Pre-Trading Thoughts

Al Ahly Pharos

*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. 2023

Finance 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.