The government is set to announce measures to curb food price inflation today.

House committees signed off on key bills: the second round of the expat car import scheme, the decision to allow Abu Dhabi Ports to develop Safaga Port, and the cut to income tax proposed by the President last month. 

New rules announced by the Financial Regulatory Authority are making it easier for EGX-listed companies to perform share buybacks on the open market; changes include removing the requirement to notify the FRA three days in advance and allowing treasury stock trading on the open market instead of the special operations market (OPR).

COMI will no longer allow clients to make FX-denominated purchases or withdrawals using debit cards linked to EGP accounts.

BTFH has partnered with Italian financial services firm CRIF for unspecified cooperation in Egypt and the MENA region. BTFH will work with the firm to offer credit rating services, ESG scoring, and business information services.  

Customers of Turkish luxury department chain Beymen will be able to use ValU’s payments services under a partnership agreement signed by the two companies.

Islamic financial sector experts highlight that the demand on Islamic financing products has increased significantly over the last couple of years driven by the introduction of new products and increased global demand. 

EFID announced in a release yesterday the start of operations at its subsidiary, Edita Frozen Food Industries, with the launch of its newest brand, Molto Forni. 

AXPH is to distribute cash dividends of EGP13.0/share, implying DY of 9.1% and payout ratio of 52%.

ADCI is to distribute cash dividends of EGP4.5/share, implying DY of 7.5% and payout ratio of 32.6%.

ZMID is holding an auction on 25 October 2023 to sell seven industrial land plots ranging in size from 1,300 sqm to 1,630 sqm in Zahraa El Maadi.

AD Ports Group announced the signing of a concession agreement to develop, manage, and operate a multi-purpose port in Safaga in Egypt, in addition to signing two 15-year agreements, an MoU, and three Head of Terms (HoT) concerning ports located in Egypt’s Red Sea region and the Mediterranean Sea, enabling a major expansion of the Group’s activities into Egypt. 

A contract was signed between the Red Sea Ports Authority and the alliance of CSAG and the Suez Automated Shipping and Unloading Company to manage and operate two cargo storage yards in Safaga Port, with 80% of net revenues going to the General Authority for Red Sea Ports and 20% to the alliance, distributed as follows: 70% to CSAG and 30% to Suez Automated Shipping and Unloading Company.

Weekly Commodities Update 

 |   | Last Price | WoW Change, %
| Brent, USD/bbl | 84.6 | -11.3%
| Diesel-HSFO Spread, USD/ton | 391 | -11.9%
| Egypt Urea, USD/ton | 440 | 4.1%
| Polyethylene, USD/ton | 1,070 | 0.0%
| Polypropylene, USD/ton | 968 | 0.0%
| Steel/Iron Ore Spreads, USD/ton | 363 | 1.0%
| LME Aluminum Cash Price, USD/ton | 2,205 | -5.4%
| Egyptian Retail Cement, EGP/ton | 1,970 | 0.0%
| Steam Coal FOB Newcastle Australia, USD/ton | 139 | -13.5%
| SMP, USD/MT | 2,400 | 5.0%
| Last price may vary week over week in some indices due to time difference

Pitch: We published this morning our earnings expectations for companies under coverage in 3Q23/FY23.

CBE released balance of payments data for FY2022/23. 

Moody’s downgraded Egypt’s credit rating from B3 to Caa1, changing the outlook from negative to stable.

Egypt needs to move forward with another currency devaluation or it will “bleed” reserves, IMF Managing Director said.

CAPMAS is expected to release inflation data for September on Tuesday, 10 October. We expect urban annual inflation to approach 39% YoY as food items continue to surge in September.

Egypt’s net international reserves increased by USD42 million in September, recording USD34.97 billion, on higher level of foreign currencies.

Egypt's CDS rates rose only marginally during last Friday's trading, according to local press, with 5-year CDS rate recording 17.47% compared to 17.15%, despite Moody's downgrading Egypt's credit rating agency.

The World Bank has revised up its estimate for Egypt’s real GDP growth in FY2022/23 to 4.2% from 4%, but downgraded the country’s growth forecast for FY2023/24 to 3.7% percent from 4%.

