The CBE's MPC is scheduled to meet on Thursday, 2nd November, to decide on interest rates. We expect the CBE to prefer to keep rates unchanged, until further notice, linking interest rate movement to any probable currency movement.

The Cabinet said that the country’s gas imports have fallen to zero from a previous 800 million cubic feet of gas per day, naming it as one of the main reasons for the worsening blackouts.

GAFI handed out four golden licenses yesterday to Samsung (which will invest USD55 million in its new mobile phone assembly facility), Fayoum Storage and Warehouses Company, and EgyptSat Auto.

Schneider Electric plans to inject EUR30 million into its Badr City factory until 2025.

Government sources said that customs proceeds increased by about 57% YoY during 1Q FY23/24, recording about EGP15.3 billion.

The parliament yesterday passed a government-drafted amendment to the VAT Act imposing an EGP0.50 VAT on all tobacco products. They also raised the price ceiling for all cigarettes packs, giving room for EAST to increase their selling prices, which is expected to happen soon. The amendment also gives room for selling prices to be raised by up to 12% annually for the next 5 years.

OCDI's (FV: EGP37.56, OW) 9M23 sales increased by 67.8% y/y to EGP19.8 billion. Revenues recorded EGP5.0 billion in 9M23, up 6.8% y/y despite deliveries decreasing 11.9% y/y to 743 units. Net profit in 9M23 increased by 26.3% y/y to EGP547.6 million. We raised our FV from EGP23.30/share to EGP37.56/share.

EKHO announced increasing its stake in AlexFert to 75.13% from 69.48% previously, through increasing its stake in Bawabet Al Kuwait Holding Company to 94.34% from 84.89% previously, for USD47.5 million.

EFIC (FV: EGP55.59, EW) issued standalone results for 9M23. Net profit came in at EGP234 million, compared to EGP293 million in 9M22, down 20% YoY. Top line registered EGP1.520 billion compared to EGP1.238 billion in 9M22, up by 23% YoY. EFIC is trading at FY24 multiples (based on consolidated estimates) of P/E of 5.7x and EV/EBITDA of 4.8x. 

Ministry of Trade and Industry approved a 10% increase in cement quota for local producers during November to fulfill increasing demand, according to local media.

The Kuwaiti sovereign wealth fund intends to acquire a share of ISPH through its investment arm in Egypt, Ekuity Holding, according to local media.

Travco has seen cancellations for reservations through the end of the year reach 50% due to the war in Gaza.

Accor plans to open seven new hotels in Egypt by 2027, adding 1.4k rooms to its portfolio.               

The Middle East Logistics and Consulting Group, the agent of the German company Eurogate, is scheduled to inject USD500 million in investments into the Tahya Misr 1 container terminal project in Damietta Port after taking over its operation, according to local press.

Weekly Commodities Update 

 |   | Last Price | WoW Change, %
| Brent, USD/bbl | 90.5 | -1.8%
| Diesel-HSFO Spread, USD/ton | 417 | -8.1%
| Egypt Urea, USD/ton | 385 | -4.1%
| Polyethylene, USD/ton | 1,040 | -1.0%
| Polypropylene, USD/ton | 955 | -1.3%
| Steel/Iron Ore Spreads, USD/ton | 337 | -1.0%
| LME Aluminum Cash Price, USD/ton | 2,206 | 2.3%
| Egyptian Retail Cement, EGP/ton | 2,210 | 10.2%
| Steam Coal FOB Newcastle Australia, USD/ton | 135 | -2.0%
| SMP, USD/MT | 2,659 | 3.9%
| Last price may vary week over week in some indices due to time difference

The CBE's MPC is scheduled to meet on Thursday, 2nd November, to decide on interest rates. We expect the CBE to prefer to keep rates unchanged, until further notice, linking interest rate movement to any probable currency movement.

The Cabinet said that the country’s gas imports have fallen to zero from a previous 800 million cubic feet of gas per day, naming it as one of the main reasons for the worsening blackouts.

GAFI handed out four golden licenses yesterday to Samsung (which will invest USD55 million in its new mobile phone assembly facility), Fayoum Storage and Warehouses Company, and EgyptSat Auto.

Schneider Electric plans to inject EUR30 million into its Badr City factory until 2025.

Government sources said that customs proceeds increased by about 57% YoY during 1Q FY23/24, recording about EGP15.3 billion.

The parliament yesterday passed a government-drafted amendment to the VAT Act imposing an EGP0.50 VAT on all tobacco products. They also raised the price ceiling for all cigarettes packs, giving room for EAST to increase their selling prices, which is expected to happen soon. The amendment also gives room for selling prices to be raised by up to 12% annually for the next 5 years.

