Pre-Trading Thoughts

Al Ahly Pharos

German companies are mulling several investments in Egypt, including:

• A EUR 1 billion direct reduced iron factory.
• A EUR 30 million flame-resistant material factory.
• A EUR 5 million first phase of a bicycle parts factory.
• Auto parts factory in Egypt.

China Glass Holding subsidiary CNG Egypt New Energy Glass kicked off construction work on a USD300 million glass factory.

The ro-ro shipping line connecting Damietta Port with Italy’s Port kicked off operations on Thursday with its first shipment setting sail.

Net foreign assets in the Egyptian banking system fell to USD9.2 billion by the end of October, down from USD10.31 billion in September.

The Cabinet approved the creation of a desert land development chamber under the Federation of Egyptian Industries.

MPs are set to discuss and vote on a draft cash-based subsidies bill today that aims to give cash-based subsidies to citizens under the poverty line without access to social insurance.

The CBE sold EGP47.0 billion worth of the bills, surpassing its EGP35.0 billion target, at 30.86%, 0.27% higher than their last auction.

Minister of Finance announced that Egypt is set to issue a sovereign sukuk denominated local currency. The issuance is scheduled for the first quarter of 2025.

Prime Minister said that the government will not repeat previous mistaken policies of keeping the exchange rate static on the assumption that a fixed rate demonstrates stability.

The Supreme Council for Investment is preparing to issue new decisions aimed at empowering the private sector in strategic projects that the government seeks to expand during the coming period.

Egypt has reopened fish exports to the EU after a three-year freeze.

We maintain our overweight recommendation of EKHO at a downgraded FV of USD1.19/share. Despite the outstanding risks represented in further currency depreciation and downward pressure on global prices or lag in local repricing, EKHO is exerting efforts to withstand such risks. EKHO is currently trading at a FY25f PE of 5.0x and EV/EBITDA of 3.7x.

EFIC released 3Q24 consolidated financial results. Net income grew 569% YoY (+49% QoQ) to EGP535 million, bringing 9M24 net income to EGP1.3 billion (+157% YoY). EFIC is currently trading at a 2025f PE of 7.3x and EV/EBITDA of 4.7x.

CANA has exited from investments in four entities worth EGP142 million.The total value of the bank's investment portfolio in September 2024 amounted to about EGP2.8 billion, compared to about EGP1.9 billion at the end of 2023.

HRHO’s commercial bank Bank NXT partnered with global payment solutions firm Mindgate Solutions to launch a new digital platform for corporate clients.

CICH and Compass received FRA approval to launch the C3 Capital Fund targeting EGP3 billion.

HRHO has finished its role in advising Maarif Education on its takeover of Ibn Khaldoun Education.

MNOs are set to launch eSIM cards before the end of 2024.