Market Overview 

Egypt has signed a USD 500 mn agreement to purchase wheat from Emirati agribusiness Al Dahra, over 5 years. The pact will see Egypt import USD 100 mn of milling wheat a year, with the Abu Dhabi Exports Office (ADEX) providing low-cost financing. 

Misr Life Insurance Company has launched the first USD Dollar denominated pension policy for Egyptians abroad, with installments between USD50-10,000.

The Egyptian Railways Authority is looking forward to collecting up to USD40 million per year from selling train tickets in dollars to foreign and Arab visitors.

ORHD (FV: EGP20.38, OW) achieved stellar 2Q23 sales of EGP4.7 billion, up 78.1% y/y and 72.0% q/q, bringing 1H23 sales up 59.9% y/y to EGP7.5 billion. Net profit in 2Q23 increased 59.1% y/y and 99.7% q/q to EGP582.0 million, bringing 1H23 net profit up 11.1% y/y to EGP873.5 million. 

Regarding OCDI’s (FV: EGP23.30, OW) acquisition of the 180 feddan land plot directly south of its North Coast project, Caesar, in May 2023, the company disclosed that the cost of the land plot is EGP534.0 million, or EGP706/sqm.

EFID (FV: EGP22.80, OW) released 2Q23 net profit after minority interest of EGP406 mn (+125.7% YoY, +1.9% QoQ). 1H23 net profit recorded EGP805 mn (+135.1% YoY). EFID is trading at a FY23 P/E of 8.6x and an EV/EBITDA of 5.8x.

Prime Minister Moustafa Madbouly said yesterday that the government is working to speed up raw materials shipment to EAST to ease the shortage of cigarettes.

GBCO (FV: EGP10.55, OW) released 2Q23 consolidated attributable net profit of EGP501 mn (+2.4% YoY, +365.2% QoQ). The auto side recorded a bottom-line of EGP249 mn due to the absence of the huge FX losses. GB Capital’s net profit recorded EGP253 mn.  We upgrade our FV for GBCO to EGP10.55/share. GBCO is trading at a FY23 P/E of 5.0x and an EV/EBITDA of 4.8x.

MTIE (FV: EGP6.70, EW) reported 2Q23 attributable profit came in at EGP142 million (+53% YoY, -8% QoQ). This brings 1H2023 net attributable profit to EGP295 million (+105.4% YoY). Revenue growth (+39.5% YoY), Flat margins and FX gains shaped the results. We upgraded our FV of MTIE to EGP6.70. MTIE is trading at 2023f P/E of 11.6x and EV/EBITDA of 8.0x.

RACC reported 1H23 net attributable profit came in at EGP85.4 million (460.9% YoY), including FX gains of EGP39.8 million. RACC is currently trading at an annualized P/E of 3.6x.

MCQE reported 2Q23 consolidated financial results recording an attributable net loss of EGP22 million, bringing 1H23 bottom-line to EGP44 million (-18% YoY). Quarter losses is attributed to tight operating margins in addition to the inflated financing expenses to meet the Group’s needs of raw materials, energy. MCQE is trading at FY23 P/E of 18.2x and EV/EBITDA of 7.2x.

ARCC (FV: EGP9.94, OW) reported 2Q23 consolidated financial results with attributable net income recording EGP95 million (+57% YoY, -61% QoQ), bringing 1H23 bottom-line to EGP337 million (+182% YoY). Healthy revenue growth, that was mainly price driven, and lower forex losses drove bottom-line annually, despite tighter margins and higher interest expenses. Sequentially, Ramadan and Eid seasonality coupled with lower exports and almost stable selling prices drove margins and bottom-line down. ARCC is trading at FY23 P/E of 4.8x and EV/EBITDA of 1.8x.

EXPA (FV: EGP20.0, OW) 2Q23 consolidated bottom line recorded EGP694 million, pre-minority interest and appropriations, (+23% q/q, +117% y/y). 1H23 bottom line reached EGP1,258 million (+102% y/y). EXPA is trading at P/E23 of 3.9x and P/B23 of 0.6x.

EGBE (FV: USD0.50, OW) 2Q23 standalone net profit pre-appropriations recorded EGP341 million (+61% y/y, +8% q/q), Net income recorded EGP658 million (+61% y/y). EGBE is currently trading at P/E23 of 4.8x and P/B23 of 0.6x, on ROAE of 13.6%.

