/share, up from EGP73.80/share.EAST reported 3Q23/24 net profit of EGP2,276 million (+12.4% YoY, +28.4% QoQ). This brings 9M23/24 bottom-line to EGP5,172 million (-2% YoY). EAST is currently trading at P/E24 of 5x.We downgraded our FV for ECAP to EGP30.82/share from EGP35.56/share, maintaining our Overweight recommendation for the stock with an upside potential of 51%. Relatively tighter margins were the main contributor to the downgrade.The Financial Regulatory Authority (FRA) approved Abu Dhabi-based electrical equipment manufacturer Electra Investment Holding’s bid to acquire a 24.5% stake in SWDY at a price of USD1.05/share.CCAP's shareholders can buy into its debt today after its ordinary general assembly approved the debt payback plan. If the company does not raise the full debt amount tomorrow, it will open a second round of subscription on 9 June.TAQA subsidiary and Egypt-based LNG-focused energy company, Rosetta for Energy Solutions, will provide Elsewedy Industrial Development’s Elsewedy Industrial City in Tanzania with LNG under a recently inked MoU.Petroleum Minister launched the pilot operation of the expanded oil refinery of Nasr Petroleum Company in Suez at EGP2 billion investments to magnify high-quality petroleum products. The project's annual production capacity stands at 1.2 million tons, expanding the refinery's annual capacity from 6.5 to 7.7 million tons.PHAR (OW, FV:EGP38.79) issued its consolidated net profit of EGP604 million, up 2.2x YoY. PHAR is currently trading at FY24 P/E of 8.7x. ValU, HRHO’s subsidiary, is planning for a securitization issuance worth EGP1 billion mid-July 2024.AIH released positive 1Q24 bottom line of EGP13 million (+41% y/y). The growth is mainly attributed to the positive performance of the company’s subsidiaries, Rawaj Consumer Finance and Kahromika.
05:39 6/2/24
Technical Analysis
Market Overview COMIEASTAFDIORASBINVprepared by: Mayada Amin - CETA, CFTe
02:46 6/2/24
Pre-Trading Thoughts
Prime Minister said that a subsidized bread loaf will be sold at 20 piastres, up from 5 piastres starting in June.The government is currently looking into replacing subsidies with cash support, a move which will allow citizens to use the support according to their needs.The government will hike electricity prices in July with the beginning of the new fiscal year. On average, the hikes will exceed 20%, but not yet determined.The EU and Egypt are expected to sign an EUR35 million financing agreement next month to fund renewable projects.The state has put forward some 45 potential investments within the healthcare sector in front of the private sector.The Supply Ministry will ink a number of contracts with local and foreign companies next month to set up 12 trade and logistic centers, worth a combined EGP40 billion.The government plans to exit renewable energy projects, to make a way for the private sector to implement the state’s plans to expand the production of electrical energy from its renewable sources.Egypt's exports of ready-made clothing increased to USD856 million during the 4M 2024, an increase of 23% y/y.ETEL recorded 1Q24 net profit came of EGP3.88 billion (+1.9% YoY, +68% QoQ). ETEL is trading at 2024f P/E of 3.8x.MTIE reported 1Q24 net attributable profit of EGP248 million (+62% YoY, +16% QoQ). MTIE is trading at 2024f P/E of 11.4x.HDBK1Q24 standalone net profit recorded a strong EGP2,426 million (+51% q/q, +83% y/y). HDBK is currently trading at 2024 P/E of 2.6x.BINV (FV: EGP34.16, OW) released positive 1Q24 bottom line recorded EGP892 million (+167% y/y).ValU, HRHO’s subsidiary, signed a partnership agreement with the Magdi Yacoub Heart Foundation to facilitate donations. Also, the company is targeting securitization issuances worth EGP1.25 billion by mid-July and a financing portfolio of EGP13 billion by the end of 2024 (+45% y/y).The online marketplace Jumia and CNFN’s Creditech have renewed their partnership, which started in January 2023. ECAP recorded a drop in 1Q24 net profit to EGP13.8 million (-76% YoY, -56% QoQ) on the back of operating margins erosion, increasing financing costs along with a FX loss of EGP35.4 million. ECAP is currently trading at FY24e P/E of 14.4x.We updated our FV for LSCW to EGP30.08/share (+35% upside potential), maintaining our Overweight recommendation, where the recent economic reforms, mainly EGP floatation, have been instrumental in shaping LCSW's operational performance.MBSC to reduce its capital from EGP679.3 million to EGP611.4 million by cancelling treasury shares in total of 6.8 million shares, effective June 3, 2024. Accordingly, we adjust MBSC’s FV to EGP49.08/share from EGP44.17/share.SCEM is increasing its issued and paid-in capital through a rights issue from EGP1.3 billion to EGP3.0 billion. The capital increase proceeds will be used to pay the company’s loans and credit facilities in order to reduce financing costs.ATQA released 1Q24 net profit of EGP60.9 million, -53% lower y/y, on the back of tighter operating margins as well as a negative figure of EGP123.6 million resulting from the revaluation of short-term investments in listed stocks.Ashry Steel Group aims to invest EGP8 billion into expanding its operations over the coming two years.POUL reported 1Q24 attributable net profit of EGP548 million (flat YoY, +17.2x QoQ). The substantial sequential growth in bottom line is mainly attributed to the weak base effect of 4Q23 given the high FX losses. POUL is currently trading at 2024f P/E of 1.8x.ALCN reported net profit of EGP4.08 billion in 9M23/24, increase of 28% YoY.EGAS purchased an additional 0.61% stake, representing 12.8 million shares, in MFPC, bringing its stake in the company to 9.07%.
