Pre-Trading Thoughts

Al Ahly Pharos

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.<