Pre-Trading Thoughts

Al Ahly Pharos

In line with our expectation, the MPC decided to keep the CBE’s overnight deposit rate, overnight lending rate, and the rate of the main operation unchanged.

The Ministry of Petroleum and Mineral Resources announced on Friday the third fuel price increase in 2024. However, prices of Mazut supplied to power plants and food industries have been kept unchanged.

The Prime Minister stated that fuel prices will continue shifting gradually until the end of 2025; however, this will be paused over the next six months.

Six international companies have shown interest in managing and operating airports being offered up by the state.

The government is looking to issue new sukuk and green bonds worth between EGP5-10 billion in 3Q-4Q of FY24-25.

S&P Global Ratings affirmed Egypt's B-/B rating and decided to keep the country’s long- and short-term sovereign credit rating outlook as positive.

The government has chosen to postpone the offering of stakes in the 545-MW Zafarana wind farm and the Beni Suef power plant to foreign investors.

Readymade garments manufacturer Akay for Readymade Garments is planning to gradually invest EGP1.5 billion over the next six years as part of its expansion agenda.

SKPC posted 3Q24 unaudited financial results. Net profit rose 10% YoY (flat QoQ) to EGP663 million in 3Q24. On a nine-month basis, net profit increased by 4% YoY to EGP1.89 billion. SKPC is currently trading at a 2025f PE of 5.2x and EV/EBITDA of 4.0x.

Canada-based oil and gas company TAG Oil secured a no-objection letter from the Egyptian General Petroleum Company (EGPC) for its binding proposal submitted in 2Q24 to acquire a 2k km concession in the Western Desert.

ECHEM is currently negotiating with banks over a USD700 million loan to finance the bioethanol project with USD100 million, soda ash project with USD350 million, and silicon project with USD250 million.

Tobacco distributor JTI-Nakhla has renewed a three-year contract with EAST to produce JTI’s products at EAST’s production facilities.

EAST plans to open letters of credit worth USD800 million over the next nine months.

EAST aims to produce 70 billion cigarettes in FY24/25, a significant increase from the 43 billion cigarettes produced in FY23/24.

DOMT BoD has decided to postpone granting Arla Food permission to conduct due diligence on the company. The delay is intended to seek further clarification on several points regarding the acquisition offer.

FWRY (FV: EGP13.00, OW) has announced the launch of its new medical insurance product, Sehetak Fawry, as part of its ongoing strategy to expand its financial services portfolio.

RAYA has received a binding offer from an unnamed bidder to acquire up to 49% of its 100%-owned subsidiary Raya Foods for USD40 million. The implied valuation of the 49% stake of Raya Foods translates to EGP0.45 per RAYA share.

RMDA is planning on investing EGP2 bn in the coming period to acquire new medicines. The company is in negotiations to acquire 10-15 new pharma products, with the acquisition coming as part of the company’s plan to expand its operations in the Egyptian market and boost exports.

The Administrative Capital for Urban Development postponed selecting a financial advisor to offer its shares on the EGX until 2H25.