OCDI's (FV: EGP37.56, OW) 9M23 sales increased by 67.8% y/y to EGP19.8 billion. Revenues recorded EGP5.0 billion in 9M23, up 6.8% y/y despite deliveries decreasing 11.9% y/y to 743 units. Net profit in 9M23 increased by 26.3% y/y to EGP547.6 million. We raised our FV from EGP23.30/share to EGP37.56/share. 

EKHO announced increasing its stake in AlexFert to 75.13% from 69.48% previously, through increasing its stake in Bawabet Al Kuwait Holding Company to 94.34% from 84.89% previously, for USD47.5 million.

EFIC (FV: EGP55.59, EW) issued standalone results for 9M23. Net profit came in at EGP234 million, compared to EGP293 million in 9M22, down 20% YoY. Top line registered EGP1.520 billion compared to EGP1.238 billion in 9M22, up by 23% YoY. EFIC is trading at FY24 multiples (based on consolidated estimates) of P/E of 5.7x and EV/EBITDA of 4.8x. 

Ministry of Trade and Industry approved a 10% increase in cement quota for local producers during November to fulfill increasing demand, according to local media.

The Kuwaiti sovereign wealth fund intends to acquire a share of ISPH through its investment arm in Egypt, Ekuity Holding, according to local media.

Travco has seen cancellations for reservations through the end of the year reach 50% due to the war in Gaza.

Accor plans to open seven new hotels in Egypt by 2027, adding 1.4k rooms to its portfolio.               

The Middle East Logistics and Consulting Group, the agent of the German company Eurogate, is scheduled to inject USD500 million in investments into the Tahya Misr 1 container terminal project in Damietta Port after taking over its operation, according to local press.

Weekly Commodities Update 

 |   | Last Price | WoW Change, %
| Brent, USD/bbl | 90.5 | -1.8%
| Diesel-HSFO Spread, USD/ton | 417 | -8.1%
| Egypt Urea, USD/ton | 385 | -4.1%
| Polyethylene, USD/ton | 1,040 | -1.0%
| Polypropylene, USD/ton | 955 | -1.3%
| Steel/Iron Ore Spreads, USD/ton | 337 | -1.0%
| LME Aluminum Cash Price, USD/ton | 2,206 | 2.3%
| Egyptian Retail Cement, EGP/ton | 2,210 | 10.2%
| Steam Coal FOB Newcastle Australia, USD/ton | 135 | -2.0%
| SMP, USD/MT | 2,659 | 3.9%
| Last price may vary week over week in some indices due to time difference

Market Overview 

The CBE has eased its restrictions on credit card use abroad. The new rules require users to provide proof that the card was used while abroad.

The CBE’s Monetary Policy Committee will meet on Thursday to review rates.

The government is drafting legislation that would introduce a carbon tax. 

The Planning Ministry said that private-sector firms will have to pay their employees a gross wage of at least EGP3.5k/month from January, up from EGP3k currently. 

The EU may include the plan to link the power grids of Greece and Egypt on a list of “projects of mutual interest” which would help the project secure licensing and funding.

In an initiative to stimulate local industry, the state is ready to support factory construction projects by building the core structure of factories for companies to then fit with their own production lines.

Eni expects to resume LNG exports from Egypt when seasonal demand eases even as Israel’s war in Gaza curbs our imports of Israeli gas.

China Energy will start working on feasibility studies for a 2-GW pumped hydroelectric energy storage plant under an MoU inked with the Electricity Ministry. 

Citigroup thinks that Egypt’s geopolitical importance and an accelerating privatization program mean it is worth taking a punt on Egypt’s USD-denominated debt.

Egypt paid USD17.8 billion in debt installments and interest payments during the 9-month period from July 2022 to March 2023. External debt balance reached USD165.3 billion in March 2023, a 6.2% increase compared to June 2022.

Egypt’s sovereign debt insurance cost for 5-year maturity contracts declined to 17.5% on Thursday, from 18.8% last Wednesday. One-year maturity contracts insurance cost declined to 15.7% from 20.3%.

EGAL general assembly approved an amended cash dividend distribution of EGP6.50/share instead of previously proposed EGP1.00/share for FY22/23, implying a dividend yield of 9.7% and a payout ratio of 74.7%. 

We adjusted MCQE’s FV to EGP15.18/share from EGP20.17/share, taking into account the new number of shares of 96 million shares, instead of the previous 72 million shares, post the 1:3 free shares distribution, effective last Thursday.

CCAP sent a release regarding the listing of CCAP’s subsidiary, National Printing. CCAP has a long-term plan to list a number of its subsidiaries. The timing of any listing is subject to getting the necessary regulatory approvals and the existence of favorable market conditions to go ahead with it. CCAP’s subsidiaries in the energy sector are always looking for suitable investments to expand their businesses, particularly in the renewable energy sectors.

