The USD has dropped almost 13% against a basket of currencies on the back of easing US inflation, which is increasing investor appetite for higher-yielding risk assets around the globe. (Reuters)

The cost of insuring Egypt's sovereign debt (CDS rates) declined, since the government announced the progress in the privatization program, to record 12.9% for the 5-year contracts, compared to 14.8%.

Foreign investments in treasury bills rose to EGP392.5 billion at the end of April 2023, adding USD 417 million. 

El Sisi and Abiy Ahmed agreed to try and find an agreement within four months to finally end the GERD dispute and reach a settlement that allows Ethiopia to generate electricity without jeopardizing Egypt’s water security.

French rail manufacturer Alstom plans to invest some EUR 300 mn in Egypt over the next three years to establish two factories to produce electrical systems and metro/monorail rolling stock.

The Asian Infrastructure Investment Bank (AIIB) will provide EUR 250 mn in financing for the redevelopment of the Abu Qir railway in Alexandria.

CCAP (FV: EGP2.80, EW) released 1Q23 results, posting an 84% YoY decline in net profit to record EGP73 million in 1Q23 compared to EGP469 million in 1Q22 restated net profit. ERC contributed 77% of the total revenues, while TAQA contributed 10%. CCAP recorded an FX gain of EGP351 million in 1Q23 compared to a restated FX loss of EGP38 million during 1Q22. CCAP is trading at a 2023 EV/EBITDA of 2.6x.

EKHO’s (FV: USD1.86, OW)  Sprea Misr inaugurated expansions with total investments worth EGP1.4 billion (USD46 million). The expansions include a sulfuric acid production plant which will produce 165k tons a year, 80% of which go to AlexFert. Sprea Misr. It also added six production lines including a formica sheets production line.

Pitch: If TAQA Soars, Buy NatEnergy. At EGP8.90/share, the implied multiples for TAQA are as follows: P/E 2023e of 18.1x and EV/EBITDA 2023e of 9.9x. If we apply those same multiples to NatEnergy, with the possibility that EKHO might decide to list NatEnergy, then NatEnergy's value will hit USD 0.57/EKHO share, which is higher than our DCF valuation of USD 0.36/EKHO share. Accordingly, the FV for EKHO will jump to USD 2.07/EGP 63.96 per share, up from our current FV of USD 1.86/EGP 57.47 per share. The company distributes USD dividends which are expected to at least reach 6 cents in 2023. EKHO’s share is currently trading at 2023e PE of 6.3x and EV/EBITDA of 3.6x.

OCDI (FV: EGP23.30, OW) AGM approved the sale of EDNC Building No. 1 (gross floor area of 6,876 sqm) in Eastown for EGP1.1 billion to BTFH.

PHDC (FV: EGP3.91, OW) is considering an EGP5.0 billion securitization over three years.

MNHD (FV: EGP3.16, EW) has concluded its acquisition of The real estate developer EgyCan for EGP195.0 million. 

RTVC is studying entering a co-development agreement on a 29.4 feddan land plot on the North Coast. Expected sales are EGP1.5 billion, and expected cost is EGP1.0 billion.

The New Urban Communities Authority is planning to issue a new EGP15.0 billion securitization end of 2023 or beginning of 2024. 

Cement factories have filed a request with the Egyptian Competition Authority (ECA) to extend the quota system that entails cement production cuts, since it is set to expire on 23 July.

A group of private equity firms, including Tana Africa, Lorax Capital Partners, and US-based Ultra Capital are bidding to acquire a 25% stake in state-owned e-payments player Al Ahly Momkn. 

Radisson Hotel Group will open a new 294-room hotel in Marsa Alam in 2025.

EgyptAir carried out its first flight to Manchester yesterday as part of five weekly flights between Cairo and Manchester.