SAUD (FV: EGP15.00, OW) 2Q23 net profit recorded EGP576 million (+39% y/y,+22% q/q). SAUD 1H23 net profit recorded EGP1.0 bil

Market Overview 

A number of US Democratic lawmakers have joined a group of senators in calling on the Biden administration to withhold a quarter of Egypt’s annual USD 1.3 bn of military aid on human rights grounds.

ADQ-owned food company Agthia is no longer looking to acquire military-owned bottled drinks firm Safi,

Egyptian men living abroad will be able to begin the process of settling any outstanding military service obligations today and until one month.

Egyptian expats who have registered in the expat car import initiative will have to complete their payments within a month for import approvals.

A number of draft laws that aimed at encouraging foreign ownership of real estate will soon be sent to the cabinet.

The government is studying importing wheat from Romania under a barter system, in an attempt to secure its stock of grain and lift the pressure on the dollar.

The Economic Committee of the House of Representatives completed a study of amendments to the Capital Market Law with FRA to encourage higher investments in the capital market.

ETEL (FV: EGP34.00, OW) reported 2Q23 net profit came in at EGP2.88 billion in 2Q23 (+19.4% YoY, -24.3% QoQ), shaped by: healthy revenue growth, margin contraction, higher investment income from Vodafone of EGP1.07 billion (+47.2% YoY, +19.7% QoQ), and higher annual finance cost in 2Q23. During 1H23, net profit came in at EGP6.7 billion (+77.1% YoY). Telecom Egypt is currently trading at 2023e P/E of 4.2x and EV/Adjusted EBITDA of 2.7x.

EKHO (FV: USD1.86, OW) posted USD100 million in 1H23 net profit, declining 30% YoY compared to USD143.4 million in 1H22. Net profit recorded USD40 million in 2Q23, a decline of 45% YoY (-33% QoQ) compared to USD72.4 million in 2Q22 and USD60 million in 1Q22. Urea prices declined by 56% YoY in 1H23, and by 63% YoY (-20% QoQ) to average USD345/ton during 2Q23. EKHO is currently trading at 2023e PE of 6.0x and EV/EBITDA of 3.4x. We are still waiting for the release of full financials for more details.

India’s ReNew Power could break ground on its USD8 billion green hydrogen plant in the Suez Canal Economic Zone early next year. The Indian company and El Sewedy Electric signed a framework agreement with the government in November for the plant.

The first leg of the 1,100-km high-speed rail line will begin operating at the end of 2024 (ORAS, SWDY).

The National Authority for Tunnels extended the deadline for opening the envelopes of the Raml Tram in Alexandria to next month instead of this August. (ORAS)

TMGH (FV: EGP22.55, OW) achieved stellar 2Q23 results, with 2Q23 sales rising 248.7% y/y and 69.5% q/q to EGP20.7 billion, bringing 1H23 sales up 191.0% y/y to EGP32.9 billion. Net profit in 2Q23 grew 48.7% y/y and 8.7% q/q to EGP812.7 million, bringing 1H23 net profit up 40.3% y/y to EGP1.6 billion. We maintain our Overweight recommendation of TMGH based on our FV of EGP22.55/share.

OCDI (FV: EGP23.30, OW) completed the down payment to acquire the 180 feddan land plot it had announced in May 2023, located directly south of its North Coast project, Caesar, and received the contract for the land plot signed by the New Urban Communities Authority.

ADIB (FV: EGP35.00, OW) 2Q23 consolidated bottom line recorded EGP 1,161 million, pre-minority interest and appropriations, (+15% q/q, +103% y/y). 1H23 bottom line reached EGP2,168 million (+112% y/y). The bank is currently trading at annualized 1H23 multiples of 0.9x P/B23 and 2.8x P/E23.

HRHO is currently working on several mergers and acquisitions in Gulf countries including Saudi Arabia, United Arab Emirates, Kuwait, and Amman. 

The Central Bank of Egypt (CBE) has declined a request by the Federation of Egyptian Banks to bring back exemptions that would exclude their largest clients from credit concentration limits until December 2024. 

ISPH 2Q23 bottom line recorded EGP59.4 million in 2Q23 (+105.4% YoY,-18.1% QoQ). T

Market Overview 
SWDY 
SKPC
EGCH

Egypt’s annual urban rate of inflation inched up to 36.5% y-o-y in July, from 35.7% in June. On a monthly basis, inflation slowed for the second consecutive month, to 1.9% from 2.1% in June.

