Pre-Trading Thoughts

Al Ahly Pharos

*Key news articles for today*
The government raised electricity prices in Egypt by rates ranging between 14% and 39% for domestic use. The new increases in electricity chip prices actually took effect 3 days ago. The commercial and industrial sectors will also see price hikes, reportedly ranging from 23.5-46% and 21.2-31%, respectively, from the beginning September.

President Abdel Fattah El Sisi has reappointed Hassan Abdalla as the acting governor of the Central Bank of Egypt for another one-year term, according to a decree published in the Official Gazette

The Supply Ministry will halt the distribution of additional quantities of subsidized sugar via ration cards from the beginning of September, reverting to the standard two-kilogram allocation in a bid to prevent additional sugar from reaching the black market.

The ministry is also considering raising the price of sugar on ration cards, Minister said, adding that it is difficult to continue offering sugar at the price of EGP12.60 per kg.

The ministry is studying a proposal to sell subsidized bread by weight instead of the current system of five loaves per person a day.

The government will announce the purchase of 3.8 mn tons of wheat before the end of the year. GASC is looking into importing wheat from Turkey and is exploring other sources.

The Russian company Transmash is considering launching a maintenance workshop in the Abu Zaabal area of the Railway Authority, with investments of USS300 million.

Electricity tariff for energy-intensive industries reportedly increased to EGP1.60 per kWh up from the previous rate of EGP1.32 per kWh. EGAL is affected the most with any change in electricity price, where electricity alone constitutes around 40% of its production costs. EGAL’s gross margin shrinks by c. 5% for every EGP0.25/kWh increase in electricity tariff. We remind you that we already incorporate an annual electricity tariff increase of c. 20% starting 2025 into our models.

ETEL intends to borrow USD150 million in two months to restructure its debts and lengthen its tenors.

AMOC's BoD proposed distributing a cash dividend worth EGP0.7/share for FY23/24, implying a dividend yield of 7.4%.

More meds price hikes are in the pipeline where some 1.6k pharma products will be subject to price hikes between September and end of 2025. Companies could receive the greenlight to hike the prices of some 600 types of meds before the end of the year.

EXPA is set to launch a digital platform for small- and medium-sized exporters next October. The platform will connect exporters with international importers

BINV Managing Director Abdel Monem Omran has been appointed chairman of OFH and BINV Board Member Mostafa El Anwar was appointed his deputy.