Pre-Trading Thoughts

UK's Actis has agreed with the Sovereign Fund of Egypt to purchase the Gabal El-Zeit station for USD350 million. The government has received five offers from investors interested in acquiring the 580-MW wind farm, Planning Minister said, without disclosing the names of the would-be investors.

The government agreed with the Gulf sovereign funds that invested in Egyptian companies that their profits from those companies would remain in Egypt for 3 years.

The government is launching a digital platform for environmental and climate investment. The platform will connect investors with green projects, linking entrepreneurs and developers with financiers, investors, and supporting institutions.

We raised our HELI FV to EGP18.84/share and maintain our Overweight recommendation, and raised our MASR FV to EGP5.24/share and upgraded our recommendation from Equalweight to Overweight, as a result of valuing the two companies' land plots using prices based on the offer submitted by the National Organization for Social Insurance to buy HELI's 7.1 million sqm Heliopark land plot for EGP15.0 billion.

The National Service Projects Organization (NSPO) has acquired minority stakes in three private-sector steel companies owned by Beshay Steel Group, sold up to 24% stakes in each of the three companies for around EGP10 billion. 

Global oil markets could face the largest supply shortfall in a decade in 4Q23 after Saudi Arabia and Russia extended production cuts until the end of the year. OPEC data suggests that markets will face a deficit of 3.3 million barrels a day next quarter.

DOMT (FV: EGP9.24, OW) clarified in a release yesterday that their ownership structure will not be affected by the sale of 24.61% of the company’s shares out of El-Damaty family’s shares to International Dairy Investment Company, as the latter is fully owned by El-Damaty family. The family still owns the same stake in Domty, through an indirect ownership. DOMT is currently trading at a FY23 P/E of 4.1x.
 
Banque Misr will launch an electronic payments company by the end of the year in partnership with the local arm of an Emirati telecom company. The telecom company will hold a stake of more than 60%, with the remaining stake held by Banque Misr.

The Micro, Small and Medium Enterprises Development Agency signed a new financing contract with Reefy Company for Microfinance Services worth EGP 150 million.

Egypt could provide incentives for pharmaceuticals raw materials manufacturing, according to local press.

The government is pushing back the tender for as many as four desalination plants on the north coast — as part of the government’s water desalination program — to December 2023, which was set to kick off in 3Q23, waiting on the land allocation process to be completed.