Pre-Trading Thoughts

Egypt's BoP recorded an overall surplus of USD1.9 billion in FY2020/21, compared to a deficit of USD8.6 billion last FYCurrent account deficit surged to USD18.4 billion, up from USD11.2 billion (+64% YoY)Trade deficit widened from USD36.5 billion in FY2019/20 (+15% YoY)Tourism revenues recorded USD4.9 billion in FY2020/21Net FDI recorded USD5.2 billion in FY2020/21 Remittances hit USD31.2 billion in FY2020/21Foreign portfolio investments saw a net inflow of USD18.7 billion in FY2020/21Egypt external debt jumped to USD137.8 billion in June 2021 (+11.6% YoY increase)Egypt's inclusion in JPMorgan’s emerging-market sovereign bond index could inject a total of USD1 billion into government treasuriesEl Sisi has called for a modernized, digitized ration card program (e-finance)Today is the last day of the e-finance retail subscription period.We upgrade our valuation for EKHO to USD2.03/share (up from USD1.61/share) or EGP31.95/share (up from EGP25.34; EKHO is trading at 2021e P/E of 8.6x and 2022f P/E of 7.7xBrent hits a three-year high with Brent futures at USD84.80/bbl (AMOC)Aluminum prices hit a record USD3,171/tonne (EGAL)OCDI signed a EGP1.57 billion long-term facility Land prices in touristic destinations range from USD54/sqm to USD60/sqm; ElGouna prices at c.USD160/sqmRussia will lift Covid restrictions on flights to Sharm El Sheikh and Hurghada starting 9 NovemberETRS decided not to proceed with the offer made by H.A Utilities Holding ETRS BoD agreed on a new land purchase for the establishment a new subsidiary for cars storage in El Ain El Sokhna, with paid in capital at USD1 ; ETRS is currently trading at an annualized 2021 P/E of 32.9xThe House of Representatives looking at new legislation to give local auto manufacturers more incentives and tax and custom exemptions (AUTO)EXPA witnessed a reduction in NPL ratio from 6.8% to a current 2.5%COMI is studying to manage a bond securitization worth EGP600 million Suez Canal Bank agreed to grant EGP400 million of financing Health Ministry raised the cost of obtaining a QR-coded vaccine certificate for travel purposesEgypt received another 1.6 mn Pfizer vaccines doses.Egypt’s production of wheat increased by 6.2%, recording 9.1 million tons during 2019/2020