Abu Dhabi’s sovereign wealth fund ADQ has inked contracts with the Sovereign Fund of Egypt (SFE) to finalize its acquisition of minority stakes in three state-owned oil and petrochemical companies. The fund will pay USD 800 mn for the stakes.

The government will start receiving final offers to purchase Wataneya petroleum products sales and distribution stations affiliated with the NSPO next week. 

Net foreign assets in the banking sector (banks + CBE) went down in September to negative USD26.8 bn from negative USD25.9 bn the month prior.

Egypt's trade deficit declined in August by 22.3% YoY. This came mainly as a result of a 14% decline in the value of imports in August. 

State-owned China Development Bank (CDB) announced that it gave the Central Bank of Egypt CNY7 bn (c. USD957 mn) on 30 Octoberr.

Wintershall Dea has announced first gas from the ED2-X well in the East Damanhur block onshore Egypt. Currently, production from the well stands at ten million standard cubic feet per day.

Egypt cuts gas to urea factories due to the shutdown of Israel’s Tamar gas field, which was supplying around a third of Egypt’s natural gas imports. We contacted Urea producers:

• Kima has been at a complete halt of production since yesterday due to a lack of natural gas and is expected to remain at a halt for another week.Kima has stated in an official release that the natural gas supply cut will have a minimal impact on the company, thanks to the existing inventories.
• ABUK and MFPC stated that they didn’t receive any official decision regarding the feedstock reduction, however, both companies are undergoing scheduled maintenance in 4Q23, at least making use of the stop to finish the maintenance. 

AMOC released 1Q23/24 unaudited financial indicators posting an 18% YoY growth (+9% QoQ) in consolidated revenue. This was due to a 41% YoY increase (+10% QoQ) in EGP translated oil prices. Net profit grew by 6% YoY to EGP423 million in 1Q23/24, and compared to a net loss of EGP61 million in 4Q22/23. AMOC is currently trading at a 2023/2024e P/E of 7.9x.

ABUK (FV:EGP60.60, EW) issued its preliminary results for 1Q23/24.

• Net profit after taxes grew 20% QoQ but down 27% YoY. Net profit came lower than our estimates by 15%.
• Revenues came up 2% QoQ but down 10% YoY, almost in line our estimates.
• We have a neutral outlook for 2Q23/24 given that the company will have a scheduled maintenance the next quarter which will have a negative impact on the sales volumes.
• ABUK is currently trading at FY23/24 multiples of P/E of 7.1x.

In regard of the current natural gas shortage, and recalling similar previous events, we believe full-value chain steel producers, including ESRS, to operate normally, yet with changing their charge-mix towards using more scrap. Incase gas shortage persists,  this could partially pressure producers operating margins in the medium-term due to scrap's relatively higher production cost, assuming stable ex-factory prices. However, production should be stable in the short-term given the current DRI stock.

HELI (FV: EGP18.84, OW) signed the final contract to sell its 7.1 million sqm Heliopark land plot to the National Organization for Social Insurance for EGP15.0 billion to be paid as a lumpsum. 

CIRA Education has closed its second future flow issuance worth EGP700 mn. 

MHOT reported 1Q23/24 revenue of EGP300.4 million, up 87.9% y/y, and net profit of EGP190.0 million, up 49.9% y/y.