Pre-Trading Thoughts

The Prime Minister announced that an oil and gas field was discovered in the King Mariout area, called Fayoum 5.Egypt’s liquefied in facilities will start receiving 400 million cubic feet per day (mcf/d) from Cyprus’ Cronos gas field starting mid-2027 and another 500 mcf\d of gas from the country’s Aphrodite field by 2030, a senior government official said.Cabinet approved a draft decision put forth by Prime Minister Moustafa Madbouly defining the responsibilities of the Industry Ministry and its affiliated entities.Cabinet approved the establishment of a green industrial zone for petrochemical and green hydrogen production in the Gulf of Suez’s Ras Shukeir. It also gave an initial nod for the Transport Ministry to proceed with contracts for a green hydrogen and green ammonia project in Ras Shukeir in partnership with a consortium of international companies, the Red Sea Ports Authority, and the New and Renewable Energy Authority.The Finance Ministry allocated EGP1 billion in the current fiscal year’s budget to fund the Automotive Industry Development Program (AIDP) and attract investments in car manufacturing.Saudi Arabia’s Cabinet greenlit the Egypt-Saudi Agreement on Promotion and Mutual Protection of Investments that is expected to help protect Saudi investors as they ramp up investment in Egypt. Planning and International Cooperation Minister Rania Al Mashat said that the government expects growth to accelerate to 4.5% in FY2025-26, up from a 4.0% projection for FY2024-25.The Financial Regulatory Authority bumped up the limit on microinsurance coverage to EGP312.5k from EGP250k in a bid to safeguard low-income individuals and bolster their ability to invest in small businesses. The Environment and Finance Ministries are working to boost investments in waste-to-energy (WtE) projects by amending laws regulating public contracts and increasing the feed-in tariff rate.The number of factories in the Suez Canal Economic Zone (SCZone) has doubled to 130 over the past three years, with another 120 under construction.DOMT reported 4Q24 bottom line of EGP143.3 million (+41.1% YoY, -14.1% QoQ). This brought FY24 bottom line to EGP501 million (+10.3% YoY). DOMT’s BoD proposed cash dividend distribution of EGP0.85/share for FY24, implying payout ratio of 47.9% and dividend yield of 3.1%. DOMT is currently trading at FY25 P/E of 9.0x.SWDY will deliver 50% of the engineering works and supplies needed for the EUR700 million combined cycle power plant it is building in Hungary.