TALM released its FY22/23 financial results showing a bottom line of EGP299 million, a YoY growth of 30%.

The Bahraini group GFH is looking to acquire an Egyptian educational group as part of its interest in the educational, logistical, and healthcare sectors, according to local media.

ZMID sold seven industrial land plots amounting to 9,982 sqm for EGP130.0 million, implying EGP13,023/sqm and EGP0.25/share.

Air Cairo is running 21 weekly flights between Moscow, Yekaterinburg, and St. Petersburg and Sharm El Sheikh and Hurghada.

Market Overview 
COMI
HRHO
ASCM
CLHO 
EAST 
HELI 
MTIE
PHDC



Prepared by: Mayada Amin- CETA, CFTe

Market Overview 

PHDC
HRHO
ORWE
DSCW
EFIC
EMFD
HELI


prepared by: Mayada Amin- CETA, CFTe

The war in Gaza will negatively impact the economies of neighboring countries, including Egypt, Jordan, and Lebanon, according to the Managing Director of the International Monetary Fund (IMF).

Plane ticket purchases to Egypt, Jordan, and Lebanon have plummeted since the start of the war in Gaza, according to travel analysis firm ForwardKeys.

The EBRD is considering making a USD40 million equity investment in a new USD350 million North Africa-focused fund set up by SPE Capital.

The General Authority for Investment and Freezones (GAFI) will sign contracts with Samsung, EnviroProcess, Gasco, and Fayoum Company for Storage and Warehouses to receive golden licenses.

1.South Korean electronics giant Samsung intends to invest USD50 million in its new mobile phone factory at its industrial complex in Beni Suef.
2.Local company Fayoum Company for Storage and Warehouses will receive a license to work on a EGP1.3 billion project to establish new strategic warehouses in Fayoum.
3.Local EV manufacturer EgyptSat Auto is getting a golden license to build a EGP300 million factory.
4.The state-owned Egyptian Natural Gas Company (GASCO) will invest USD380 million to expand its gas complex in Alexandria.
5.EnviroProcess will establish a EGP73.5 million recycling plant for alternative fuels and fibers in Minya.

The New Development Bank, established by the BRICS group of emerging economies, is seeking its inaugural syndicated loan of USD1.25 billion with a three-year tenor. The bank aims to use the loan for infrastructure and renewable energy financing in member states Brazil, India, China, and South Africa, as well as Egypt and Bangladesh.

Egypt's exports of LNG fell to USD2.2 billion in the first 7 months of 2023, a decrease of 60% compared to the same period in 2022, which recorded exports of USD5.6 billion.

CCAP targets offering the National Company for Printing and Packing in EGX by the end of 2023. CCAP also targets injecting EGP2-3 billion in new and renewable energy sector investments in Egypt.

Global demand for oil, coal, and natural gas will peak this decade as the shift towards renewables and electric vehicles helps wean the world off fossil fuels. On the other hand, the OPEC published its 2023 World Oil Outlook earlier, where it upped its long-term oil demand outlook to 116 million b/d by 2045, a 5% jump from its 2022 forecast.

The Agricultural Committee at the Egyptian Senate suggested new repricing for the natural gas and electricity sourced to fertilizers companies to support Egyptian producers amid the severe competition they face in the global market.

EMFD (FV: EGP5.01, OW) is in talks to buy high-rise towers in New Alamein City on the North Coast.

Strategic investors interested in acquiring shares in CBE-owned lender United Bank have begun due diligence. Several international financial institutions are reportedly interested in acquiring shares in the lender, including the local units of Mashreq, Crédit Agricole, and the National Bank of Kuwait as well as international financial investors.

S&P Global has downgraded the long-term credit ratings of three local banks a few days after it cut its rating on Egypt’s sovereign debt. National Bank of Egypt, Banque du Caire, and COMI all had their credit ratings downgraded to B- from B. The rating agency also revised its outlook to stable from negative, pointing to the possibility of the government delivering on structural reforms.

According to local media, GBCO's Drive Finance will reportedly close a EGP600 million securitization issuance, while One Finance is planning a EGP530 million issuance within the next month. 

Market Overview 
COMI
HRHO
SWDY
ABUK

Prepared by: Mayada Amin - CFTe, CETA

The CBE could receive another USD5 bn in deposits from the UAE and Saudi Arabia to top up its foreign reserves. The funds will likely be converted into investments over several years.

Egypt aspires to attract USD25 billion in FDI within 5 years, with a goal of attracting foreign investments of about USD12 billion during the current FY2023/24.

Xinxing Cathay International Group wants to scale back investment in steel plant in the SCZone, investing USD 1.08 bn in two factories. 