06:13 5/30/24
Technical Analysis
Market Overview 
01:59 5/30/24
Pre-Trading Thoughts
Egypt is looking to welcome some 15.5-16.5 mn tourists this year, Tourism Minister said. The Ministry has revised its initial target of 17-18 mn due to geopolitical tensions.There will be no increase to income tax rates or brackets, Finance Minister, in response to media reports that claimed otherwise.The government is looking to launch a telecom-focused sub-fund under the Sovereign Fund of Egypt (SFE) within weeks. The Ministry of Environment is preparing a package of projects worth close to USD15 billion to confront climate change, to be delivered soon to international development institutions.Seven Turkish ready-made clothing companies have requested to move their factories to Egypt. Bonds worth USD1.25 billion that were issued by the government in 2020 are due today. There is another bond repayment next November with a value of USD1.35 billion.Finance Minister recently issued a decision to enhance the “Primary Dealers” system for government debt instruments. This move aims to stimulate activity in the secondary market.GBCO released 1Q24 results:Consolidated attributable net profit recorded EGP626 million (+482.1% YoY, +1.0% QoQ). GB Auto’s net profit spiked by 742.6% YoY to recorded EGP380 million. GB Capital net profit improved by 30.8% YoY yet dipped by 57.0% QoQ to record EGP248 million, this sequential decline came on the back of a high-base effect driven by significant securitization gains realized in 4Q23. GBCO is currently trading at a FY24 P/E of 3.9x.ORWE reported solid 1Q24 results:Attributable net profit of EGP427 million (+4.1% YoY, -3.6% QoQ). The sequential decline came on the back of FX losses in addition to the one-off high income tax, due to distortion by dividends distributed from group entities. ORWE is currently trading at 2024f P/E of 4.7x.PHDC achieved stellar 1Q24 results, with 1Q24 sales soaring 376.6% y/y and 31.8% q/q to a remarkable EGP32.3 billion, driven by Badya and the launch of P/X, the company’s latest project next to Palm Hills October. PHDC is comfortably on track to exceed our FY24 sales forecast of EGP66.2 billion.HELI declared EGP1.34/share cash dividends (DY of 12.9%). Record date is 10 Jun-24. Distribution date is 13 Jun-24.ARCC reported 1Q24 attributable net income of EGP152.6 million (-37% YoY, -23% QoQ). Bottom-line drop was mainly backed a FX loss hit on the company’s P&L. ARCC is trading at FY24 P/E of 5.3x.MCQE reported 1Q24 attributable net income of EGP31.5 million (-52% YoY, -61% QoQ). Operating margins were adversely affected by high exchange rates as the Group depends mainly on imported coal as its main source of energy to operate its plants. MCQE is trading at FY24e P/E of 16.8x.CICH 1Q24 net attributable profit recorded a strong EGP940 million (+220% q/q, +194% y/y), mainly boosted by FX gains, which recorded EGP1,039 million. CICH is currently trading at P/E24 of 3.0x.CICH has announced its intentions to set up an on-the-ground presence for its investment bank in Saudi Arabia and the UAE.Some 200 pharma products could be subject to price hikes ranging from 5-20% starting next week. The price hikes will eventually hit a total of 1.5k products over the coming 12 months.RMDA announced the launch of Ramelact, Egypt's first Lactase Enzyme supplement for the treatment of Lactose Intolerance.ADQ’s AD Ports has inked an MoU with Egyptian shipping giant Transmar and ORAS to explore the possibility of setting up a green methanol storage and export facility targeting maritime transport.ElSewedy Cement increased its stake in CCAP from 3.85% to 5.51% through at an average price of EGP2.44/share.KIMA received the FRA's approval to invite shareholders to subscribe to the remaining shares of the capital increase amounting to 3.4 million shares.&
06:31 5/29/24
Technical Analysis
Market Overview SWDYSKPCMFPCBINVPHDCPrepared by: Mayada Amin, CETA, CFTe
02:38 5/29/24
Technical Analysis
Market Overview Prepared by: Mayada Amin- CETA, CFTe
01:24 5/28/24
Pre-Trading Thoughts