Core inflation — which strips out volatile items such as food and fuel — dipped to 40.7% y-o-y in July from June’s 41%. Monthly core inflation fell to 1.3% in July from 1.7% in June. 

In tandem with consensus expectations, S&P Global reported that it is predicting an FX adjustment in Egypt by September or October in tandem with the delayed IMF review.

Moody’s is extending its review of a potential downgrade for Egypt’s sovereign credit rating as it weighs progress on the government's reform agenda against evidence of weakening FX liquidity and the likelihood of further currency devaluation. 

Egypt’s budget deficit narrowed to 6.0% of GDP in FY22/23, below the expected 6.2%. The primary surplus reached 1.6% of GDP, up from 1.3% the year before. The debt-to-GDP ratio rose to 95.6% from 87.4% the year before, in line with expectations.

Total gas output in Egypt fell by 5% QoQ and 9% YoY in 2Q 2023 from the previous quarter to 5.88 bn cubic feet per day (cf/d).

The National Bank of Egypt and Misr Life Insurance intend to launch a USD-denominated pension plan for Egyptians abroad.

The CBE intends to offer this Tuesday treasury bills worth EUR600 million for one year.

The Export Development Fund is currently disbursing the second tranche of the sixth phase of the export rebate program, with total net rebates of EGP3.8 billion for 772 companies. (ORWE, DSCW)

Global oil demand reached an all-time high in June and could break records again this month amid rising consumption in China. The crude benchmark last week surpassed USD88/bbl for the first time since the end of January.

FWRY reported 2Q23 net income of EGP159.8 mn (5x YoY, 30% QoQ), leading to 1H23 net income of EGP283.1 mn (4x YoY), driven by solid margins and revenue growth from banking services. P/E is 35x for 2023.

Work related to the execution of the Dabaa nuclear power plant is progressing within the timeframe agreed upon with the Russian company and has not stopped, according to the Head of the Nuclear Power Plants Authority.

HRHO (FV: EGP18.31, OW) 2Q23 net profit after tax and minority interest recorded EGP405 million (-54% q/q, +20% y/y), bringing 1H23 net attributable profit to EGP1,290 million (+89% y/y). Annual performance was solely supported by aiBank profits, as IB platform profits showed limited growth on higher deferred taxes, coupled with lower non-banking financial services profits with higher expenses and provisions. HRHO is currently trading at P/E23 10.6x and P/B23 1.1x.

HDBK (FV: EGP 24.50, OW) released 2Q23 bottom line of EGP1,690 million (+28% q/q, +200% y/y) so that 1H23 bottom line reaches EGP3,015 million (+150% y/y). Annual and sequential performance was boosted by 1) robust margins, 2) strong non-interest income, 3) lower effective tax rate, and 4) sequentially lower provisions. HDBK is currently trading at 2023 P/E of 2.8x and P/B of 0.9x based on adjusted bottom-line growth of 83% in 2023.

OCDI (FV: EGP23.30, OW) plans to add 550 hotel rooms to its project portfolio, starting with 180 hotel rooms in North Coast project, June. OCDI also plans to deliver the first units in its North Coast project, June, in 3Q23.

According to local media, local investors are studying acquiring MHOT and are searching for a foreign investor to join their consortium.

SUGR (FV: EGP45.00, OW) released 2Q23 net profit of EGP765 mn (+64% YoY, +136% QoQ), leading to a 1H23 net profit of EGP1,088 mn (+100% YoY). The quarter recorded provisions of EGP200 mn along with investment expenses of EGP185 mn that brought down NPM to levels below that of its comparable periods despite the hike in gross profitability and EBITDA. SUGR is trading at a FY23 P/E of 5.2x and an EV/EBITDA of 3

Market Overview 


Prepared by: Mayada Amin - CETA, CFTe

The cabinet approved draft legislation to give properties unique digital IDs.

The cabinet also greenlit the suspension of the 14% agriculture land tax for an additional year starting from 1 August. The tax has been suspended since 2017.

The government approved two presidential decrees allowing Egypt to join the African Development Bank’s Africa50 for Project Development and Financinand Africa50 for Project Financing.

India’s Ocior Energy has inked preliminary contracts with the government to set up a USD4 billion green hydrogen plant in the Suez Canal Economic Zone (SCZone). 

Dana Gas expects to receive the Egyptian parliament’s approval on its gas exploration agreement with state-owned EGAS this year.

