Pre-Trading Thoughts

Al Ahly Pharos

President El-Sisi directed the government to take several urgent social measures, including:

• Raising all salaries for government employees by 50% at a minimum of EGP1,000 to EGP1,200 to reach EGP6,000.
• Meanwhile, the social package allocates EGP15 billion for increasing the salaries of doctors, nurses, teachers, and university faculty members.
• A15% increase in pensions for 13 million citizens at EGP 74 billion.
• A 15% increase in "Takaful and Karama" pensions at the cost of EGP 5.5 billion in FY2023/2024.

GAFI has picked an Emirati consortium to take over the USD22 bn development of a plot of land in the North Coast’s Ras El Hekma.

The government is closing in on a combined USD12 bn in financing, with the IMF doubling the value of the package it had offered to USD 6bn and other, unnamed “development partners” contributing a further USD6 bn.

The CBE and the government are studying new measures aiming at mitigating the pressure on the fx.

The trade deficit narrowed by 23% YoY to USD36.9 bn in 2023.

The Ministry of Transport plans to launch a global tender to international companies during 2Q2024 in preparation for negotiations with a number of international institutions to provide a soft loan worth USD1 billion to cover the foreign part of the second phase of the fourth line of the metro.

The SC Economic Zone Authority board approved 5 new projects recently signed by the Authority, with a total investment of about USD335.5 million.

CIEB (FV: EGP33.00, OW) released 4Q23 financial indicators where consolidated bottom-line stood at EGP1,354 mn (+4% q/q, +66% y/y), bringing FY23 bottom line to EGP5,166 million (+114% y/y). CIEB is currently trading at P/E24 of 5.6x (based on bottom line post minority and appropriations), and P/B24 of 1.8x on 2024 bottom line growth of 23% and RoAE of 35%.

Sohoola Consumer Finance Company, Banque Misr subsidiary is negotiating with 9 local banks to obtain financing worth EGP900 million to support its portfolio.

EAST (FV: EGP38.78, OW) released their full standalone financials for 2Q23/24 showing net profit of EGP1.77 billion (-12.4% YoY, +57.8% QoQ), bringing 1H23/24 net profit to EGP2.89 million (-16% YoY). EAST is currently trading at a FY23/24 P/E of 6.1x and an EV/EBITDA of 5.0x.

Six desalination plants will be offered up to the private sector in June. The six plants would be the first phase of the government’s plan to tender 21 plants in total.

Wathba Petroleum Services Company, 50% owned by CCAP, issued a tender for building six warehouses for the storage and trading of Petroleum products in East Cairo with investments worth USD60 million.

Egypt's iron and steel exports surged 65% YoY to USD2.33 billion in 2023.

Air Arabia is launching three weekly flights between Cairo and Istanbul starting 2 April 2024.

The FRA intends to grant Fawry Microfinance the license for SMEs Financing within days, according to local press.