Market Overview 


Prepared by: Mayada Amin- CETA, CFTe

Investment banks are expected to finish three days of calls with investors regarding a potential Sukuk issuance by Egypt tomorrow.

The Omani Investment Authority is looking for investment opportunities within the Egyptian market.

A number of local, Gulf, and European investors submitted offers to acquire stakes in Egypt's largest wind power plants in the regions of Jabal Al-Zayt and Al-Zafarana.

Egypt and Italy could sign MoUs on a 3-GW USD3.5 billion electricity interconnection project in June 2023.

TMGH 4Q22 sales reached EGP12.2 billion, up 151.0% y/y and 25.8% q/q, bringing FY22 sales to EGP33.2 billion, up 2.6% y/y. Net profit in 4Q22 reached EGP304.8 million, up 384.8% y/y and down 65.7% q/q, bringing FY22 net profit to EGP2.3 billion, up 30.8% y/y. The Board proposed the distribution of cash dividends of EGP0.193/share.

PHDC closed a EGP638.0 million securitized bond.

PRDC subsidiary, Rooya, is negotiating with banks to reschedule EGP3.7 billion in debt.

The National Authority for Tunnels received the final offers from three local and international consortia that qualified to compete to implement the Abu Qir metro project in Alexandria, with investments of c. EUR1.6 billion for a period of two years.

EXPA awaits the CBE's approval to distribute 6:1 bonus shares.

Chimera bought 30.5 mn shares of HRHO for EGP590.6 mn last week via its newly acquired local financial services BTFH. Chimera is also eyeing a piece of the privatization program through Beltone.

BINV received USD2.2 million in an additional amount in the sale of its entire stake in Total Egypt to ADNOC, bringing the total value of the deal from USD27.6 million to USD29.8 million.

The government wants to sell sizable minority stakes in two state-owned pharma companies (Chemical Industries Development Company and Misr Pharma) in the coming six months.

Chevron has requested permission from Shell to use its West Delta Deep Marine facilities on Egypt’s Mediterranean coast to process gas from Cyprus’ Aphrodite field.

Emirates is adding more flights between Dubai and Cairo starting 29 October 2023.

A parliament suggestion for the expat cars program would offer a 50% discount on the required deposit from expats resident in Gulf countries.

- Market Overview 
- COMI
- CCAP
- DOMT
- AMOC
- KABO
- EGAL

- prepared by: Mayada Amin- CETA, CFTe

Egypt aims to make its first sovereign sukuk sale as soon as next week. The issuance could be worth up to USD1.5 billion.

Demand for USD is unlikely to ease up until Ramadan as traders finish stocking imported essentials. Pressure will also arise in mid-April when dividend repatriation season begins.

Bloomberg reported that 12-month non-deliverable forwards eased 1.2% yesterday to 36.025 against the USD.

Unemployment dipped to 7.2% in 4Q22, down 0.2 percentage points from the July-September quarter.

Representatives of a number of Turkish companies met with Prime Minister Madbouly yesterday, where they discussed plans to invest a combined USD500 million to expand Egypt operations.

EAST 2Q22/23 net profit reached EGP2,025 mn (+53.1% YoY, +44.1% QoQ).

Poultry producers are being added to the list of 19 industries getting a three-year holiday from real estate taxes until the end of 2024.

Chipsy Food Industries launched a new USD20 million production line inside its factory in Sixth of October.

CNFN 4Q22 net profit increased by 38% y/y to EGP205 mn, bringing net profit up 21% y/y to EGP609 mn in 2022.

Adnoc Distribution has completed its acquisition of a 50% stake in fuel retailer TotalEnergies Egypt.

Egypt will boost its LNG exports to Europe in the long term. Egypt is aiming to increase its LNG exports by around 40% starting 2025, the majority of which will be earmarked to the European market.
 
The Egyptian General Petroleum Corporation signed a concession agreement with INA and Energean, allowing the two companies to begin exploratory drilling at their 50-50 East Bir El Nus concession in the Western Desert.

Global oil demand is set to increase by 2 million barrels per day this year, pushed up by growth in Chinese consumption.

The government yesterday launched three key bodies that will work to implement its national automotive strategy (Automotive Industry Development Program).

Authorities also signed framework agreements with local and global automakers (Stellantis, Nissan, and Al Mansour Automotive) on localizing their assembly operations.

El Sewedy Data Centers, a subsidiary of El Sewedy Capital, signed an MoU this week to build three data centers in Egypt.

Sedico Pharmaceutical started the trial operation of the first factory to produce oncology drugs in Egypt, at an investment cost of around EGP1 billion.

- Market Overview 
- EFIH
- BINV
- AMOC
- ESRS
- ORWE
- EGAL


- Prepared by: Mayada Amin - CETA, CFTe

Egypt’s external debt dropped by 0.5% q-o-q to just under USD 155.0 bn in 1Q FY 2022-2023 (from July-September 2022).. The figure is up some 12.8% y-o-y from 1Q FY 2021-2022. 

The government is considering launching a new export subsidy program at the start of the upcoming fiscal year. The state is also looking into adding new sectors to the subsidy program.

