Pre-Trading Thoughts

The Planning Ministry has upgraded its FY2021/22 growth forecast for the economy to 6%, from 5.6%Egypt is expected to issue Eurobonds worth up to USD5 billion in the FY2022/23NFL in banks (exc. CBE) increased from USD7 billion to USD10 billion, due to portfolio exitsThe government has approved new tax exemptions, from the Value Added Tax Law and the Stamp Tax LawEgypt officially joined the JP Morgan government bond indexes for emerging markets with a relative weight of 1.85%EGX Rebalancing Official Results| EFIH, ORAS, ADIB, HDBK joined the index, while PRDC, GDWA, ASPI, RAYA, SPMD, EGTS got excludedEGAL reported a positive 2Q21/22 net profit at EGP500 million reversing last year losses of EGP190 million in comparative quarter, and above last quarter’s profit of EGP314 million (+59% QoQ); EGAL is currently trading at FY21/22e P/E of 7.3x and EV/EBITDA of 5.6xSWDY signed a new sub-contracting contract EGP615 million, for a 7-month projectCIRA Earnings Call Highlights| Guidance for FY21/22 revenues of EGP1.60-1.65 bn, EBITDA of EGP750 mn, and EGP300-350 mn in bottom-line are still attainable, even if the Assuit University branch did not start operations by February 2022. Management targets revenue mix as follows: higher education contributes 70% of revenues, K-12 represents 20%, and 10% is distributed amongst nurseries, ed-tech, and ed-entertainment. CIRA is currently trading at a FY21/22 P/E of 26.5x and EV/EBITDA of 11.0xHRHO allocated EGP500 million to finance brokerage firms through its factoring arm; Planning to issue new securitization bonds worth EGP1 billion during 2022Weekly Commodities UpdateBrent futures are trading at USD91.17/bblThe Egypt Urea Index dropped by 9% WoW and prices are currently at USD700/tonPolyethylene prices were up 4% WoW to USD1,290/tonDiesel-HSFO spreads were up 9% WoW and are at USD335/tonPolypropylene prices at USD1,195/MTSteel/Iron Ore spreads are flat at the USD406 markAluminum prices at USD3,083/tonThermal coal prices were unchanged WoW recording USD219/tonSMP prices rose by 5% to reach USD3,963/MT