Pre-Trading Thoughts

Foreign investments in the secondary market for treasuries recorded a net sale on Monday of EGP1.7 billion, the first after the EGP flotation early March. Foreigners bought EGP326 million worth of treasuries and sold about EGP2.04 billion.
 
American energy company Apache invested USD137 million in exploration activity in Egypt during the 1Q24.
 
The government is looking to cut down on its spending on bread subsidies to bring the selling price closer to the “massive” cost of production, Prime Minister said. He explained that the government will continue to subsidize bread.
 
Prime Minister also signaled that we could see more fuel price hikes as the state looks to “restore balance” between cost of production and end price by the end of 2025. This will happen “gradually” and will not include diesel.
 
Prime Minister said that the Electricity Minister will prepare a plan as to how the government can completely cut its spending on electricity subsidies over the coming four years. Households with light consumption will continue to see their electricity bill heavily subsidized but the government will be able to cover the cost through other outlets.
 
The government is looking into importing wheat from Mexico, Zimbabwe, and Sweden in a bid to diversify its wheat across different continents, a government official said.
 
Prime Minister said that he assigned the Ministers of Electricity and Petroleum to develop a clear plan to bring load-shedding to an end, with the end of daylight saving time, no later than next November or December.
 
The USD concessions by individuals and companies to banks and exchange offices since 6 March 2024 has reached about USD3 billion, sources said.
 
Saudi Arabia’s Public Investment Fund (PIF) is in talks to acquire an unspecified minority stake in local agriculture firm Daltex Corporation through a capital increase.
 
GV Investments’ automotive arm GV auto will start locally manufacturing Chinese state-owned auto manufacturer FAW Group’s cheapest EV model in 1Q25. The production will mainly target ride-hailing services.. The companies will spend up to USD20 million on industrial facilities.

We issued a valuation update for BINV where we maintain our Overweight recommendation on an updated FV of EGP34.17/share given the company’s recent round of new investments.

CNFN subsidiary, Sarwa Insurance, targets EGP80 million in profits by the end of this year and plans to increase its paid-in capital from EGP138 million to EGP250 million during the first half of the fiscal year 2024-2025.