The Suez Canal Authority will raise fees for oil ships transiting the waterway from the beginning of April. Tankers carrying crude oil and petroleum products will pay a 25% surcharge as of 1 April, from 5% currently. While their empty counterparts will pay 15%. The surcharges are “temporary” and revised or scrapped based on global shipping conditions.
SCZone Chairman is in Tokyo to drum up investment in the zone from Japanese investors. Water treatment, desalination plants, and green fuel production were the focus of some of the talks. 
SCZone officials met with representatives from Malaysian palm oil giant Sime Darby in Cairo to discuss efforts to localize the palm oil industry.
The World Bank could finalize its development finance program with Egypt next month. which will likely extend for five years, on 21 March. 
PHAR released initial 2022 topline figures, with revenues approaching EGP4.0 billion, in line with our estimates of EGP3.95 billion.
Gulf investors showed interest in acquiring a stake in SKPC after the latter finalizes its acquisition on Ethydco.

TAQA Arabia expects the company’s IPO to take place during 2023. He added that TAQA’s investments are expected to reach USD32 billion during the period from 2023 till 2027.

Egypt signed five agreements with national and international companies to search for oil and gas and produce them in four regions in the Western Desert and North Sinai offshore in the Mediterranean.

Energean plans to invest USD350 million in its 100% owned Abu Qir concession this year. 

Oil Minister announced targeting producing 600k bbl/day of crude oil and 6.5 billion cubic feet of natural gas per day during 2023. He expects Narges reserves to reach 2-2.5 trillion cubic feet. He added that Egypt's LNG did not yet reach its maximum production capacity (21 billion cubic feet per day) and that establishing a third liquefaction station is still under study. 

The government’s expat car-for-FX scheme will likely remain open until mid-May after the House Planning and Budget Committee yesterday gave preliminary approval to amendments granting it a two-month extension.

Seif Thabet was reinstated as JUFO's CEO, vice-chairman, and board member representing Pharon Investment Limited, which owns a 52% stake in JUFO. While Mr Niels Thomsen (previous CEO) was appointed as managing director.

Riyad Bank and Al Rajhi Bank are looking to either fully acquire or buy a stake into state-owned United Bank. The banks would be looking to come on board as strategic investors, according to El Fiqi, who didn’t disclose how much of United Bank is up for sale. 

EFG Hermes’ second-largest shareholder, Ripplewood, has sold two thirds of its stake in a series of block transactions yesterday. The firm sold almost 92 mn shares at an average price of EGP 19.32 per share. Ripplewood’s holdings decreased from 11.7% to 3.9%. Abu Dhabi-based investment firm Chimera purchased a 2.62% stake in EFG Hermes. JS Holding Ltd purchased a 5.25% stake.

SWDY signed an MoU with Emirati firm Gulf Data Hub to invest USD2.1 billion to build three data center complexes in Egypt which together would form the African continent’s
Minister of Communication and Information Technology is concluding a detailed plan to start implementing the 5G technology.

ORHD (FV: EGP15.32, OW) signed a master agreement with the Egyptian authorities that includes many decisions you will find them in details in our "Pre Trading Thoughts" report.

- Market Overview 
- ORWE
- ADIB
- EMFD
- ESRS
- SKPC
- SUGR
- ALCN



- Prepared by: Mayada Amin- CETA, CFTe

*Key news articles for today*

IMF is optimistic about Egypt’s privatization program.

OPEC+ doesn’t plan to up production to cover the 500k-barrel-per-day production cut Moscow is implementing in retaliation for Western sanctions.

LNG production in 2023 is expected to stay flat at around 7.5 million tons, in line with 2022. Oil Minister added that maximum capacity for LNG exports could reach 12 million tons per annum by 2025.

We upgrade our FV for JUFO to EGP14.00/share. The upgrade is based upon: resilient market share across segments and healthy demand despite inflationary pressures, planned prices increase, and diversified product portfolio, especially in the dairy line). We expect JUFO’s revenues to grow with a 5yr CAGR of 20%. Net profit is expected to grow with a CAGR of 28.4%, supported by declining expenses/sales percentages and declining debt levels. Net income for 2023 is expected to record EGP959 mn (+46.5% YoY). JUFO is trading at FY2023 P/E of 10.3x and an EV/EBITDA of 5.7x.

We upgrade our FV for EAST to EGP24.72/share, our upgrade is backed by (relatively cheap inventory of raw materials, anticipated prices increase, and costs cutting initiatives). Revenues are expected to grow at a 5yr CAGR of 12%. Attributable net profit is expected to grow at a CAGR of 13% throughout our forecast period. FY22/23 net attributable profit is expected to reach EGP4,402 mn during FY22/23. EAST is currently trading at a FY22/23 P/E of 8.0x and an EV/EBITDA of 4.3x

Egyptian Chemical Industries -Kima reported net profit after taxes recorded EGP133 million (-36% YoY, -72% QoQ) 2Q22/23. Net profit after tax recorded EGP604 million (+82% YoY) in 1H22/23. EGCH is trading at FY23 P/E 9.7x and EV/EBITDA of 7.6x.

