It’s Rally Time: Our Top 5 Picks
COMI: The bank is well-capitalized and has always managed to maintain very strong margins above 5%, versus peers.
EFIH: The company has successfully managed to provide leading digital payment solutions across the nation by establishing and developing a digital financial network that forms the backbone of the Egyptian government’s digital transformation strategy.
ORWE: The ongoing currency deprecation is expected to reflect positively on export market sales value and, in turn, export rebates.
EKHO: Alexfert is well positioned to benefit from urea price increases. Sprea can flexibly adjust its selling prices to mirror global prices, and thus passing any increase in the feedstock prices to end customers. The company has expansion plans. A full year impact of these expansions will be reflected in FY23 results.
ORHD: Solid sales, exposure to increase in tourism, diversified revenue mix, sizable recurring income, large residual land bank, unique product offering, solid development track record, beneficiary of EGP depreciation on the asset side given land and units in El Gouna are priced in USD.
In a special meeting on 27 October, the CBE decided to hike policy rates by 200bps, to reach 13.25% and 14.25% for overnight deposit and overnight lending, respectively.
The CBE said it “moved to a durably flexible exchange rate regime, leaving the forces of supply and demand to determine the value of the EGP against other foreign currencies.” Following that, the EGP was trading at about 14% lower, reaching EGP23 per USD.
The Egyptian authorities have reached a staff-level agreement on comprehensive economic policies and reforms to be supported by a 46-month Extended Fund Facility (EFF) arrangement of USD3 billion. Plus, the Egyptian authorities have also requested financing under the Resilience and Sustainability Facility (RSF), which could unlock up to an additional USD1 billion for Egypt, in addition to financing of about USD5 billion from multilateral and regional partners.
The CBE announced it will begin the process of gradually repealing Letter No. 49 of 13 February 2022 that mandated the use of Letters of Credit for import finance, and the CBE will ensure the completion of removal by December 2022.
President has signed into law a bill that will allow Egyptian expats to import cars and get customs and tax exemptions after paying upfront in FX.
Suez Canal revenues rose 27% YoY in October, recording USD703.4 million.
President directed the government to grant a “golden license” to all investor applicants for three months, to facilitate procedures for establishing priority projects for the country.
The Russian Defense Ministry announced it would be suspending its participation in the grain deal.
TALM FY22 net income increased 24% YoY to EGP230 million.
AUTO announced selling 7.5% of their stake in MNT Investments, with total proceeds of USD60 mn, with an earnout component that could potentially lead to total proceeds of USD71.3 mn, should it come into effect. The transaction values MNT Investments at a total of USD800-951 mn, and AUTO’s remaining stake of 49.5% at USD396-471 mn.
According to local media, some car agents and companies decided to put a pause on selling their products amidst the fluctuations witnessed in the exchange rate. An industry expert is expecting a new wave of price increases in the upcoming period within 5-15% upon all car brands and models.
AMOC 1Q22/23 net profit registered EGP399 million (-13% QoQ ,+74% YoY).
EGAS signed a letter of intent with Shell, Pyramid Navigation, Infinity, and Eagle Gas to explore LNG bunkering. The Suez Canal Economic Zone wants to start providing bunkering services to ships from 1Q23.
ELSH reported an 89.7% y/y increase in 9M22 net profit to EGP140.8 million.