The Minister of Petroleum expects Egypt’s imports of Israeli gas for export to rise by 30% during the coming period.

The Minister of Petroleum will finalize ADQ's acquisition of 25-30% of Elab, EDC, and Ethydco with a total value of USD800 million before the end of the year.

HELI (FV: EGP18.84, OW) AGM approved the National Organization for Social Insurance’s offer to buy HELI’s 7.1 million sqm Heliopark land plot for EGP15.0 billion to be paid as a lumpsum at contract signing, out of which around EGP2.0 billion will be deducted to increase building heights and convert hanging electricity cables to underground cables.

PHDC (FV: EGP4.35, OW) achieved impressive 3Q23 sales of EGP15.3 billion, up 124.0% y/y and 19.0% q/q, bringing 9M23 sales to EGP35.0 billion, up 99.6% y/y. PHDC’s strong 9M23 sales performance is already higher than our FY23 sales forecast of EGP31.7 billion assumed in our EGP4.35/share valuation.

PHDC (FV: EGP4.35, OW) is partnering with Hassam Allam Properties to develop 440 feddans on the North Coast in the Ras El Hekma area, with an expected combined investment cost of EGP120.0 billion, according to local media.

The Administrative Capital for Urban Development intends to appoint a global financial advisor to offer a 5-10% stake on the EGX in 1H24.

EGAL (FV: EGP53.58, OW) Board of Directors proposed a cash dividend distribution of EGP1.00/share for FY22/23, implying a dividend yield of 2.3%. 

EGAL (FV: EGP53.58, OW) reported FY22/23 and 4Q22/23 full financial results recording a net loss of EGP225.4 million during the quarter, down from positive earnings of EGP812.8 million in 4Q21/22 and EGP2.2 billion in 3Q22/23, bringing FY22/23 bottom-line to EGP3.7 billion (+48% YoY). EGAL is currently trading at FY23/24e P/E of 6.8x and EV/EBITDA of 5.2x. 

ISPH seeks to transfer ownership of Al-Shorouk Hospital, which it acquired last year, to its investment arm AIM before the end of this year.

The founder of ISPH, the Abdel-Gawad family, is reported innocent from the complaint filed against them by the Illegal Gains Agency, and the ban on their funds has been lifted.

The preliminary value of MoF’s 20% stake in Alex Bank amounts to USD150-175 million, according to local sources.

BTFH will increase its Minya-based microfinance subsidiary Cash’s capital base to reach EGP500 million.

Egypt signed a framework agreement on Wednesday with Maersk’s new green methanol company C2X to produce the green fuel in the Suez Canal Economic Zone. 

Egypt is in negotiations with three international companies to manufacture mobile phones locally. 

Market Overview 
EKHOA
ETEL
ADIB
EXPA
SWDY



Prepared by: Mayada Amin - CETA, CFTe

Market Overview 



Prepared by: Mayada Amin - CETA, CFTe

Morgan Stanley has downgraded Egypt's Sovereign credit from "neutral" to "dislike" on concerns about financing gap and high uncertainty.

The House Budget Committee will discuss two draft bills that would raise the income tax exemption threshold and double exceptional stimulus payments to public-sector workers and pensioners. The changes were among a list of measures announced by President El Sisi last month to alleviate the impact of the economic crisis on vulnerable households.

The EGX is in the process of completing procedures with financial regulators and brokerage companies to launch a derivatives market during 2024.

The Ministry of Finance intends to issue EGP-denominated Sukuk before the end of the current fiscal year to finance national projects. The value will be determined after assessing the intended projects.

The government is looking to sell 10-15% of its 22% stake in state-owned thermoplastic producer Egyptian Propylene and Polypropylene (EPP) to a foreign investor

PHDC (FV: EGP4.35, OW) acquired the 374 feddan land plot directly adjacent to the company's flagship district, Palm Hills October. The project will include residential units, commercial space, an extension to Palm Hills Sporting Club, and a hotel, with expected sales proceeds estimated at EGP85.0 billion. This is positive news given that the land plot is located next to mature projects which we expect could dictate a premium in selling prices.