PACH’s bidders are still holding on their offers despite the news that PACH shall list additional part of its shares in the EGX.

The Egyptian government plans to offer 20% of its owned Helwan Fertilizers in its new IPO program.

Emirati firm Dana Gas wants to invest USD100 million in Egypt's oil and gas sector over the next two years.

Oil and gas giants Chevron, Shell, and Apache, and IBM signed agreements on lower carbon projects, crude exports, and digital transformation with the Oil Ministry and affiliated firms.

The Parliament greenlit seven bills that will allow the Oil Minister to contract companies for oil and gas explorations in the Mediterranean and the Western Desert.

CSAG released outstanding 2Q22/23 financial results. Bottom line came it at EGP223 million in 2Q22/23 (+597.6% YoY, +236.0% QoQ); this jump is mainly driven by the investment income of Portsaid Container & Cargo Handling Company and Damietta Container & Cargo Handling Company. 

COMI is seeking regulatory approval to issue financial instruments worth up to USD1 bn to finance the bank’s expansion. Moreover, the bank’s BOD has decided to begin the liquidation process for its fintech-focused VC arm C-Ventures this year.         

The National Authority for Tunnels of the Ministry of Transportation plans to pay EGP5 billion to construction companies executing the high-speed train in the coming few days.

MPs approved EUR250 mn loan from the French Development Agency (AFD) to upgrade the Allexandria-Abu Qir metro line.

The number of broadband internet subscribers stood at 11 mn in December 2022 (+10% YoY). Mobile internet subscribers rose to 71.5 mn in 2022 (+9% YoY).

- Market Overview 
- COMI



Prepared by: Mayada Amin - CETA, CFTe

EGX Head, the Financial Regulatory Authority, and central bank officials are visiting Saudi Arabia and the UAE to drum up interest as the state gears up for a number of potential IPOs this year.

COMI (FV: EGP 69.00, OW) 4Q22 net profit post minority recorded a robust EGP3.95 billion (-10% q/q, +17% y/y, and perfectly in line with our estimates), bringing FY22 net profit post minority to EGP16.11 billion (+21% y/y). The stock is trading at P/E 2023 of 9.4x and P/B 2023 of 2.0x, on an attributable basis.

ADIB (FV: EGP28.50, OW) 4Q22 consolidated bottom line recorded EGP 543 million, pre-minority interest and appropriations, (-4% q/q, +42% y/y), bringing FY22 bottom line to EGP 2,126 million (+47% y/y and 7.5% higher than Pharos estimates of EGP 1,978 million). The bank is currently trading at 1.0x P/B23 and 5.0x P/E23.

CIEB (FV: EGP13.00, OW) 4Q22 consolidated bottom line recorded EGP 816 million, pre-minority interest and appropriations, (+39% q/q, +90% y/y), bringing FY22 bottom line to EGP 2,418 million (+50% y/y and 25% higher than Pharos' estimates of EGP 1,950 million). The bank is currently trading at 1.2x P/B23 and 5.4x P/E23.

Al-Mal reported that the Arab African International Bank's government stake sale will be executed by offering a stake to a strategic investor, and another stake on the stock exchange. The bank achieved a net profit of USD243 million in 9M2022. and its valuation at EGP80-120 billion, based on P/E 22 multiple of 8-12x. 

We upgrade our FV for ORWE to EGP16.45/share, backed by: Recovery in the export value with the EGP devaluation, Disturbance in rival exporting countries bodes well for ORWE, leaving them with a larger market to serve, Price increases implemented for the local segment support margins. ORWE is currently trading at a FY23 P/E of 6.1x and an EV/EBITDA of 5.7x.

SWDY's subsidiary signed a cooperation protocol with Shahen for Electric Vehicle Solutions, to establish, operate and maintain electric vehicle charging stations for the next three years.

The state is planning to offer three international gas and oil exploration tenders this year.

 AMOC (FV: EGP10.80/share, OW) released detailed 2Q22/23 results showing a 240% YoY growth in consolidated net profit after minority interest, EGP592 million attributed to higher oil and oil products global prices as well as the Egyptian pound devaluation. AMOC is currently trading at FY22/23e PE of 4.5x and EV/EBITDA of 2.9x.

Weekly Commodities Update 

Brent, USD/bbl             86.4      8.1%

Polypropylene, USD/ton          1,055.0              2.9%

Polyethylene, USD/ton            1,140.0              1.8%

Egyptian Retail Cement, EGP/ton        1,950.0              1.6%

Crude Palm Oil, USD/MT         892.6   2.1%

LME Aluminum Cash Price, USD/ton  2,404.7              -5.1%

Steam Coal FOB Newcastle Australia, USD/ton              226.1   -4.2%

Diesel-HSFO Spread, USD/ton 455.1   -1.6%

Steel/Iron Ore Spreads, USD/ton        467.6   -1.0%

SMP, USD/MT 2,829.0              -0.5%

Egypt Urea, USD/ton  410.0   0.0%