Pre-Trading Thoughts

The MPC will meet today to decide on policy rates in Egypt. We think inflationary pressures accompanied by the weakening FX and general risk aversion attitude by investors towards the EMs in general, and, more importantly, commitments implied by the IMF loan might induce the CBE to respond by a potential considerable hike, maybe 200bps.According to the Minister of Planning, the government allocated EGP302.2 billion to social protection programs during FY22/23, an increase of 17.6% compared to EGP251 billion actually paid in FY20/21.Non-petroleum exports increased to USD30.4 billion during the first 10 months of 2022, growing 12% YoY. Building materials imports increased by 8% YoY to USD5.75 billion. Steel rebars are currently sold at EGP27.5-30k per ton, higher than ex-factory price by EGP3.5-6k per ton.Alexandria Mineral Oils Company (AMOC) and Paint and Chemical Industries (Pachin) have each decided to delist their global depository receipts (GDRs) from the London Stock Exchange.Paint and Chemical Industries (Pachin) will respond to the takeover offer from Dubai-based National Paints Holdings (NPH) as soon as early January.Egypt exported EUR 1.5billion worth of fertilizers across the Mediterranean during 10M2022, almost triple that of 2021, according to the Chemical and Fertilizers Export Council.Energy companies can bid for 12 new oil and gas exploration blocks in the Mediterranean and Nile Delta starting next week in an international tender set to be launched by state-owned Egyptian Natural Gas Holding Company (EGAS).Oil prices increased by more than USD2/bbl on Wednesday after data showed a larger than expected draw in U.S. crude stockpiles. Brent crude is currently trading at USD82.62/bbl.FRA data revealed that insurance gross premiums increased to EGP42.24 billion (+12.4% YoY). The value of financial leasing activity amounted to EGP64.69 billion (+11.2% YoY), while consumer financing increased by 84.4% YoY to record EGP21.05 billion. Microfinance balances reached EGP35.48 billion (+45.3% YoY). Lastly, mortgage jumped to EGP11.45 billion by the end of September 2022 (+106.9% YoY), while securitization bond issuances also jumped 5 times to reach EGP34.8 billion.