Pre-Trading Thoughts

Pitch| Regardless of the way out of the maze, the market is playing FX-rate musical chairs. ORHD, EGAL, and ESRS current market prices are not reflecting yet the current exchange rates, and thus they have a significant upside from the current prices. AMOC, ORAS, SWDY and MFPC are showing some upside from the current market prices, but not as high as first group. If we were to choose between DSCW and EKHO, we will go for the latter, due to transparency and strategy. ABUK, SKPC, EGCH, EFIC and ALCN are overplayed at those prices. We still see that banks are offering a great opportunity, with high focus on ADIB, CANA and CIEB.[Check table for details]Analysts expect the Federal Reserve to raise interest rates by 25 bps when it meets on Tuesday and Wednesday this week.  Prime Minister: The government is aiming to raise up USD 2 bn from asset sales by June, and will hire an international advisor to ensure efficiency on the privatization process.Prime Minister reassured international markets about the sustainability of Egypt’s debt amid, after the sell-off of Egypt’s USD bonds accelerated last week.Egypt’s one-year credit-default swaps rose 1k bps to 2.3k bps in April.Prime Minister: The state is preparing over 10 military-owned companies for offering. Prime Minister: EGP flotation will be subject to controls set by the state.  Egypt’s economy will grow at a 4.0% clip in the current fiscal year, as per the poll conducted by Reuters. Egypt has reached agreements with China and India to trade in rupees and yuan when importing wheat.Supply Minister: The government will start gradually raising the prices of commodities sold to ration card holders.Supply Minister: Egypt has 2.6 months’ worth of wheat in strategic reserves. The Supply Ministry is working on a proposal that would allow Egyptians living abroad to import gold to Egypt (worth USD10,000) without paying customs.More than 16k people from Sudan have crossed the border into Egypt since the conflict began.  The government is set to launch the sixth phase of its export subsidy program, through which it plans to pay out some EGP 10 bn worth of overdue subsidies to exporters by 5-6 July.ETEL will start gradually applying the prepaid fixed line bill payments (similar to the mobile). SKPC will distribute a cash dividend worth EGP0.90/share over two tranches. DY 4%.