Pre-Trading Thoughts

Al Ahly Pharos

*Key news articles for today*
Egypt’s external debt has decreased by 8.43% after hitting USD153.86 billion at the end of May 2024 compared to USD168.03 billion at the end of December 2023. This is mainly attributed to the waiver of UAE's deposits in the CBE, amounting to USD11 billion.

Egypt's expected external debt obligations in May during the 12 months ending in May 2025 declined by about 16.7% to USD37.5 billion, compared to April's position at USD45 billion.

Egypt’s foreign reserves can now cover around 7.9 months of merchandise imports, “greatly exceeding internationally recognized safe levels,” a CBE source said.

US oil giant Apache has plans to expand its operations in Egypt, and boosting production over the coming period.

Energy consumption reached its highest level ever on Sunday at around 165 mn cubic meters of fuel equivalent, the Oil Ministry said.

Egypt’s wheat imports jumped 34% y-o-y in the first six and half months of 2024, rising to 7.5 mn tons, with private sector imports leading the increase.

The World Bank will discuss in September approving two programs, one of which is worth USD300 million to support the competitiveness of SMEs, and the other, worth USD250 million, for the climate-resilient agriculture program, in addition to USD500 million for the state companies reform program, which will be discussed in November.

The Chairman of the EGX revealed that work is being done to complete the registration procedures for 11 new companies, which are planned to be listed before the end of this year, 8 of which are in the main market and 3 in the small and medium enterprises market “NileX”.

Lotus for Agricultural Investments and Development has moved from the EGX’s small and medium enterprises market to the main market.

OLFI reported outstanding 2Q24 financial results, showing:

o Record high net profit of EGP266 million, bringing 1H24 bottom-line to EGP 422.9 million (+99.3% YoY), on the back of the trickling down of an outstanding gross profitability in addition to FX gains of EGP30 million. This increase came despite a hike in interest expenses.

o OLFI is currently trading at a 2024f P/E of 5.3x.

OLFI aims to expand into new markets, especially Russia, England, and America, during the year, additional to their current 25 export markets. Also, the company has contracted to purchase a machine for manufacturing processed cheese, to begin production early next year. In addition, the Obour Farm is still in the construction phase and expected to begin production early 2025.

MASR signed a co-development agreement with Midar for Investment and Urban Development to co-develop a 1.0 million sqm land plot in Mostakbal City in East Cairo on a revenue-share basis, with MASR entitled to 62% of revenue as the developer and Midar entitled to 38% of revenue as the land owner.

PHDC and Arco are co-developing Arco's 0.2 million sqm land plot in West Cairo on a revenue-share basis, with PHDC entitled to 65% of revenue.

Al Ahly CIRA, has received the greenlight from President Abdel Fattah El Sisi to commence operations at the Saxony Egypt University of Applied Sciences and Technology (SEU).

Egyptian companies are racing against time for rapid transformation of ammonia production via green hydrogen and clean energy, after one of the local entities acquired export contracts for green ammonia to European market worth EUR397 million which indicates an increasing European demand.

Marriott and Reliance Egypt’s hospitality arm, Reliance Ventures, are partnering up to repurpose part of downtown’s Lazoghly complex, formerly the offices of the Interior Ministry, into a Moxy Hotel. The hotel is set to open in 2029.