Pre-Trading Thoughts

Al Ahly Pharos

The government is planning to offer up incentives to investors looking to invest in tourism projects that will wrap up construction before June 2026.

A source at the General Authority for Investment and Free Zones revealed that the Authority is in the process of establishing 4 environment-friendly investment zones by 2030, with investments of EGP5 billion.

The House gave final approval to the Unified Insurance Law, which will draw up new and comprehensive rules for regulating the Insurance industry and widen compulsory insurance coverage. They also approved a new bill allowing private investors to manage and operate public hospital and healthcare facilities and a government-drafted bill that unlocks an additional EGP320 bn for this fiscal year’s budget.

The government has extended customs breaks for twelve key goods for a further three months as part of its ongoing battle to lower the price of goods and reel in inflation.

A government official said that the Ministry of Petroleum has already started a plan to achieve self-sufficiency in fuel production, by increasing imports of crude oil from Kuwait, Saudi Arabia and Iraq and refining it in local refineries. The government aims to reduce the fuel import bill by USD495 million during 2Q2024 compared to the first quarter of the same year, falling to USD2.8 billion.

Inflation caused by global and regional crises is pushing up Egypt’s import bill by an extra USD 4 bn every month, Finance Minister said.

The government is considering the approval of the establishment of a new unit for clearing project and company dues to and from various government agencies.

The House gave approval to an EGP1.2 mn grant from the UN Population Fund to help the National Council for Human Rights implement its health and reproductive rights strategy in Egypt.

EFID reported solid 1Q24 financial results, showing: Net profit of EGP657 million (+24.6% YoY, +44.0% QoQ). The sequential margin improvement came backed by a decline in net interest expenses coupled with FX gains. EFID is currently trading at 2024f P/E of 8.7x.

EXPA 1Q24 consolidated bottom line recorded EGP1,087 million, post minority interest (-1% q/q, +95% y/y). Sequential growth was capped by growing opex, other provisions, and higher effective tax rate despite healthy margins, FX gains, and lower credit provisions. BoD proposed distributing 1:3 bonus shares financed from 2023 net profit. EXPA is currently trading at 3.2x P/E 2024.

Valu, HRHO’s subsidiary has raised EGP616.8 mn in securitized bonds, part of a EGP 9 bn securitization program.

Jordanian SME lender liwwa has secured USD5 mn loan from the US International Development Finance Corporation (DFC) which will be used for on-lending to SMEs in Jordan and supporting the company’s plan to launch in Egypt.

MASR launched Tajed, a commercial project spanning over 39k sqm in Taj City. On another note, MASR plans to invest EGP60.0-70.0 billion in its commercial portfolio over the next ten years and plans to acquire 400 feddans in the New Administrative Capital.

eTax, a subsidiary of EFIH, has signed a contract with the Real Estate Tax Authority for the implementation of the authority’s digitalization framework.

ORAS general assembly approved an annual cash dividend of USD0.20/share, bringing total cash dividend for FY23 to USD0.39/share. This implies a dividend yield of 7% and payout ratio of 27% for the year. This dividend is to be paid in August 2024.

Africa-focused renewables player Enara Group plans to dual list on the EGX and a Gulf exchange next year. Enara is building a 300k-ton green ammonia plant in Ain Sokhna with the French Total Energies.

Drive Finance, a subsidiary of GB Capital, the financial arm of GBCO, has announced the closure of its fifth securitization bond issuance worth EGP1.4 billion.