Pre-Trading Thoughts

Prime Minister Mostafa Madbouly stated that the fifth review of the IMF loan program will start within few days, according to local press.              Egypt is committed to paying USD725 million to the IMF during the current month of May, and USD962 million in June, after paying USD1.56 billion during 4M2025.The Madbouly government expects to raise USD4-5 bn from selling stakes in 11 state-owned companies during the fiscal year 2025-2026, as a part of its privatization program.The government is putting together new incentive criteria and additional benefits for automakers participating in the Automotive Industry Development Program in a bid to boost local component rates to 65% from 45%. The revised incentive framework introduces a new methodology for calculating local component requirements and value-added metrics. The framework will be presented to Prime Minister Moustafa Madbouly before being submitted to President Abdel Fattah El Sisi for final approval.The cabinet approved the official rollout of the Universal Health Ins. System in Aswan starting 1 July 2025. As part of the plan, non-emergency medical services will be suspended for uninsured individuals beginning 1 January 2026.Egyptian Prime Minister Mostafa Madbouly said that Egypt is negotiating with Saudi Arabia on joint projects with the Egyptian private sector across different sectors.Egypt and Greece signed a strategic partnership yesterday during President Abdel Fattah El Sisi’s visit to the country, according to an Ittihadiya statement. The two sides also inked agreements to boost cooperation in a number of fields.The Madbouly government increased Exxon Mobil’s production share from the Masry and Cairo offshore concessions to 40%, up from 15%. The government also extended the concessions’ cost recovery period to seven years from five to encourage the company to increase its investments in Egypt’s energy sector.Thirty Egyptian companies are considering establishing new factories in Morocco in the coming period, to boost joint investments between the two countries.The Federal Reserve held interest rates steady on Wednesday but said the risks of higher inflation and unemployment had risen, further clouding the economic outlook as the U.S. central bank grapples with the impact of Trump administration tariff policies.TMGH achieved impressive YTD sales of over EGP160.0 billion, up 127.0% y/y, driven by the launch of the second phase of SouthMed which generated sales of EGP70.0 billion in one day.AMOC released 3Q24/25 unaudited financial indicators. Net profit surged to EGP463 million (+18% YoY, +158% QoQ) in 3Q24/25. Over 9M24/25, net profit inclined 5% YoY to EGP1.1 billion. AMOC is currently trading at a FY24/25e PE of 10.7x.EGBE released key financial indicators with 1Q25 standalone bottom line recorded EGP781 million (+26% q/q, +45% y/y, and +14% higher than Al Ahly Pharos Estimates of EGP686 million). EGBE is currently trading at P/E25 of 2.6x and P/B25 of 0.6x. AGM approved the distribution of cash dividends of 0.59/share, which implies a payout ratio of 12% and DY of 3.7%.