Foreign investments in the secondary market for treasuries recorded a net sale on Monday of EGP1.7 billion, the first after the EGP flotation early March. Foreigners bought EGP326 million worth of treasuries and sold about EGP2.04 billion. American energy company Apache invested USD137 million in exploration activity in Egypt during the 1Q24. The government is looking to cut down on its spending on bread subsidies to bring the selling price closer to the “massive” cost of production, Prime Minister said. He explained that the government will continue to subsidize bread. Prime Minister also signaled that we could see more fuel price hikes as the state looks to “restore balance” between cost of production and end price by the end of 2025. This will happen “gradually” and will not include diesel. Prime Minister said that the Electricity Minister will prepare a plan as to how the government can completely cut its spending on electricity subsidies over the coming four years. Households with light consumption will continue to see their electricity bill heavily subsidized but the government will be able to cover the cost through other outlets. The government is looking into importing wheat from Mexico, Zimbabwe, and Sweden in a bid to diversify its wheat across different continents, a government official said.  Prime Minister said that he assigned the Ministers of Electricity and Petroleum to develop a clear plan to bring load-shedding to an end, with the end of daylight saving time, no later than next November or December. The USD concessions by individuals and companies to banks and exchange offices since 6 March 2024 has reached about USD3 billion, sources said. Saudi Arabia’s Public Investment Fund (PIF) is in talks to acquire an unspecified minority stake in local agriculture firm Daltex Corporation through a capital increase. GV Investments’ automotive arm GV auto will start locally manufacturing Chinese state-owned auto manufacturer FAW Group’s cheapest EV model in 1Q25. The production will mainly target ride-hailing services.. The companies will spend up to USD20 million on industrial facilities.We issued a valuation update for BINV where we maintain our Overweight recommendation on an updated FV of EGP34.17/share given the company’s recent round of new investments. CNFN subsidiary, Sarwa Insurance, targets EGP80 million in profits by the end of this year and plans to increase its paid-in capital from EGP138 million to EGP250 million during the first half of the fiscal year 2024-2025.
03:11 5/28/24
Pre-Trading Thoughts
Egypt and Italy agreed to kick off negotiations for the fourth phase of their debt swap arrangement.The government intends to invest EGP8 billion to establish six strategic stores for medicines and medical supplies, with construction operations to be completed during the next year.The government intends to renew the initiative to exempt gold from customs until the end of next June.The Chairman of the Plan and Budget Committee in the House of Representatives stated that Egypt will pay another USD1.2 billion in dues to foreign oil companies within two weeks.Companies planning mergers and acquisitions will need to secure the Egyptian Competition Authority’s (ECA) approval before proceeding starting 1 June 2024.Local bus service GoBus plans to list 30% of its shares on the EGX within the next two years.MASR (FV: EGP5.24, OW) reported 1Q24 financial results. Net profit in 1Q24 grew 287.3% y/y and 51.9% q/q to EGP1.2 billion. HELI (FV: EGP18.84, OW) AGM approved the distribution of EGP1.34/share cash dividends (DY of 12.8%) within a month.According to local media, MASR (FV: EGP5.24, OW) and HELI (FV: EGP18.84, OW) plan to launch their 491 feddan co-development project in New Heliopolis before the end of FY24.We updated our FV for EGAL to EGP125.21/share maintaining our Overweight recommendation. EGAL is currently trading at FY23/24e P/E of 5.3x and EV/EBITDA of 3.5x.LCSW reported solid 1Q24 consolidated results. Net attributable income surged to EGP477.5 million (+436% YoY, +331% QoQ). LCSW is currently trading at FY24e PE of 2.8x and EV/EBITDA of 2.3x.We raised our FV for DOMT to EGP15.27/share from EGP13.42/share and upgrade our recommendation from Equalweight to Overweight.OLFI reported 1Q24 financial results. Attributable net profit of EGP157 million (+36.4% YoY, -3.6% QoQ). OLFI is currently trading at 2024f P/E of 5.6x and EV/EBITDA of 2.2x.CLHO reported 1Q24 financial results where net attributable profit stood at EGP182 million in 1Q24 (+92.6% YoY, +70% QoQ). CLHO is currently trading at 2024f P/E of 14.7x and EV/EBITDA of 7.7x.BTFH recorded impressive 1Q24 results. 