Al Ahly Pharos

*Key fundamental views for today*

STRATEGY| EGX30 should find support in potential US-China trade deal/India-Pakistan ceasefire/EG sovereign CDS compression

MACRO| There is room for 100-200 bps policy rate cut on 22 May post April inflation print

MACRO| USD/EGP 2025 outlook remains stable at 51-53 amid strong signs of commitment to IMF program

ARCC| Coal and sales mix to drive GPM expansion in 2025

SKPC| 1Q-25 results are almost flat y/y and 2Q results will likely remain so on flat HDPE. Time to accumulate as stock trades at low end of historic multiple

- Market Overview 

- BTFH

- PRCL 

- OIH

- CLHO

- prepared by: Mayada Amin- CETA, CFTe

Prime Minister Mostafa Madbouly stated that the fifth review of the IMF loan program will start within few days, according to local press.              

Egypt is committed to paying USD725 million to the IMF during the current month of May, and USD962 million in June, after paying USD1.56 billion during 4M2025.

The Madbouly government expects to raise USD4-5 bn from selling stakes in 11 state-owned companies during the fiscal year 2025-2026, as a part of its privatization program.

The government is putting together new incentive criteria and additional benefits for automakers participating in the Automotive Industry Development Program in a bid to boost local component rates to 65% from 45%. The revised incentive framework introduces a new methodology for calculating local component requirements and value-added metrics. The framework will be presented to Prime Minister Moustafa Madbouly before being submitted to President Abdel Fattah El Sisi for final approval.

The cabinet approved the official rollout of the Universal Health Ins. System in Aswan starting 1 July 2025. As part of the plan, non-emergency medical services will be suspended for uninsured individuals beginning 1 January 2026.

Egyptian Prime Minister Mostafa Madbouly said that Egypt is negotiating with Saudi Arabia on joint projects with the Egyptian private sector across different sectors.

Egypt and Greece signed a strategic partnership yesterday during President Abdel Fattah El Sisi’s visit to the country, according to an Ittihadiya statement. The two sides also inked agreements to boost cooperation in a number of fields.

The Madbouly government increased Exxon Mobil’s production share from the Masry and Cairo offshore concessions to 40%, up from 15%. The government also extended the concessions’ cost recovery period to seven years from five to encourage the company to increase its investments in Egypt’s energy sector.

Thirty Egyptian companies are considering establishing new factories in Morocco in the coming period, to boost joint investments between the two countries.

The Federal Reserve held interest rates steady on Wednesday but said the risks of higher inflation and unemployment had risen, further clouding the economic outlook as the U.S. central bank grapples with the impact of Trump administration tariff policies.

TMGH achieved impressive YTD sales of over EGP160.0 billion, up 127.0% y/y, driven by the launch of the second phase of SouthMed which generated sales of EGP70.0 billion in one day.

AMOC released 3Q24/25 unaudited financial indicators. Net profit surged to EGP463 million (+18% YoY, +158% QoQ) in 3Q24/25. Over 9M24/25, net profit inclined 5% YoY to EGP1.1 billion. AMOC is currently trading at a FY24/25e PE of 10.7x.

EGBE released key financial indicators with 1Q25 standalone bottom line recorded EGP781 million (+26% q/q, +45% y/y, and +14% higher than Al Ahly Pharos Estimates of EGP686 million). EGBE is currently trading at P/E25 of 2.6x and P/B25 of 0.6x. AGM approved the distribution of cash dividends of 0.59/share, which implies a payout ratio of 12% and DY of 3.7%.

- Market Overview 

- Prepared by: Mayada Amin- CETA, CFTe

*Key news articles for today*

Net International Reserves inched up to USD48.14 billion at the end of April, up from USD47.76 billion in March. The ascent is driven by a USD1 billion increase in the value of gold component of reserves, driving the reserves up, despite the lower value of foreign currencies which recorded USD34.32 billion down from USD35.14 billion in March.

Trump said the US would stop attacking the Houthis in Yemen, as Oman confirmed a "ceasefire" had been reached with the Iran-backed group for it to stop targeting shipping in the Red Sea.

The Finance Ministry is looking to collect some EGP722 mn from the incoming stamp tax on EGX transactions in the upcoming fiscal year, as part of a broader plan to collect some EGP 61 bn from stamp duties through various channels, a government source said. The draft law for the implementation of the stamp tax on EGX transactions is currently in its final stages of preparation ahead of being submitted to the House of Representatives for final approval, upon which it would replace the long-delayed capital gains tax on bourse transactions.

