Pre-Trading Thoughts

Monthly urban headline CPI inflation recorded 1.4% in February 2025 compared with 11.4% in February 2024 and 1.5% in January 2025. On an annual basis, urban headline CPI inflation recorded 12.8% in February 2025 compared with 24.0% in January 2025.Monthly core CPI inflation, computed by the CBE, recorded 1.6% in February 2025 compared with 13.2% in February 2024 and 1.7% in January 2025. On an annual basis, core CPI inflation recorded 10.0% in February 2025 compared with 22.6% in January 2025.The IMF Executive Board has completed the fourth review of Egypt’s USD8 bn loan program, allowing for the disbursement of USD1.2 bn, Finance Minister Ahmed Kouchouk said.The government will triple allocations for economic support in next fiscal year’s budget, including the funds going towards the export subsidy program and the Automotive Industry Development Program, the finance minister said.The second phase of the tax reforms will be rolled out next year, The Minister of Finance said. The first phase of the reforms was introduced in October and includes a simplified tax system for SMEs, a central clearing system, and measures to integrate the informal economy.The government is hoping to attract USD12 bn in FDI during the FY 2024-25, the General Authority for Investment and Freezones (GAFI) head Hossam Heiba said.S&P 500 futures traded around the flatline early Tuesday after concerns that a recession would hit the U.S. economy sparked a broad sell-off on Monday. ORHD reported stellar 4Q24 results, with net profit increasing 24.0% y/y and 9.0% q/q to EGP1.3 billion, bringing FY24 net profit up 9.9% y/y to EGP3.1 billion despite the 1Q24 net loss that had resulted from the FX loss driven by the March 2024 EGP devaluation. Given ORHD’s stellar sales performance and strong operations across all revenue segments, we maintain our Overweight recommendation of ORHD based on our FV of EGP34.74/share and reiterate ORHD as one of our top picks.RMDA issued positive 4Q24 results with net profit after taxes amounted to EGP158 million, exceeding our expected figure of EGP132 million, and up 31% QoQ and 181% YoY. 2024 bottom line came in at EGP402 million that is up by 59% YoY. RMDA is currently trading at FY25 multiples of P/E 10.7x.EFID BoD approved distributing cash dividends of EGP1.14/share for FY24, to be distributed on two equal installments. This implies a payout ratio of 49% and dividend yield of 4.1%.Emirates NBD is currently conducting its due diligence of the state-owned lender as the Dubai-listed lender looks to acquire an undisclosed stake in the state-owned bank. The government assigned HRHO to lead the IPO of Silo Foods for food industries. CCAP has requested 15k feddans for an agricultural and agro-industrial expansion project, focusing on herbs and aromatic plants, according to the Industry Ministry. The company will inspect available land in Sahl Baraka and Abu Zaabal. CCAP also requested the allocation of mining consessions and quarry leases to secure the supply of essential raw materials, especially talc and kaolin. Al Organi Group’s ODI to acquire a 26.25% stake in ATQA in a EGP1.9 billion transaction (EGP6/share). The acquisition, subject to regulatory approvals and due diligence, values Ataqa at EGP7.2 billion, 6% lower than current market cap.Six Egyptian construction companies are evaluating the potential execution of new infrastructure projects in Libya, with an estimated contract value of EGP100 billion.