1Q24 net income recorded EGP514 million compared to a net loss of EGP52 million in 1Q23.Asset management companies seeking to utilize robo-advisors will need to have a minimum capital of EGP15 million to obtain the required license.SWDY sent a release to EGX clarifying that the contractual procedures of electromechanical works for the high-speed electric train stations between the cities of Ain Sokhna and Marsa Matrouh are being completed to reach a fully activated contract with the receipt of the sites along with the receipt of the advance payment after providing bank guarantees. ABUK announced that it has successfully completed the overhaul activities of Abu Qir 1 plant on 25 May 2024.KIMA sent a release concerning the subscription of the old shareholders in the company's capital increase. The company announced that 796.6 million shares have been subscribed to with coverage rate of 99.58%.Weekly Commodities Update
05:14 5/27/24
Technical Analysis
Market Overview ETELCCAPPHDCAMOCprepared by : Mayada Amin - CETA, CFTe
02:37 5/27/24
Pre-Trading Thoughts
The CBE decided to keep the current key interest rates unchanged in its meeting held on Thursday. The CBE attributed its decision to the easing inflationary pressures, among other factors.The IMF is currently conducting the third review of Egypt’s expanded USD8 billion loan program.UK-based and Africa-focused petroleum firm Vivo Energy has reportedly submitted an offer of around USD100 million for 174 gas stations currently owned by state-owned fuel retailer Wataniya.The government has reportedly instructed ministries and associated agencies to exchange any USD they have with the CBE for EGP. Any ministry or agency that needs to source foreign currency will need to approach the CBE with the equivalent amount in EGP to gain access to FX, according to the outlet.Trading of treasury bills will be made available through brokerage firms on the EGX within the next three to four months.Oil Ministry needs an additional USD300 million per month in order to import the energy needed to put an end to the power cuts.Energean raised its targeted investments in exploration and development in Egypt during 2024 to USD40-60 million from USD30-50 million in 2023. The Minister of Environment revealed that negotiations are underway with international partners to provide new financing to Egypt worth USD1 billion to confront climate changes.HELI (FV: EGP18.84, OW) selected MASR (FV: EGP5.24, OW) as the co-developer of HELI’s 491 feddan land plot in New Heliopolis. The project is expected to generate total revenue of EGP194.4 billion over 12 years.HRHO 1Q24 net profit after tax and minority interest recorded EGP1,821 million (+124% q/q, +110% y/y). The stock is currently trading at 7.0x P/E24 and 0.9x P/B24.EGBE 1Q24 standalone net profit pre-appropriations recorded EGP537 million (+70% y/y, +47% q/q). We reiterate our Overweight recommendation on EGBE on an updated FV of USD0.54/share, up from USD0.32/share. EGBE is currently trading at P/E24 of 2.9x and P/B24 of 0.7x.  We raised our FV for EFID to EGP46.17/share from EGP40.29/share, to factor in:Updated macro assumptions.Higher revenue growth on the back of price increases amid this inflationary environment in addition to ramp up in volumes given the company’s capacity expansion plan.Margin recovery given price increases and cooling down in raw materials costs.EFID is currently trading at a FY24 P/E of 9.4x and an EV/EBITDA of 6.8x.DOMT reported 1Q24 full financials. Net profit of EGP153.3 million (+1.3% YoY, +53.2% QoQ). DOMT is currently trading at 2024f P/E of4.9x and EV/EBITDA of 3.4x.The Ministry of Transport extended the construction and execution of the second and third lines of the high-speed electric train network for another three years, to be finalized in 2030 instead of 2027. The FRA gave a nod to SCEM to proceed in its issued capital increase through a rights issue from EGP1.33 billion to EGP3.01 billion by EGP1.68 billion distributed over 168.2 million shares at a par value of EGP10/share. ICT solutions firm, Digitize for Investment and Technology, moved to EGX’s main market.
03:53 5/26/24
Technical Analysis
Market Overview MASREASTCLHOMENAprepared by: Mayada Amin - CETA, CFTe
02:26 5/26/24