Pre-Trading Thoughts

A “very important” Qatari real estate project on the North Coast is in the works, Prime Minister Mostafa Madbouly said. The Gulf nation is also looking into investments into the North Coast’s tourism and hospitality sectors, according to Madbouly, who added that they will soon present Qatar with a list of relevant investments that may be of interest in Greater Cairo and the new capital.The government has temporarily suspended the local cotton trading system on the back of pricing issues that have crippled the industry this season, sector sources said. The crisis stems from guaranteed prices for farmers set by the government that significantly exceed the crop’s current global market value, making it difficult to trade locally or internationally.Passenger car imports were up 43.3% y-o-y in 8M 2024 toUSD 1.5 bn, according to data released by state statistics agency Capmas.A Russian trade mission, featuring representatives from 14 companies, will visit Egypt on 4-5 December, a source at the Russian Export Center said. The mission will include representatives from construction, technology, and urban development companies who will conduct meetings with local players.The CBE intends to issue USD treasury bills ranging between USD900 million and USD1 billion next week, sources said.We conducted a preliminary analysis of the United Bank IPO to evaluate how its pricing compares to other listed banks. The private offering was covered 6x and the final offering price was set at EGP13.85 per share which values the bank at EGP15.24 billion.  We believe the bank is being offered at fair multiples, without any investor discount or potential for significant upside in the near term, compared to the current sector distressed multiples. A recent report from Fitch Solutions predicted that the banking sector would continue to deliver a strong performance until 2025. BM consumer finance firm, Sohoula, aims for a second securitization bond issuance deal next year of EGP1 billion, after completing the first issuance amounting to EGP478 million to reach the full integrated program aim of a total amount of EGP3.5 billion.The Madbouly government has reached an agreement with Norwegian renewables developer Scatec partially pay for the electricity purchased under the 25-year power purchase agreement inked with the Egyptian Electricity Transmission Company for its planned 1 GW solar and 100-200 MWh battery storage hybrid project in local currency. We note that the project should generate electricity for EGAL’s industrial complex in Nagaa Hammadi.Local firm Treegas has signed a MoU with Czech company HPC that will see the firms establish a factory to localize the manufacturing and filling of fiberglass LPG cylinders in the Sokhna Industrial Zone, with planned investments of EUR10 million split over two phases. The government has launched its National Strategy for the Localization of Vaccine Manufacturing, according to a statement from the Health Ministry. The strategy will involve long term contracts to secure a stable market for local vaccine manufacturers.