The Tourism Ministry is looking to secure some EGP200 mn to launch the second iteration of the subsidized loan program for hospitality players, Tourism Minister Sherif Fathy said.

The International Finance Corporation (IFC) plans to invest USD1 bn in Egypt’s agriculture and food industries during 2025, an IFC official said.

The IFC is seeking to secure USD600 million in financing for the Abydos 2 project, which will be the largest photovoltaic solar power plant in Egypt, equipped with a battery energy storage system, and cost exceeding USD750 million.

Egypt will host a delegation from the European Commission late in May to finalize negotiations to unlock a tranche of the EUR4 bn grant from the EU. 

Egypt is studying a plan to ramp up imports from Morocco to USD600 mn over the coming period to address the trade imbalance between the two countries.

Chevron will invest at least USD120 mn in a new exploration concession to explore for oil and gas in the West Star concession in the northeast Mediterranean.

OLFI released 1Q25 financial results, reporting net profit of EGP184 million (+17.2% YoY, -34.8% QoQ). OLFI is currently trading at FY25f P/E of 6.3x.

POUL has signed an exclusive licensing agreement with French firm Avril to manufacture and distribute the “Sanders” and “Golden Horse” brands in Egypt and the Gulf region. The partnership involves investments totaling EGP200 million, with projected annual sales volume reaching 9,000 tons.

Scatec has kicked off construction of its USD590 million, 1.1 GW Obelisk solar project with 200 MWh of battery energy storage in Nagaa Hammadi. The project will be fully operational in the second half of 2026. The project could cover up to 40% of EGAL’s electricity needs and save more than 15% of the company's electricity cost. 

- Market Overview 

- BTFH

- FWRY 

- ORAS

- TAQA

-  ELEC

- prepared by: Mayada Amin- CETA, CFTe

The CBE has released the Balance of Payment (BoP)'s performance report for 1HFY2024/25. Key points are: 1) The overall BoP recorded a deficit of USD503 million in 1HFY2024/25, and 2) The current account (CA) deficit has surged by 15% YoY to c. USD11.1 billion. 

A team from the International Monetary Fund will begin the fifth review of the Extended Fund Facility Arrangement in Cairo this week. Further details will be communicated at the conclusion of the mission,” IMF Press Officer Angham Al Shami said.

The headline PMI declined from 49.2 in March to 48.5 in April, which was the lowest reading in 2025 so far. The downturn was widely attributed to a weakening of demand at non-oil companies. Lower levels of activity and new work led non-oil companies to rein in purchases of inputs for a second month in a row. Input prices in the non-oil economy rose at their fastest pace in four months in April, however, output prices were unchanged.

A tranche of the EUR4 bn grant from the EU could land in state coffers within weeks, EU Ambassador to Cairo Angelina Eichhorst told MENA news agency. The financing, part of a broader EUR5 bn macro-financial assistance package agreed in March 2024, was approved by the European Parliament last month.

The Madbouly government has agreed with Italian energy player Eni to raise the purchase price of new natural gas from onshore areas by 60%, a government official said. The hike will apply to output from sites managed by Agiba — a JV between Eni subsidiary IEOC and the Egyptian General Petroleum Corporation (EGPC).

The state is considering a proposal to allow every family to purchase a residential unit with affordable mortgage terms, including a subsidized interest rate and a repayment period of eight years at most, according to a cabinet statement. The initial plan prohibits selling the properties for a certain period of time.

PHDC achieved remarkable 1Q25 sales of EGP80.2 billion, up 148.4% y/y from an already strong 1Q24 and up 286.4% q/q, putting PHDC on track to achieve its FY25 sales target of EGP200.0 billion, which would imply a 32.4% y/y increase.

EGAL reported 3Q24/25 KPIs. Net profit after tax of EGP2.5 billion in 3Q24/25 (+42% YoY, -19% QoQ), EGP9.9 billion in 9M24/25 (+89% YoY). Bottom line performance was shaped by relatively tight operating margins along with a foreign exchange loss of EGP813 million that hit the P&L in 3Q23/24.  EGAL is currently trading at FY24/25e P/E of 5.5x.

