Al Ahly Pharos

Pre-Trading Thoughts

March 13, 2023 Al Ahly Pharos
Al Ahly Pharos
Pre-Trading Thoughts
Show Notes

US authorities announced they would guarantee all deposits in a bid to prevent a wider banking crisis. 

Silicon Valley Bank’s Failure May Lead to Smaller Fed Rate Hike, which will relieve the pressure off emerging markets.

CBE noted that there are no negative repercussions on the Egyptian banking sector, from the failure of the American Silicon Valley Bank, since Egyptian banks do not have any deposits, investments, or financial transactions with Silicon Valley.

The government will start preparing military-owned bottled drinks firm Safi and fuel retailer Wataniya for offering to strategic investors. 

FRA could within days create a central “lending pool” in cooperation with Citibank through which investors can engage in short selling. 

Egypt’s futures exchange is expected to launch in 6-8 months.

The cabinet estimated the value of imported goods stuck in ports due to foreign currency shortage at about USD3.9 billion. The value of goods released YTD adds up to c. USD8 billion. 

Egypt and Greece are selecting a consultant to prepare the feasibility study for the USD 4 billion electricity interconnection project between the two countries.

CICH (FV: EGP8.00, OW) recorded a net profit of EGP865 mn in 2022 (-43.4% y/y), despite the increase in revenues to EGP3.26 bn (+27.8% y/y). CICH is currently trading at PE23 of 6.2x and PB23 of 1.1x.

RAYA Holding reported net profit of EGP419.2 million in 2022, compared EGP541.3 million in 2021 (-22.5% YoY). Revenues came in EGP20.4 billion in 2022, up from EGP16.8 billion in 2021. 

RAYA’s assembly approved increasing Aman’s capital by EGP450 million to reach EGP1.06 billion and increasing Raya Trade’s capital from EGP420.8 million to EGP670.8 million to finance expansion.

According to Sawiris, OFH has transferred any deposits it held with any small US bank to JP Morgan and ML, after SVB failure. 

RACC reported 2022 net profit of EGP42.2 million in 2022 (+93.1% YoY), on strong revenue growth (+54.1%) and FX gains of EGP23.0 million. RACC is currently trading at an annualized 2023f P/E of 10.4x.

The Egyptian Electricity Transmission Company (EETC) signed a contract with SWDY’s subsidiary to construct an EGP660 million turnkey transformer station in Minya. 

EGTS’s (FV: EGP1.68, EW) court date for the 20.0 million sqm third phase Sahl Hasheesh land plot lawsuit is postponed to 6 May 2023.

Toronto-based firms Health Espresso and iCare Home Health plan to invest USD300-400 mn in the local health sector along with investors from Saudi Arabia.  

Weekly Commodities Update|   Last Price           WoW Change, %

Brent, USD/bbl  82.8      -3.6%

Diesel-HSFO Spread, USD/ton     425.0    -6.6%

LME Aluminum Cash Price, USD/ton        2,263.3 -4.1%

Egypt Urea, USD/ton      403.0    0.0%

Polyethylene, USD/ton  1,170.0 -0.8%

Polypropylene, USD/ton              1,055.0 0.5%

Steel/Iron Ore Spreads, USD/ton             514.2    0.0%

Egyptian Retail Cement, EGP/ton             1,880.0 0.9%

Steam Coal, USD/ton      185.3    -1.9%

Crude Palm Oil, USD/MT             914.0    -4.7%

SMP, USD/MT   2,769.0 -2.1%