Al Ahly Pharos

Pre-Trading Thoughts

March 20, 2023 Al Ahly Pharos
Al Ahly Pharos
Pre-Trading Thoughts
Show Notes

-UBS will acquire Credit Suisse USD 3.25 bn in return for receiving up to CHF 100 bn in liquidity from the Swiss central bank.  

- Minister of Finance revealed draft state budget for FY23/24. It factors in 5% real GDP growth, a primary surplus of 2.5% of GDP, and an overall deficit of 6.37% of GDP. 

-El Sisi has directed the government to raise the personal income tax exemption threshold to EGP 36k from EGP 24k currently. 

-State-owned real estate companies El Nasr Housing and Development and Maadi for Development and Construction will attract investments from strategic investors through capital increases rather than selling stakes.  

-CLHO recorded net attributable profit of EGP78.8 million in 4Q22 (-31.7% YoY, -4.5% QoQ). For FY22, net attributable profit came in at EGP326 million (-15.9% YoY). CLHO reported revenues of EGP620 million in the first 9 weeks of 2023, an increase of 24% YoY.  CLHO is currently trading at 2023f P/E of 12.6x and EV/EBITDA of 6.8x.

-MNOs should receive NTRA’s approval for price increases within days, unless NTRA decided to keep prices unchanged.

-ESRS raised rebar prices by 9.7% or EGP2,850/ton to EGP32,135 (including VAT) as of March 20, 2023. Rebars price went up c.37% YTD. 

-Cement Chamber of Union addressed the Ministry of Industry to facilitate challenges facing cement producers and help expand producing different cement types like those in Europe and the US. 

-Government has received Emirati interest to participate in the development of EGAL led by Emirates Global Aluminium (EGA) in return for a stake in the company's capital increase.

-ADIB Egypt intends to focus on more aggressive growth over the next three years and will launch a digital consumer finance company and a microfinance company in 2H23. ADIB is trading at 2023 P/E of 2.87x and P/B of 0.6x.

-FAIT's 4Q22 net profit recorded an impressive EGP2,225 million (+89% y/y,+316% q/q) bringing FY22 net profit to EGP4,826 million (+60% y/y), supported by a one-off gain of EGP1,458 million booked in 4Q22 along with impairments reversals of EGP200 million. The stock is currently trading at P/B23 of 0.7x and P/E23 of 5.3x, with ROAE of 13%. 

-HRHO and GB Capital's Kaf Life Insurance has obtained a commercial life insurance license from FRA. 

-Pachin has 10 working days to respond to National Paints Holding’s (NPH) takeover bid after FRA yesterday approved the offer, which was for 75-100% at EGP34/share. 

-The winning consortia’s contribution to Containers handling in Ain Sokhna Port is: 50% for Hutchison Ports, 25% for CMI terminals, and 25% for COSCO.

-Weekly Commodities Update

Brent, USD/bbl            73.0     -11.9%

Diesel-HSFO Spread, USD/ton          412.0   -3.1%

Egypt Urea, USD/ton  377.5   -6.3%

Polyethylene, USD/ton           1,160.0            -0.9%

Polypropylene, USD/ton         1,040.0            -1.4%

Steel/Iron Ore Spreads, USD/ton       498.2   -2.0%

LME Aluminum Cash Price, USD/ton 2,226.5            -1.6%

Egyptian Retail Cement, EGP/ton      1,915.0            1.9%

Steam Coal, USD/ton 173.0   -6.6%

Crude Palm Oil, USD/MT       890.7   -3.3%

SMP, USD/MT            2,739.0            -1.1%