Pre-Trading Thoughts

Egypt and Saudi Arabia are studying the possibility of conducting local currency-denominated trade in the coming period. Two high-profile Saudi investors are separately eyeing investments and acquisitions in Egypt that could together be worth north of half a billion USD,1.Al Lami Holding Group is aiming to invest some USD500 million in Egypt over the next two years in tourism and real estate.2.Batterjee Holding Group is eyeing a potential acquisition of an EGX-listed pharma company.The government’s new building reconciliation bill earned the House’s seal of approval. The law aims to make it easier for owners of unauthorized buildings built by 15 October of this year to legalize their properties in return for paying a reconciliation fee.The House approved a 30-year loan worth JPY100 billion from the Japan International Cooperation Agency (JICA) to fund the initial stage of Cairo’s Metro Line 4. The debt will come at a 0.1% interest rate and offers a grace period of 10 years.CBE intends to provide a license to fintech companies to enable them to link their cards issued to customers with InstaPay, during the next year.CIRA (FV: EGP18.24, OW) FY22/23 attributable net profit dropped significantly by 66.4% YoY to record EGP125 million.-We downgrade our FV for CIRA from a previous EGP21.5/share to a current EGP18.24/share, while maintaining our Overweight recommendation as the new FV implies a 43.4% valuation gap.-CIRA is currently trading at a FY23/24 P/E of 21.6x.CIRA is targeting to finalize a new securitization before the end of the year. The proceeds will be used to deleverage the company.  We upgraded our FV for ECAP to EGP35.56/share with an Overweight recommendation. The updated FV factors in updating our macro assumptions (exchange rate, inflation, and interest rates) and revisiting ASP and volumes. ECAP is currently trading at 2024f P/E of 4.9x.