Al Ahly Pharos

Pre-Trading Thoughts

February 05, 2024 Al Ahly Pharos
Al Ahly Pharos
Pre-Trading Thoughts
Show Notes

Egypt's PMI recorded 48.1 in January, down from 48.5 in December.

The government has formed a committee to look into reducing the long list of taxes, customs, and fees imposed on goods and services.

The EGP strengthened slightly against the greenback for the second day in a row to reach 56-55 against the USD in the parallel market, compared to the EGP70 rate.

The government has prepared a list of sites in 11 cities it plans to offer to investors to establish public freezones in a bid to attract foreign direct investments and boost exports.

Minister of Agriculture announced that agricultural exports achieved an unprecedented boom in 2023 of about USD9 billion.

EAST (FV: EGP36.68, OW) released 2Q23/24 financial indicators. Net profit recorded EGP1,773 mn (-12.4% YoY, +57.8% QoQ). EAST is currently trading at a FY24 P/E of 6.4x and an EV/EBITDA of 5.3x.

SKPC, Ethydco, and GASCO are studying the possibility of importing 600k tons of ethane gas annually to reach the factories' maximum capacity before 2028. 

Middle East Oil Refinery (MIDOR) targets finalizing its refinery expansions to increase production capacity by 60% during 2Q24. The project's cost reached USD2.7 billion to produce 3 million tons of high-quality petroleum products every year. 

AXPH released 2Q23/24 financial indicators showing net profit of EGP79.6 million in 2Q23/24 (+107.6% YoY, +34.6% QoQ). AXPH is currently trading at 23/24f P/E of 7.0x and EV/EBITDA of 4.2x. 

Drugmakers will meet next week with the Egyptian Drug Authority (EDA) to request hiking their prices. Drugmakers want to increase prices by 30-50% in response to ongoing FX and raw materials shortages and higher shipping costs.

Bahraini flag carrier, Gulf Air, is launching direct flights to Alexandria and Sharm El Sheikh in June 2024.

Weekly Commodities Update

 |   | Last Price | WoW Change, %
| Brent, USD/bbl | 77.30 | -7.40%
| Diesel-HSFO Spread, USD/ton | 398 | -4.50%
| Egypt Urea, USD/ton | 405 | 3.80%
| Polyethylene, USD/ton | 1,050 | 0.00%
| Polypropylene, USD/ton | 955 | 0.50%
| Steel/Iron Ore Spreads, USD/ton | 386 | 1.00%
| LME Aluminum Cash Price, USD/ton | 2,196 | -1.90%
| Egyptian Retail Cement, EGP/ton | 2,154 | 0.80%
| Steam Coal FOB Newcastle Australia, USD/ton | 117 | -8.10%
| SMP, USD/MT | 2,638 | 1.00%
| Last price may vary week over week in some indices due to time difference