Pre-Trading Thoughts

Net International Reserves dropped to USD37.08 billion in March 2022 down from USD40.99 billion in February, for "covering substantial foreign investor outflows, ensuring availability of imported strategic goods, and repaying external debt obligations."Government is still aiming to maintain a primary surplus of 1.3%, the overall budget deficit at 6.2%, and the debt-to-GDP ratio to be less than 90% by the end of the current fiscal year.Inflation figures for March 2022 will be released today, We expect urban inflation to record 11.3% YoY, and 2.9% MoM.The joint committee of the "QIZ" agreement intends to add new industries such as communications and information technology, processed foods, and leather.The House of Representatives Industry Committee is preparing a study on strengthening local manufacturing and increasing exports, to achieve industrial integration between small and large enterprises, and to activate small projects’ participation in national projects.Customs exchange rate fixed at EGP16/USD for basic commodities and production requirements until the end of April.ADQ is to acquire the National Investment Bank’s (NIB) entire 21.5% stake in ABUK.EGCH (Kima) addressed a consortium of 6 local banks to reschedule debts worth EGP6.4 billion to 7 years, to end the loan tenor in 2034 instead of 2028.EKHO decided to swap the trading currency for 1.5 million shares from EGP to USD. Afrexim Bank granted letters of guarantee worth USD1.0 billion for Egyptian contractors, to implement infrastructure projects in African markets, including SWDY, ORAS.EFIH plans to deploy 1500 PoS machines in gas stations across Egypt until 2023, with 180 PoS machines in phase one.ADQ plans to acquire a stake of around 15% in FWRY during 3Q22.The digital banking license is set to be introduced in 2Q22. EFIH, COMI interested.HELI signed the contract to sell a 243 feddan (1.0 million sqm) land plot in New Heliopolis for EGP1,700/sqm. We value the transaction at EGP828.4 million, implying EGP0.62/share and EGP812/sqm. This transaction takes our FY21/22 net profit forecast to EGP1.1 billion, P/E 2022 of 7.4x, and EV/EBITDA 2022 of 6.9x.EFID is planning to invest EGP1.0 bn over the course of the coming three years; EGP400 mn to add new production lines for its baked goods and wafers; Some for expanding cake production in Morocco.Passenger cars importers and assemblers are raising prices in the local market. The local agent for the Renault brand in Egypt announced an increase in the prices of its brands between EGP25k-55k for 2022 models. EgyptAir is resuming daily flights between Cairo and Moscow starting 12 April 2022.The Sovereign Fund of Egypt (SFE) is planning to invest in two companies in the financial inclusion and non-banking financial services sectors before the end of 2Q22. HRHO is the financial advisor for the Saudi Wealth Fund (PIF) on its potential acquisition of Siemens plant(s).MHOT is planning to inaugurate its Safir Dahab Hotel during Eid El Fitr in May 2022.