The government wants to extend customs exemptions designed to encourage Egyptians to bring gold into the country by an additional six months when the current scheme expires on 11 November.

The coming period will witness debt swap agreements with several lenders to Egypt, with the aim of reducing the government’s external debt burden, in the footsteps of the debt swap agreement that was signed with China, sources said.

The Suez Canal Authority signed a joint cooperation memorandum with Qatari dairy producer Baladna that will see USD1.5 bn invested into establishing a dairy farm. Baladna will also cultivate 280k acres in the New Valley Governorate. Baladna is the second highest shareholder in JUFO with a 15% stake.

Al Safy group denied taking any official step towards acquiring military-owned bottled water company Safi or offering any bids.

EAST's CEO expects the gap between supply and demand in the cigarettes market, which is nearly 10%, to vanish within 3 weeks, supported by the company's increase in production, reaching more than 1 billion cigarettes weekly. He also mentioned that the 50% prices increase witnessed recently is not due to the supply shortage but are rather due to merchants' greed.

According to local media, the consortium including TMGH's (FV: EGP22.55, OW) 82% owned hospitality arm, ICON, that is acquiring a stake in the hotels company that has the seven historic hotels, also includes Emirati company, ADNEC Group, which is owned by ADQ. Media reported that the acquisition is expected to take place within days. According to media, ICON did a capital increase to EGP10.0 billion financed through its credit balances.

According to JLL, hotel occupancy rate in Cairo in August 2023 reached 68%, up from 61% in August 2022.

PHAR disclosed that they didn't receive any official offer from Mediterrania Capital to invest in PHAR through capital increase.

PHAR guides for 2023 revenues to exceed EGP4.8 billion, in-line with our estimates of EGP4.9 billion, in conjunction with a plan to reduce production cost. The company plans to export 20-25% of its biosimilar factory’s production when it starts inaugurating in 1H24.

The EDA signed a number of cooperation protocols between the Saudi Pharma City Company and a group of Egyptian companies. The cooperation protocols aim to support trade exchange and joint integration between the two countries and enhance the access of Egyptian drugs to the Saudi market.

EGPC plans to increase crude oil imports by 40% starting FY24/25 to reduce refined petroleum products imports.

GB Auto, the auto arm of GBCO is expecting to launch the first locally assembled Changan car by the fourth quarter of 2024.

The government wants to secure as much as USD3 bn in fresh debt financing by the end of the fiscal year, this is set to include:

• USD 1.5 bn from a range of financial institutions;
• USD 500 mn from Deutsche Bank and the Arab Banking Corporation;
• The equivalent of USD 500 mn from the recently-closed panda bond;
• Another USD 500 mn from an upcoming samurai bond.

Egypt's 5-year CDS rate rose to 18.82% on Wednesday, two days before S&P credit rating review for the country, increasing 1.8% compared to 11 October levels.

Chinese cable manufacturer Hengtong will invest USD18 mn to expand its factory in the TEDA zone under an agreement signed yesterday at the Belt and Road Forum, the Suez Canal Economic Zone.

Intro Group subsidiary Intro Sustainable Resources will work with Siemens to build 300 MW of combined heat and power (CHP) plants in Egypt and the region by 2030.

The government is considering issuing green bonds worth USD700 million through one of the Ministry of Electricity's affiliated entities, for launching a green project for the benefit of the private sector or in partnership with it.

Egypt will study at a later stage the issuance of sustainability bonds and social bonds, so that it diversifies its debt market instruments to attract foreign investors.

EGBE (FV: USD0.55, OW) released 3Q23 standalone financial indicators implying net profit after taxes of EGP388 mn (+81% y/y,+13.8% q/q), partially driven by the growth in the top-line, along with a probable growth in non-interest income and decline in provisioning. EGBE is currently trading at annualized P/E23 of 3.7x, P/B23 of 0.7x.

A consortium of seven banks are arranging a syndicated loan for TAQA worth EGP3 billion, to finance the purchase of Wataniya fuel stations. 

Cheiron Petroleum, Egypt’s largest independent energy company, will invest some USD160 million in natural gas exploration and production in the West El Burullus concession.

The Arab Organization for Industrialization signed an MoU with Gama Construction to study the implementation of a Petrochemicals complex in Egypt.

AXPH (FV: EGP169.46, EW) declared a cash dividend of EGP13.00/share (DY 9.3%, DPO 52%) for FY22/23. Distribution date is November 15, 2023. Record date is November 12, 2023. 

DSCW's shareholders have until 15 November to respond to The Toma family’s bid to acquire an additional 46.9% starting today. The offered price is EGP0.65 per share. DSCW is currently trading at a FY24 PE of 2.9x and an EV/EBITDA of 3.2x.