Pre-Trading Thoughts

*Key news articles for today*
EMFD, BINV, CIEB, CLHO, and FAIT have been added to the EGX30 following the bourse’s semiannual review, according to a statement. CCAP, ISPH, ORHD, SUGR, and PHAR were removed from the index to join the broader EGX70 index, effective 1 August. Meanwhile, RMDA and EFIC both joined the bourse’s new shariah-compliant index — the EGX33, replacing FWRY and MFPC.

 The recently approved USD820 mn tranche from the IMF should arrive in the “coming days,” Finance Minister.

Egypt’s non-oil trade deficit narrowed by 16% y-o-y to USD15.9 bn in the first half of 2024, driven by a rise in exports and a dip in imports.

Suez Canal revenues have dropped to around USD300 mn a month, down 64.7% from USD850 mn previously, Prime Minister said. Canal revenues continue to suffer due to Red Sea tension.

The Transport Ministry wants to attract some USD1.2 bn in private investment to carry out seven strategic projects to build new dry ports, expand maritime capabilities, and improve logistics centers across the country.

The Cabinet decided to reinstate the long-shelved Investment and Foreign Trade Ministry. The ministry will work to create a favorable investment environment. It will also focus on developing Egypt’s foreign trade, strengthening trade relations, and boosting our exports.

The New and Renewable Energy Authority (NREA) is set to allocate plots of land in the Gulf of Suez to investors to set up solar and wind energy projects  in exchange for a share of the generated energy.

Demand for gold bars and coins in Egypt dropped 27% y-o-y in 2Q24 due to the EGP float undermining “the currency-hedge motive for investing in gold”.

SUGR released 2Q24 financial indicators where net profit came in at EGP723 million (-5.4% YoY, +233.7% QoQ). SUGR is currently trading at 2024f P/E of 5.1x.

TMGH (FV: EGP75.00, OW) achieved YTD sales of EGP390.0 billion, up 550.0% y/y. Sales performance was driven by SouthMed project which generated sales of EGP251.0 billion, and Banan which generated sales of around EGP42.0 billion.

The financial leasing sector is trying to get out of the decline in its activity affected by the decisions of the CBE related to restricting bank financing directed to the sector to reduce risks. Financial leasing companies have resorted to different ideas such as establishing funds for non-banking financial activities and Factoring.

Act Financial’s (ACTF) will begin trading on the bourse at the start of today’s trading session. The retail tranche of the IPO was 54.8x covered, while the institutional tranche was 20.2x oversubscribed.

The cabinet approved a draft decision that grants Safaga Station Operating Company the right to build and develop the superstructure of the Safaga Port as well as handle its management, and operation. Also, Dekheila Container Terminal got the greenlight to build and develop the superstructure of a container terminal at the Dekheila port in Alexandria, as well as operate and maintain the terminal upon construction.