Al Ahly Pharos

Pre-Trading Thoughts

June 05, 2023 Al Ahly Pharos
Al Ahly Pharos
Pre-Trading Thoughts
Show Notes

Egypt’s PMI rose from 47.3 in April to 47.8 in May, the highest level since February 2022. 

Egypt targets increasing oil production by 11% to 650k bbl/day during 2023, with investments of foreign oil companies at USD 7.75 billion, +35% YoY. 

The government is in talks with strategic investors to sell a 49% stake in the Egyptian Drilling Company (EDC), aiming to complete the sale before the end of 3Q23.

Egyptian Linear Alkyl Benzene (Elab) will be listed on the EGX this month (40%). 

The EGX’s listing committee has approved the temporary listing of CCAP’s TAQA Arabia. We value Taqa at EGP4.6 billion. This translates into EGP3.44/TAQA share and EGP1.41/CCAP share. CCAP could be heading toward c.EGP3.30, without any conglomerate discount.  

In light of market speculation on the revival of QIA’s interest to acquire ETEL’s (partial/full) stake in Vodafone Egypt, we remind you that ETEL holds a 44.95% stake in VE (entire stake) and the deal options historically imply EGP28.70-32.60/ETEL share for the entire stake. It is important to note that these implied USD valuations are pre-devaluation, which might decrease now given that Vodafone cashflows are mostly denominated in EGP. 

STC is in negotiations to acquire a company operating in the field of information technology in Egypt.

FWRY renewed its partnership agreement with the United Nations World Food Program, to provide different financial and cash assistance solutions in Egypt.

The Arab African International Bank (AAIB) saw its profits increase 22% YoY in 1Q2023 to reach EGP1.22 bn, according to the bank’s standalone financial statements.

The winning consortium for establishing and operating the Tenth of Ramadan Dry Port will be announced by the end of June with investments of USD230 million.

Cigarette prices witnessed a rise in the past few days, especially the local brands, due to supply shortages created by retailers (not producers) to push retail selling prices higher, according to the local media.

Lecico UK (100% owned by LCSW) will increase its capital by GBP1.5 million through a rights issue. 

Weekly Commodities | Last Price           WoW Change, %

Brent, USD/bbl  76.1      -1.1%

Diesel-HSFO Spread, USD/ton     274.9    -4.9%

Egypt Urea, USD/ton      320.0    -12.7%

Polypropylene, USD/ton              967.5    -1.5%

Steel/Iron Ore Spreads, USD/ton             427.9    0.0%

Egyptian Retail Cement, EGP/ton             1,785.0 -1.1%

Steam Coal, USD/ton      131.0    -18.1%