Pre-Trading Thoughts

Al Ahly Pharos

We published today our earnings expectations sheet for companies under coverage in 3Q24/FY24/FY25: 1) In 3Q24, aggregated net profit is expected to increase 49% YoY and decrease 14% QoQ, 2) Aggregated net profit is expected to increase 53% YoY in FY24 and 15% YoY in FY25, 3) Stocks that are expected to witness a shift from net loss to net profit YoY in 3Q24: HELI, ESRS, MCQE, 4) Stocks that are expected to witness a spike (>80%) in net profit growth YoY in FY25: EGCH, CIRA, MCQE, ECAP (sorted from highest rise in net profit)

It is interest rate day. We remind you that we expect the CBE to prefer to hold rates unchanged in its meeting, on a relatively sticky inflation in 4Q24. I

The World Bank sees the Egyptian economy growing at a 3.5% clip during the fiscal year 2024-2025, trimming its outlook 0.7 percentage points from the 4.2% forecasted in June, on lower Suez Canal revenue and persistent uncertainty.

Prime Minister Moustafa Madbouly explained at his weekly press conference that the government is preparing for all potential scenarios in the region amid escalating tensions around Israel’s war on Gaza and Lebanon.

The Prime Minister touched on the potential for local currency transactions between Egypt and Saudi Arabia.

Head of the European Union delegation expects the European Parliament to start discussing a loan to Egypt in January. The total value of the loan amounts to EUR5 billion, of which EUR1 billion does not require a parliament approval.

The Canadian company Tag Oil announced that it obtained the approval from the General Petroleum Authority regarding the company’s proposal to acquire a large concession in the Western Desert in Egypt.

The net foreign assets of the CBE increased by about USD186 million to reach USD10.459 billion by the end of last September.

The Prime Minister said that the electrical interconnection line between Saudi Arabia and Egypt will enter service in May or June 2025, and the capacity of the first phase will reach 1,500 megawatts out of the total capacity of the line, which amounts to 3,000 megawatts.

United Bank has officially submitted a request to list its shares on the EGX as the Central Bank pushes ahead with its plan to sell a stake in the lender in an IPO before the end of 1Q25.

COMI and HSBC cut interest rates on their local currency high-yield CDs yesterday.

The government will within weeks offer a desalination plant to private players to be implemented under a public-private partnership (PPP) in the Suez Canal Economic Zone.

EAST dividends distribution of EGP2.70/share for FY23/24 will be paid out in two installments, with the first paid on 21 October 2024 and the second on 25 November 2024.

According to local media, the minority stake that El-Damaty family intends to retain in DOMT will be around 20%, as part of a non-binding purchase offer from Denmark’s Arla Foods.

EFIH’s general assembly approved distributing cash dividends of EGP0.197/share from 1H24 profits. This implies a payout ratio of 60% and a dividend yield of 1%.

CIRA’s general assembly approved cash dividends of EGP0.26/share for FY23. This implies dividend payout ratio of 120% and dividend yield of 1.8%.

EGCH released 4Q23/24 revised unaudited financial indicators, posting net profit of EGP2.4 billion during 4Q23/24 compared to net profit of EGP46 million in 4Q22/23 and a net loss of EGP411 million in 3Q23/24. On an annual basis, net profit grew by 131% YoY to EGP2.5 billion in FY23/24 from EGP1.2 billion in FY22/23. EGCH is currently trading at a 2024/2025e EV/EBITDA of 10.3x.