Pre-Trading Thoughts

Ministry of Finance has revised its fiscal targets for FY2022/23 to 6.3% of GDP, compared to a previous target of 6.1%, and the primary surplus to 1.5% down from 2%President El-Sisi directed the government to prepare a package of financial and social protection measures to mitigate the effects of global economic repercussions on citizensForeign holdings of T-bills increased in January 2022 by about USD800 million to USD21.3 billionEFIH announced a USD10 million investment in Nclude Fund, a venture capital USD85 million fund focused on investing in early- and growth-stage Egyptian fintech as well as Middle East and Africa based fintech startups with National Bank of Egypt, Banque Misr, and Banque du CaireEFIH board approved a partnership with one of the sister companies to purchase a land plot in the new administrative capital and to co-fund the construction CLHO reported solid 2021 net attributable profit of EGP387 million in 2021, + 35.0% YoY; On a quarterly basis, net profit recorded EGP115 million (+7.1% YoY), CLHO is currently trading at 2022f P/E of 15.3x and EV/EBITDA of 7.6xISPH reported healthy 2021 net profit of EGP315 million in 2021, +40.1% YoY; On a quarterly basis, net profit stood at EGP73 million in 4Q21 (2x YoY); Management 2022 Guidance: Revenues are expected to grow by around 15%, GPM in the range of 7.7%, NPM in the range of 1.6-1.7%; Proposed dividends of EGP0.10 per share (DY 3.4%); ISPH is trading at 2022f P/E of 6.7x and EV/EBITDA of 4.4xBritish American Tobacco Egypt announced that it will raise its prices between EGP 1-3 per pack, as a result of the central bank’s decision to require letters of credit (L/Cs) from importersMNHD’s rights issue for its EGP374.4 million capital was 97.5% subscribedPHDC raised its stake in Incolease (ICLE) to 15.36%. The total transaction value of the 15.36% stake is estimated at EGP126.0 million (EGP0.04/PHDC share)SKPC is studying the establishment of a new plant to produce polylactic acid as an environmental alternative to polymers and plastic raw materialsCBE: As of January 2022, loans amounted to EGP3.032 trillion, compared to EGP2.455 trillion (+23.5% YoY), while deposits increased to EGP6.45 trillion (+24.3% YoY)ElSisi has ratified amendments to the Capital Markets Act that introduce future flow securitization; Supports utility providers, healthcare companies, telecom players, and education outfitsFRA is looking to introduce new mechanisms to assess NBFS market conditions and gauge lenders’ exposure to risk