 SWDY has acquired a 60% stake in Thomaseen Services to expand into the oil and gas industry. The acquisition consists of Thomassen’s Middle East and Africa business unit, filters manufacturing, and its African business affiliate. 

CLHO stated in a press release that it secured all necessary approvals to increase its ownership in Cairo specialized hospital from 57% to 90% of the company's shares. 

ISPH cancelled its plan to transfer el sherouk Pharma hospital to its investment arm "AIM" due to obstacles in issuing the needed licenses and approvals. ISPH added that it plans to exit from the hospital within three years.

EFID BoD approved the sale of a production line and machinery, which have been previously imported by EFID, to Ahramat Al Nile for General Trade and Food Industries-limited liability, located in Iraq, with total amount of USD3.0 million. 

- Market Overview 

- CSAG

- ORWE

- ALCN

- ETEL

- Prepared by: Mayada Amin - CETA, CFTe 

*Key news articles for today*

Abu Dhabi wealth fund ADQ-owned AD Ports Group has inked a 50-year renewable usufruct agreement with the Suez Canal Economic Zone (SCZone) to develop and operate an industrial and logistics zone spanning 20 sqkm in East Port Said.

Net foreign assets in Egypt’s banking sector increased for the third consecutive month to USD15.04 billion in March, up c. 47.5% from February’s USD10.2 billion. Commercial banks recorded their first surplus since August; their net foreign assets came in at USD2.5 billion in March.

The government is preparing to unveil a revamped export subsidy program that will roughly double support rates across all sectors, introduce new incentives for branded exports, and prioritize higher value-added sectors. The framework is expected to be formally announced soon, come into effect on 1 July, and run through 2028.

The CBE has plans to issue a record EGP2.2 trillion in t-bills and bonds during the fourth quarter of the current fiscal year, marking a 9.7% q/q increase, to help cover the budget deficit. 

The government plans to purchase 8.5 million tons of wheat in the upcoming fiscal year, split between local and imported supply. That is around 300k tons more than FY24/25.

The government plans to implement a number of amendments and measures to increase the expected VAT proceeds during the next fiscal year, by including new sectors in the formal economy and applying the tax to entities previously exempted from it. This comes amid expectations of lower production costs and a further reduction in interest rates.  Sources told press that allowing banks to process customs imports after the official working hours without restrictions will expand the import and export base for investors, which will positively impact VAT revenue.

ABUK released 3Q24/25 unaudited financial indicators with net profit came of EGP3.3 billion (-59% YoY, +5% QoQ). This brought 9M24/25 bottom line to EGP7.8 billion (-36% YoY). ABUK is currently trading at FY24/25f PE of 5.0x.

EFIC released 1Q25 unaudited standalone results with net profit increasing by 32% YoY (-78% QoQ) to EGP208.9 million. EFIC is currently trading at FY25f PE of 5.2x.

ABUK subsidiary North Abu Qir for Agri-Nutrient Company’s Board of Directors approved the establishment of a new company under the name Khaleej Abu Qir for Agri-Nutrient as a private free zone company with an authorized capital of USD100 million and issued and paid-in capital of USD5 million. 

ABUK subsidiary Global Company for Methanol and its Derivatives’ general assembly approved the liquidation of the company, and the redemption of the shareholder shares in the company’s capital.

TMGH (FV: EGP75.00, OW) launched the second phase of SouthMed on the North Coast.

Weekly Commodities Update

|   | Last Price | WoW Change, %
| Brent, USD/bbl | 66.9 | -1.6%
| Diesel-HSFO Spread, USD/ton | 216.7 | 2.1%
| Egypt Urea, USD/ton | 392.5 | -0.6%
| Polyethylene, USD/ton | 940.0 | 0.0%
| Polypropylene, USD/ton | 990.0 | -0.5%
| LME Aluminum Cash Price, USD/ton | 2,396.3 | 2.9%
| LME Copper Cash Price, USD/ton | 9,376.4 | 2.4%
| Egyptian Retail Cement, EGP/ton | 3,527.0 | 0.1%
| Steam Coal FOB Newcastle Australia, USD/ton | 93.8 | -1.4%
| SMP, USD/MT | 2,795.0 | -2.8%

- Market Overview 

- HELI

- BTFH

- PHDC

- APSW

- ETEL

- Prepared by: Mayada Amin- CETA, CFTe