Pre-Trading Thoughts

Al Ahly Pharos

The UN Development Program (UNDP) estimates that the war in Gaza could cost Egypt’s economy between USD5.6 bn and USD19.8 bn throughout the current and upcoming fiscal years, depending on how far the conflict escalates, as Suez Canal and tourism revenues are expected to take a big hit, among other worries.

A government agency has asked some business organizations, including the Federation of Egyptian Industries, the Egyptian Federation of Investors Associations, and the Federation of Chambers of Commerce, to help them count and control the goods that fuel inflation rates.

The Prime Minister said that the government is seeking to develop a plan that links exports' financial support to doubling the local component every year under which exports' burdens refund will continue or increase, while weak local component percentage will lead to a great reduction in export support after 5 years.

Egypt will finalize the transfer of the land for the Ras El Hekma project to the newly established Ras El Hekma for Urban Development Project Company in the coming days.

Negotiations have started for Egypt to access USD 1.2 bn in long-term, low-cost climate financing from the IMF's Resilience and Sustainability Facility.

The Suez Canal Economic Zone (SCZone) has allocated land for two new projects worth a combined USD9.5 mn in China’s special economic zone TEDA.

USAID in Egypt intends to implement two programs at a cost ranging between USD50 and USD100 million, to improve economic resilience and flexibility.

The government is close to announcing the tourism sector incentives initiative, which is estimated at about EGP50 billion and aims to increase Egyptian hotel capacity and enhance the growth of the sector.

According to local press, ETEL withdrew plans to sell its stake in Vodafone Egypt. This has no impact on our EGP51.00 per share FV.

EFIH reported 1Q24 results. Net attributable profit recorded EGP463 million (+64.0% YoY, +286.6% QoQ). EFIH is currently trading at 2024f P/E of 30.4x and EV/EBITDA of 21.8x.

Basata e-payments plans to list around 25% of its shares on EGX in 18 months, according to local press.

Fitch Ratings has upgraded its outlook on four local banks, the National Bank of Egypt, Banque Misr, Banque du Caire, and COMI, taking their long-term debt outlook to positive from stable.

CNFN 1Q24 net income recorded EGP45 million (-67% y/y).

HRHO is planning to launch an investment fund for leasing with a paid in capital of EGP500 mn.

IDHC intends to delist its shares from EGX. All listed shares will be transferred to their primary market on the London Stock Exchange (LSE) if the extraordinary general assembly approves the voluntary delisting. Objecting shareholders can then sell their shares back to the company at the highest price of the following: 1) the highest closing share price on EGX during last month, 2) the highest close share price on LSE during last month, 3) the average closing price on EGX in the past three months, or 4) the average closing price on LSE in the past three months based on the average exchange rate in EGP during this period.

JUFO is distributing cash dividend of EGP0.20/share, implying a payout ratio of 18.4% and a DY of 1.3%. Record date is on 29 May 2024 and distribution date is on 3 June 2024.

DSCW is distributing cash dividend of EGP0.17/share, implying a payout ratio of 66.6% and a DY of 12.8%. Record date is on 2 June 2024 and distribution date is on 5 June 2024.