Egyptian Banks| You are Hedged by Nominal Growth 

• The current macroeconomic environment is creating a perfect opportunity for banks' profitability. Balance sheets will expand with the weakness in local currency and high inflation. Treasury investments will present a good opportunity to park excess liquidity, and the high-interest rate environment will serve NIMs and push them higher.
• Banks have a high percentage of CASA deposits that will counterbalance the recently offered high-rate CDs and alleviate some pressure off of NIM. In addition, treasury rates are on the rise to cover for the higher cost of funds. 
• We believe that Egyptian banks are offering a good upside opportunity, especially after most stocks rallied over the last three months.
• Egyptian banks are delivering ROEs north of 20%, and most of them are trading below book values.
• Most banks that got acquired in Egypt recently witnessed transaction multiples that are double those seen amongst listed banks.
• It is notable that management who will be able to strike the perfect balance between margin gains and tax expense spikes will be able to achieve the highest gains from the current macro environment.
• Banks have been building excess provisions over the last 7 years, which limits downside risk from any asset quality issues.
• Based on current profitability trends, we believe those banks present the highest opportunity: ADIB, QNBA, CIEB, CANA, and SAUD, along with COMI of course which continues to be cheap on a P/E basis and much lower than its historical average.
•  Please check the table published today for detailed fair values and trading multiples.

• The IMF trimmed its 2023 global economic growth forecast by just 0.1 ppt to 2.8% and cautioned that sticky inflation and rapid policy tightening are presenting serious risks to the global economy. 
• The IMF now expects Egypt’s economic growth to slow to 3.7% this year, a 0.3 percentage point trim. 
• Suez Canal revenues rose 35% y-o-y in 1Q 2023 to USD 2.3 bn.
• The Madbouly government is working to incentivize Greek investments in Egypt through joint energy projects, as well as cooperation on renewables and green hydrogen. 
• The Japanese company Sumitomo, one of the world's largest manufacturers of automotive electrical harnesses, is investing USD100 million in Egypt.
• Jiangsu Guotai International Group aims to pump investments of USD50 million in Egypt in the field of ready-made garments, with aim to export 100% of its production to the European Union and the United States.
• The Ministry of Transport signed a cooperation protocol with the Spanish company Talgo, to establish a factory in Egypt, to manufacture railway passenger cars in Beni Suef Governorate.
• The Ministry of Finance rejected demands to reduce the real estate tax for hospitals, similar to the decision approved for industrial establishments.
• EGAL reduced selling prices in the local market by a range of EGP2k-14k per ton (excluding tax) during April. 
• HRHO has completed its exit from Oman, with aim to improve its return on equity. 
• HRHO has issued an EGP 250 mn senior unsecured short-term note for its brokerage arm to diversify funding sources.
• A consortium led by GB Auto acquired the initial FRA approval to launch "E'teman" for small and medium enterprises financing with an initial paid-in capital of EGP30 mn.
• AfricInvest is looking to acquire a 25% stake in the British University in Egypt with a total deal amount exceeding EGP1 bn. The deal is expected to be finalized by the upcoming June.
• FRA approved MTIE’s capital increase through 0.25 bonus shares for each original share, bringing issued and paid in capital to EGP749.3 million.
• Misr Technology Services (MTS), an associate of EFIH, plans to IPO on EGX next y