MNHD reported 2Q23 revenues in 2Q23 grew 22.3% y/y and 16.9% q/q to EGP1.2 billion, bringing 1H23 revenue up 23.4% y/y to EGP2.3 billion. Net profit in 2Q23 reached EGP275.9 million (+149.0% YoY, -9.4% QoQ), bringing 1H23 net profit up 151.0% y/y to EGP580.2 million. 

SPMD released 1Q23 consolidated financial results showing attributable net loss of EGP24.2 million compared to net loss of EGP38.4 million in 1Q22 and net loss of EGP53.3 million in 4Q22. Revenues came in at EGP15.8 million in 1Q23 (-76.9% YoY, +0.8% QoQ). SPMD is currently trading at 2023f P/E of 77.2x and EV/EBITDA of 16.1x.

FAIT has released 2Q23 consolidated financial indicators where the bottom-line recorded EGP2.89 bn (+43.2% y/y, +32% q/q). The strong expansion is mainly attributable to the strong top-line growth (+32.4% y/y, + 150% q/q). Additionally, it could be also related to non-interest income growth, lower provisions, and lower taxes.

Prime Holding’s asset management arm Prime Investments has appointed Mohamed Kotb as its new CEO and managing director. 

EAST's CEO expects the cigarettes market to stabilize within 2-3 months. The company highlighted that there were no price increases from their side since March 2023, and the prices rally in the market is driven by the merchants, according to local media.

A new company, Damietta Green Ammonia, was established virtually through the General Authority for Freezones and Investments’ (GAFI).

Travco Group plans to raise its hotel capacity by 18% to 20k rooms in the next two years.

Market Overview 



Prepared by: Mayada Amin - CETA, CFTe

The government plans to launch a new export subsidy program by the end of August or the beginning of September.

Non-petroleum exports decreased by 17% to record USD16 billion during the first half of the current year, compared to USD19.3 billion in the previous year.

Petroleum exports declined by 53%to USD3.7 billion in 5M2023, compared to USD7.9 billion in the same period of 2022.

The Ministry of Electricity targets increasing electricity production from EGP472 billion in the current fiscal year to EGP632 billion in FY25/26.

Moody’s downgraded the ratings of 10 smaller US banks and put six larger lenders on review for a potential downgrade as it warned of weak profitability and funding risks in the US banking sector

An unnamed foreign company has made an offer to the government to establish a green hydrogen plant in Egypt, according to a cabinet statement yesterday. The plant would be powered by 15 GW of solar energy and export USD1 billion (400k tons) of green hydrogen annually, all of it to Europe. A plot has already been chosen for the plant and the unnamed firm will now look to carry out feasibility studies.

JUFO (FV: EGP14.00, OW) released their 2Q23 results showing:
•Net profit recorded EGP218 mn (+24.7% YoY, -35.9% QoQ) with a margin of 5.8% versus 6.3% in 2Q22 and 9.9% in 1Q23. Despite the sequential decline in financing expenses, profitability was remarkably affected by weaker gross profitability caused by the inflation in raw materials.
•Revenues recorded EGP3,730 mn (+35.1% YoY, +9% QoQ).  The rise came supported by price increases rather than volumes, which witnessed a decline, where the dairy and juice segments experienced the majority of this decline, while the yogurt segment experienced a small decline, backed by Ramadan’s positive seasonality. 
•JUFO is currently trading at a FY23 P/E of 12.5x and an EV/EBITDA of 6.9x. 

Ethydco is planning to borrow USD250 million from Mashreq Bank in order to repay a USD denominated debt to local banks in 2024. 

Fawry Microfinance, a subsidiary of FWRY, has received preliminary approval from the FRA to add SME financing services.

ETRS will finalize its acquisition of 99.9% of NOSCO through a share swap in 4Q2023. The acquisition will result in ETRS shareholders holding a majority 70.17% stake in the merged entity, which will now be known as Egytrans NOSCO, while the remaining 29.83% ownership will be held by NOSCO shareholders. The acquisition will allow ETRS to expand its presence in the projects and land transport markets, bolster warehousing and fleet capacities, and tap into a large joint customer base.

HELI (FV: EGP12.44, OW) appointed Sameh Hammouda as its new Managing Director and CEO.

Midea Group launched its USD25 mn washing machine factory in China’s TEDA industrial zone in Ain Sokhna. The company expects to produce 1.5 mn washing machines each year at the factory, for export to the Middle East, Africa, the EU, and the US.

Egypt Sat Auto's CEO announced that the first Egyptian electric vehicle will be launched in the market by 1Q24 with two models at a price range of EGP100k-150k.