OIH has finalized the sale of its subsidiaries, the real estate assets in Brazil, for a total of BRL90 million (approximately USD17.88 million). The company plans to utilize the proceeds in financing the company's investments in the tourism development and renewable energy sectors.

The Social Housing and Real Estate Support Fund and QNBA signed a cooperation protocol to provide mortgage financing to low- and middle-income citizens. 

Banque Misr is to launch an ESG green index fund in 1Q24 based on S&P’s sustainability index.

The government imposed a temporary ban on sales of sugar to traders by both private and state-owned companies. The decision was made as a way to curb soaring sugar prices. The Madbouly government will meet with sugar-packing companies and traders later today to negotiate new terms and requirements for trading of the commodity.

Accor Hotels is negotiating with the Ministry of Housing to acquire the rights to operate and manage three new hotels in different regions in Egypt during the coming years.

CSAG BoD approved increasing capital by EGP100 million to reach EGP300 million through issuing one share for every two original shares held.

Market Overview 
SWDY
HRHO
ETEL
ESRS


Prepared by: Mayada Amin- CETA, CFTe

The government plans to implement some structural reforms in FY2023/24, including amending law no.3/2005 regulating M&As, announcing the tax policy for the next five years, and preparing a unified vision for start-ups, preventing conflict of jurisdictions between different entities.

Egypt will likely have to spend USD29.2 billion on debt repayments in 2024, USD10 billion higher than our estimated bill in 2023 at USD19.3 billion.

GAFI could start to issue silver licenses for local startups in 4Q2023 to help ease administrative hurdles. 

OPEC+ ministerial panel will meet on 4 October, with no policy tweaks or recommendations expected.

Local importers are calling for tighter and wider-ranging restrictions on food export bans following the Trade Ministry’s three-month ban on the export of onions going into effect.

In a meeting between SCzone and local and international energy companies already operating in the country, 24 Japanese companies showed interest in investing in the zone, promoting investments in green fuels and renewable energy.

ABUK (FV: EGP60.60, EW) approved in its latest OGM the dividends distribution of EGP7.00 for FY22/23, to be distributed on three installments: EGP2.00 on 26 October 2023, EGP3.00 on 28 December 2023, and EGP2.00 on 31 January 2024. However, this last distribution depends on the cash position of the company then. It is noteworthy that dividend yield for FY22/23 amounts to 10.4% and payout ratio to 72.2%. 

HRHO’s consumer finance arm ValU has announced plans to launch in Jordan early 2024. ValU has excluded Saudi Arabia from its regional expansion plans due to market conditions and doubts over profitability.

ADIB’s micro-finance arm, Arzak, has received the FRA’s approval to issue its first products, Murabha and Musharka.

EAST (FV: EGP24.72, OW) decided that its previously announced dividends of EGP3.75 will be distributed over two tranches. The first tranche will be distributed on 28 October 2023 consisting of EGP2.00, while the second tranche consists of EGP1.75 to be distributed by December 2023. That entails a FY22/23 DPO of 109% (from the standalone earnings) and a DY of 16%.

EFID secured a USD45 million loan from IFC to finance growth locally and regionally. The facility will have a tenor of eight years with a two-year grace period.

ORWE (FV: EGP18.50, OW) BoD approved selling the company’s stake in National Bank of Kuwait Egypt of 0.7%, and focus on activities related to the core business and divesting non-core investments.

The Sovereign Fund of Egypt is preparing to list state-owned Midar (El Mostakbal Urban Development) on the EGX in 1H24. Midar is also reportedly negotiating to sell land to GCC investors, according to local media.

Weekly Commodities Update 

 |   | Last Price | WoW Change, %
| Brent, USD/bbl | 95.3 | 2.2%
| Diesel-HSFO Spread, USD/ton | 443 | 4.2%
| Egypt Urea, USD/ton | 423 | -1.7%
| Polyethylene, USD/ton | 1,070 | 0.0%
| Polypropylene, USD/ton | 968 | 2.1%
| Steel/Iron Ore Spreads, USD/ton | 359 | 1.0%
| LME Aluminum Cash Price, USD/ton | 2,331 | 5.9%
| Egyptian Retail Cement, EGP/ton | 1,970 | -0.8%
| Steam Coal FOB Newcastle Australia, USD/ton | 160 | 0.1%
| SMP, USD/MT | 2,400 | 5.0%
| Last price may vary week over week in some indices due to time difference

Market Overview 


Prepared by: Mayada Amin - CETA, CFTe

The central banks of the United Arab Emirates and Egypt agreed Thursday to a currency exchange deal. 

