Pre-Trading Thoughts

MSCI published its May 2024 Index review. TMGH replaced HRHO in Egypt’s Standard Index. HRHO is added to Egypt’s Small Cap Index, while CLHO, CIRA, HELI, TMGH, and MFPC were deleted from Egypt’s small cap index.The CBE absorbed liquidity worth EGP1.050 trillion from 32 banks within the framework of open market bids. All bid requests submitted by banks were accepted at an interest rate of 27.75%.The government is seeking to hedge against the risks of rising global oil prices for about 25% of the quantities it will import during the next fiscal year 2024/2025.The General Authority for Investment and Free Zones is preparing to launch 4 new free zones within 6 months, to attract more investments.NBE has raised its FX usage limits for credit cards for customers abroad and in Egypt. The International Finance Corporation (IFC) has earmarked USD50 mn to invest in SPE PEF III — an SPE Capital-run private equity fund that focuses on mid-cap companies in Africa — to support entrepreneurs and create more jobs.The IFC has agreed to a local currency swap with Banque Misr to boost the IFC’s lending capacity to local companies with limited access to foreign currency.Egypt’s Industrial Modernization Center has inked an agreement with the German development agency GIZ to support local SMEs in the food and agricultural sectors over an 18-month period.The Senate and the Financial Regulatory Authority (FRA) have given the go ahead for an amendment to the Capital Market Act that would open the door for the establishment of private equity funds. According to the proposal, private equity funds would take the form of limited liability companies and simple partnerships.The Head of the Egyptian National Electricity Transmission Company confirmed that 40% of the first phase of the interconnection project between Saudi Arabia and Egypt has been completed, and this phase is scheduled to be completed in mid-2025 to generate 1,500 megawatts. More than 10 Turkish companies are looking to invest in the ready-made clothing and textile sector in the Egyptian market during the coming period. It is expected that the actual investment steps will kick off during the current year.ORHD (FV: EGP26.26, OW) achieved strong 1Q24 sales of EGP8.8 billion, up 218.3% y/y and 37.9% q/q. Net profit in 1Q24 got severely hit by FX loss, leading to a net loss of EGP1.2 billion, compared to net profit of EGP291.5 million in 1Q23 and net profit of EGP1.0 billion in 4Q23. EMFD (FV: EGP6.74, OW) reported operationally weak 1Q24 results, with revenue declining 15.4% y/y and 65.1% q/q to EGP1.6 billion driven by revenue in Marassi, which constituted 68.9% of total revenue. MASR (FV: EGP5.24, OW) declared EGP0.20/share cash dividends (Dividend Yield of 6.1%). Record date is 27 May 2024. Distribution date of first EGP0.10/share installment is 30 May 2024. Distribution date of second EGP0.10/share installment is 31 October 2024.EKHO released 1Q24 financial results posting a 14% YoY (-9% QoQ) decline in revenues to USD193 million due to lower urea prices as well as the floatation of the EGP.MOIL released consolidated unaudited 2023 financial indicators posting an 82% YoY growth in revenues to USD186.5 million. Net profit recorded USD47.7 million compared to a net loss of USD106.3 million in 2022.ATLC (EGP6.60, OW) 1Q24 net income recorded EGP39 million (+8% y/y, +49% q/q). SAUD (FV:EGP25.00, OW) 1Q24 net profit recorded EGP555 million (+25% y/y, -10% q/q). The stock is currently trading at P/B24 of 0.7x and P/E24 of 3.3x.RMDA reported 1Q24 results. Attributable net profit came in at EGP57 million (-14.3 YoY, +8.3% QoQ). SUGR reported 1Q24 results showing: Net profit came in at EGP217 million (-33% YoY, +16%QoQ).