Pre-Trading Thoughts

Net International Reserves were almost flat in February, at USD40.99 billion compared to USD40.98 in January; Value of the gold component increasedWe expect annual urban inflation to jump to around 8% in February up from 7.2% in January, on surging food pricesIMF: Economic consequences of the war in Ukraine are very serious creating an adverse shock to both inflation and economic activityFAO's benchmark gauge for world food prices went up in February by 24.1% YoY and 3.9% MoM, led by vegetable oils and dairy productsIsrael has begun exporting additional natural gas to Egypt through a pipeline traversing JordanMinister of Electricity said that electricity prices will not be increased now but the increase will be next July, for the residential segmentGASC has approached the International Islamic Trade Finance Corporation to raise USD700 million in financing to import supply commoditiesLocal media reported that Fedex Express is planning an EGX listing, without specifying a time horizonOrascom Construction-Hassan Allam Consortium is about to start different projects in Libya worth EUR3 billion (Al Shorouk)ESRS reported expectedly solid consolidated results for 4Q21 with attributable net income surging to EGP1,041 million in 4Q21; On the back of hikes in average selling prices that reflected positively on margins; FY2021 attributable earnings surged to EGP3,522 million reversing last year’s losses; ESRS didn’t propose any dividend distributions; ESRS is currently trading at FY21 P/E of 2.2x and FY21 EV/EBITDA of 3.4xIRAX net attributable profit recorded EGP2,598 million in 4Q21 reversing comparative quarter losses; FY2021 attributable earnings surged to EGP5,813 million reversing last year’s losses; IRAX is trading at FY21 P/E of 1.5x and FY21 EV/EBITDA of 3.1xSeverstal Russian Steel offered Egyptian producers to supply their needs of the necessary raw materials; Disruption of freight due to the war prevents producers from signing any importation contracts from RussiaETEL net profit came in at EGP2.3 billion in 4Q21 (+75.7% YoY); 2021 net profit came in at EGP8.42 billion, +73.6% YoY; Drivers: solid revenue growth, an increase in net finance income, EGP541mn FX gain, a decline of EGP183 million in impairments, a decline of 14% YoY in net interest expense, attributed to 20% YoY decline in gross debt, a surge of 51.5% in investment income from Vodafone on the back of provisions and taxed reversals of EGP502 million; BoD proposed distributing dividends of EGP1.00/share (DY of 5.2%); Trading at 2022f P/E of 4.7x and EV/Adjusted EBITDA of 2.5x Egypt Post launched an e-payment system that enables citizens to pay for their traffic fines, education fees, housing projects, and other postal servicesACAMD received an updated offer to co-develop its 60k sqm Zefta land plot