Al Ahly Pharos

Pre-Trading Thoughts

March 21, 2024 Al Ahly Pharos
Al Ahly Pharos
Pre-Trading Thoughts
Show Notes

The Federal Reserve held steady on interest rates at the conclusion of its March meeting, and it’s sticking with its forecast for three interest rate cuts. 

The government has set up a ministerial committee that will select a consultant to manage, evaluate and market Sharm El Sheikh’s Ras Gamila development project. The committee is expected to make its choice next week.

The government’s fuel pricing committee is set to meet within a week to look into raising fuel prices, with high expectations of an increase in fuel prices.

Government sources said that the anticipated increases in Brent prices by summer 2024 requires increasing the estimate for the crude price in FY2024-25 budget to USD87 pb, up from the USD80 pb in the previous budget that was amended later to USD85.

The CBE decided to cancel the scheduled meeting of the MPC on Thursday, March 28th 2024, in light of the sufficiency of the special meeting of the Committee on Wednesday, March 6th 2024.

French glass and building materials manufacturer Saint-Gobain has laid the foundation stone for its third glass factory in Egypt with investments amounting EUR 175 mn in the Sokhna Industrial Zone.

The Ministry of Petroleum and Mineral Resources is preparing a shipment of liquefied natural gas for export to Europe before the end of this March.

“PSH” International Company, which owns the “Bosch” home appliances brand, is working to complete its factory in the 10th of Ramadan City in Egypt during Q4 2024, at an investment cost of EUR50 million euros.

ORAS reported its consolidated 4Q23 results, with net income attributable to shareholders decreased 21.5% YoY to USD 43.8 million in 4Q23, due to lower income from BESIX, and increased 39.7% YoY to USD 158.6 million in FY23. ORAS is currently trading at FY24e P/E of 10.6x and EV/EBITDA of 2.9x. 

HRHO (FV: EGP 25.20, OW) 4Q23 net profit after tax and minority interest recorded EGP 814 million (+106% q/q, +1% y/y) bringing FY23 net attributable profit to EGP 2,498 million (+39% y/y). We update our FV to EGP25.20/share on improved business performance and revaluation of USD cash position post EGP devaluation. HRHO is currently trading at P/E24 7.7x and P/B24 1.0x.

HRHO’s ValU launched a new prepaid card in cooperation with Visa. On another note, the company expects to launch its services in Jordan sometime between late 2024 and early 2025 and invest some USD 10 mn into its Jordan expansion.

The banking sector wrapped up 2023 with a slight decline in the capital adequacy ratio (CAR), with the metric hitting 18.6%, compared to the 19% recorded a year earlier.

MOPCO will distribute EGP2/share on 7 April 2024 for shareholders of record on 2 April 2024, implying a dividend yield of 3.9%.

According to local media, MASR (FV: EGP5.24, OW) 1) is considering obtaining bank facilities of over EGP5.0 billion in 2024, 2) aims to spend EGP10.0 billion on construction in 2024, compared to EGP7.0 billion in 2023, and 3) increased selling prices by 10.0% since the beginning of 2024.

Three feed factories decided to reduce their prices since the beginning of this week and recorded reduction rates from EGP600 to EGP1000.