Pre-Trading Thoughts

Al Ahly Pharos

The CBE's Monetary Policy Committee is meeting on Thursday 23rd May to decide on interest rates. We expect the CBE to keep rates unchanged in its upcoming meeting, as our forecasted inflation readings for the upcoming period suggest that there is a disinflation path that is expected to be maintained during most of the upcoming months of the year, gradually eroding the negative real interest rate area.

Egypt’s 5-year CDS rates fell during Friday trading to record 5.45%, the lowest level since last March.

The House Budget Committee approved a government-drafted bill that unlocks some EGP 320 bn, which would help the government increase spending on social support programs, reduce the impact of higher interest rates, support the float of the EGP, and manage rising wheat and oil prices.

Egypt aims to sell land and housing units in USD to Egyptians working abroad and foreigners at a value of USD6 billion in 2024.

UAE-based Electra Investment Holding has submitted a draft voluntary purchase offer for 24.5% stake in SWDY. Offer is for cash price of USD1.05/share. SWDY is currently trading at FY24 P/E of 8.2x and EV/EBITDA of 4.0x.

MFPC released 1Q24 unaudited financial indicators. Net profit increased by 95% YoY to EGP7.6 billion. due to the Egyptian Pound devaluation and booking FX gains. The comparative period results are the standalone ones, which are lower than the figures reported in the company's consolidated financials. MFPC is currently trading at a 2024e P/E of 14.6x and EV/EBITDA of 10.1x.

CCAP sent a release announcing the details of debt purchase after the FRA requirements and highlighting that it has enabled the participation in purchasing the external debt in Egyptian Pounds.

TAG Oil Ltd. has released initial production test results from its BED4-T100 horizontal well, showcasing impressive oil output. Located in the Badr Oil Field of Egypt’s Western Desert, the T100 well achieved a production rate of 800 barrels of oil per day (BOPD).

ISPH reported 1Q24 results. Net profit stood at EGP98.1 million (+35.3% YoY, +147.7% QoQ) in 1Q24. ISPH is trading at 2024f P/E of 13.5x and EV/EBITDA of 3.9x.

RACC reported 1Q24 results. Net profit came in at EGP109.7 million (+143.7% YoY).

GBCO announced yesterday the exclusive distributorship of the Jac & Foton Motors brands in Iraq, through its GQ subsidiary.

GB Logistics, an integrated division of GBCO, has launched a bonded warehouse services at its facility in Sadat City.

BTFH subsidiary Cash for Microfinance has signed a cooperation protocol with Italian consultant Microfinanza Italia to set up a EUR2.2 mn project aimed at empowering Egyptian entrepreneurs.

BINV is planning investments worth EGP3 billion within the healthcare and pharma sectors in addition to the food and beverages sector.

Weekly Commodities Update

| | Last Price | WoW Change, %
| Brent, USD/bbl | 84 | 1.4%
| Diesel-HSFO Spread, USD/ton | 300 | 4.3%
| Egypt Urea, USD/ton | 298 | -1.3%
| Polyethylene, USD/ton | 1,030 | 0.0%
| Polypropylene, USD/ton | 975 | 0.0%
| Iron Ore 65%, USD/ton | 134 | 1.1%
| Steel/Iron Ore Spreads, USD/ton | 376 | -2.0%
| LME Copper Cash Price, USD/ton | 10,598 | 7.1%
| LME Aluminum Cash Price, USD/ton | 2,560 | 3.1%
| Egyptia Retail Cement, EGP/ton | 2,054 | -0.2%
| Steam Coal FOB Newcastle Australia, USD/ton | 142 | -2.0%
| SMP, USD/MT | 2,551 | 0.0%
| Last price may vary week over week in some indices due to time difference