The Egyptian and Chinese central banks discussed a potential swap line during talks in Beijing last week, the CBE said Wednesday.

Global index provider FTSE Russell said on Thursday it will add Pakistan and Egypt to watch lists for possible demotion in its equity index suites. 

The President announced that Suez Canal revenues stand currently at USD10 billion and are expected to exceed USD10.5 billion by the end of 2023.

The budget deficit is expected to widen to 6.9% of GDP in the current fiscal year before narrowing to 4.7% by FY27/28, Finance Minister said.

GAFI's CEO said on Saturday that FDI inflows climbed 10% YoY in FY22/23. 

GAFI plans to apply tax incentives for new projects starting November.

GAFI is reducing the time needed for good customs release from 147 days to 14 days.

The Minister of Planning announced that Egypt targets an annual sustainable growth rate of 7-8%.

EBRD has cut its Egypt growth forecast for 2024 by 0.7% to 4.5%.

The government will end scheduled power cut starting 10 October, according to local press.

The Export-Import Bank of China is lending Egypt USD400 million to finance the third phase of the electric light rail train (LRT).

GASC has bought 170k tons of wheat in an international tender on Wednesday.

The Supply Ministry is working towards importing 200k tons of raw sugar in the coming months to maintain at least six months worth of supply in reserve.

Trial operations of the electricity connection between Egypt and Saudi Arabia will start by the end of May 2025.

We upgraded our FV to SUGR from a previous EGP45.0/share to EGP67.3/share with an Overweight recommendation. Our upgrade is mainly backed by the fast-paced rally in global sugar selling prices. SUGR’s financial performance is highly correlated to sugar prices and the exchange rate. We expect a 2023 DPO of 50% and a DY of 13%. SUGR is currently trading at a FY24 P/E of 6.8x and an EV/EBITDA of 3.9x.

The banking sector's net foreign assets deficit declined by USD360 million to reach USD25.9 billion last August.

MICH OGM held on 26 September 2023 approved:

• Dividends distribution for FY22/23 with a DPS of EGP3.00/share. Dividend yield amounts to 9.3% and payout ratio is 40.36%. 
• Distribution of stock dividends with a ratio of 1:2 along with the cash dividends. 
• Approval of initiating a new company for chlorine granules production in cooperation with Egyptian Chemical Industries Holding Company and Cadence for Energy and Consultancy Company. 

Kima's (FV: EGP7.48, EW) BoD issued a correction for FY22/23 results: top line new figure is EGP6.612 billion instead of the previously announced EGP6.611 billion. Net profit amended figure is EGP1.151 billion instead of EGP1.196 billion.

Oil output will likely remain unchanged amid an ongoing oil price rally when OPEC+ leaders meet on Wednesday. Brent crude closed at USD95.31/bbl last Friday. 

Oil Minister announced a plan to drill 110 exploratory oil and gas wells by 2030, with investments amounting to USD4.8 billion.

ETEL announced that Medusa Submarine Cable System (which will land in Port Said in 2025) will be connected to the Red Sea landing stations of Suez, Zafarana, and Ras Ghareb through Telecom Egypt’s extensive terrestrial crossing network.

SPMD released 2Q23 consolidated financial results showing attributable net loss of EGP24.8 million compared to net loss of EGP36.1 million in 2Q22 and net loss of EGP24.2 million in 1Q23. Revenues came in at EGP14.1 million in 2Q23 (-15.0% YoY, -10.9% QoQ).

RCare Fund is eyeing a new healthcare investment opportunity in Egypt, according to local press. 

Market Overview 


Prepared by: Mayada Amin - CETA, CFTe