Pre-Trading Thoughts

Al Ahly Pharos

El Sisi appointed 13 new ministers in a cabinet shake-up. Key changes: CIB’s retail banking chief, Ahmed Issa, replaces Khaled El Anany at the Tourism Ministry, while Nevine Gamea will make way for Rep. Ahmed Saleh, who had headed the House Economic Affairs Committee. Cairo Glass Chairman Mahmoud Esmat has been named the new public enterprises' minister, replacing Hisham Tawfik.

CBE deputy governor Gamal Negm: Egypt’s foreign currency shortfall narrowed to USD 400 mn in July from USD 3.9 bn in February due to the central bank’s move to restrict imports, eliminating the need for “a significant reduction” in the exchange rate. Tarek Amer has no plans to step down before his second term ends in November 2023.

President Abdel Fattah El Sisi appointed Walid Gamal El Din as chair of the Suez Canal Economic Zone for a one-year term.

Qatar Investment Authority is in talks with the Sovereign Fund of Egypt (SFE) to purchase stakes in several Egyptian companies including Fawry, e-Finance, AMOC, and MFPC.

PIF is interested in an equity stake in Egypt Aluminum (EGAL) and the new hotels company. ADQ reportedly wants to buy another 10-15% in Mopco (MFPC).

Egypt is in talks with regional and international banks to borrow USD 2.5 bn amid mounting economic headwinds. First Abu Dhabi Bank (FAB) and Abu Dhabi Commercial Bank (ADCB) are reportedly arranging the loan.

The government has prepared a program to implement seawater desalination projects with the participation of the private sector, and it is scheduled to invite interested investors to submit applications until September 22nd. Egypt's sovereign fund is set to be a partner with a stake ranging between 10% and 25% in each project.

Ethiopia has completed the third filling of its USD 4.2 bn Grand Ethiopian Renaissance Dam.

Cabinet has approved measures announced by Prime Minister Moustafa Madbouly last week to limit the country’s use of electricity, raise natural gas exports, and increase inflows of foreign currency.

The Tourism Promotion Authority contracted with the American advertising company “McCann” to implement a promotional campaign for Egypt for a period of 3 years.

The total spending on medical services provided to comprehensive health insurance beneficiaries amounted to EGP4.6 billion in FY21/22, noting that EGP1.58 billion were funded by Public Authority for Healthcare, and EGP3 billion by the state's fiscal budget.

ADIB announced that due to the success of the first capital increase through a rights issue, the remaining EGP 1.0 bn, to reach the min. required capital of EGP5.0 billion will be financed through a second round of rights issue with details to be announced in due course.

ATLC released 2Q22 standalone financial results where net profit recorded EGP89.4 million (+243% q/q, +301% y/y). Quarter profits were boosted by one-off securitization profits pre-tax of EGP88.9 million. 1H22 net profit reached EGP155.5 million (+20% y/y), BoD called for an EGM on 4th of September to discuss its proposal to increase the company’s paid-in capital by EGP150 million from EGP287 million to EGP437 million, implying 60 million new shares at a par value of EGP2.50/share, through a rights issue. ATLC is currently trading at 0.9x P/B22 and 3.9x P/E22.

EGBE 2Q22 standalone net profit pre-appropriations recorded EGP212 million (+7% y/y, +22% q/q). EGBE is currently trading at P/E22 of 4.6x and P/B22 of 0.5x.

SAUD 2Q22 net profit recorded EGP414 million (+12% y/y, +18% q/q), bringing 1H22 to EGP 783 million (+26% y/y). SAUD trading at P/B22 of 0.5x and P/E22 of 2.4x, with ROAE of 20%.

EMFD submitted an offer to El Mostakbal for Urban Development to develop El Mostakbal's 1,000 feddan land plot in East Cairo through a revenue share system; negotiations are still ongoing with the option of land acquisition on the table.

PACH's BoD d