Pre-Trading Thoughts

The CBE has released the Balance of Payment (BoP)'s performance report for 1QFY2024/25. The overall BoP recorded a deficit of USD991.2 million 1QFY 2024/25, as opposed to a surplus of c. USD230 million in the comparable period in the previous year. The current account deficit has surged by 110.5% YoY to USD5.9 billion in 1QFY2024/25 up from a deficit of 2.8 billion in 1QFY 2023/24, mainly fueled by a record-high trade deficit at USD14 billion, the highest trade deficit for a single quarter on our records which go back to 2001.

The IMF and the WB have slashed Egypt's growth forecast for the current fiscal year and the upcoming fiscal year in their respective outlooks. The IMF now sees the economy growing at a 3.6% clip during the current fiscal year, down 0.5 percentage points from previous forecasts. The World Bank slashed this fiscal year’s growth forecast by 0.7 percentage points to 3.5%.

The Cabinet approved the EGP30 billion initiative to support companies in priority industrial sectors during its weekly meeting last week. 

Egypt imported a record 981 mn cfd of natural gas from Israel last year, up 18.2% y-o-y, according to a report from industry publication Mees. 

Agricultural exports were up 15% y-o-y in 2024, increasing by 1.1 million tons on the year before to come in at 8.6 million tons, Agriculture Minister Alaa Farouk said.

Egypt's 5-year CDS rates slid down to 5.35% from 5.96% on 14 January on the declaration of Gaza ceasefire agreement, as, if maintained, it is expected to have positive effect on external finances, including Suez Canal revenues as well as tourism in Sinai.

The Ministry of Planning signed the terms of the executive agreement for the soft loan from Japan worth USD230 million to support the budget, empower the private sector, and diversify the economy.

French yeast producer Lesaffre Egypt will receive the golden license for its EUR120 million yeast production and packaging facility to be set up in Beheria.

Finnish food packaging manufacturer Huhtamaki secured the golden license for its EGP1.5 billion factory.

EGCH inked a seven-year agreement with Saudi capital-backed Al Sharq Real Investment, under which the latter will operate and maintain an electric arc furnace for silico-manganese alloys production. 

ABUK's BoD approved proceeding with the second phase of the company's solar energy project and starting the procedures for tendering the installation of new solar energy stations in several locations within the company with a capacity of 2.5 to 3 MWp.

The National Investment Bank is targeting to sell its 30% stake in Alamal Alsharif Plastics after listing the company's shares on EGX.

Oil and gas companies have drilled 105 wells over the past six months. These wells — 95 oil and 10 natural gas — have added 63.7k bpd of oil and 271 million cfd of natural gas to the country’s daily local energy production, which will help the state save some USD1.5 billion in oil imports. Prime Minister expects Egypt to get back to importing natural gas by 2027.

Chevron plans to invest USD150 million to drill a second exploratory well in the Mediterranean’s Nargis gas field next month. The company will get started on drilling the second well after completing and sealing the first well. Gas production is expected by late 2026.

EFID acquired 49% of Baghdad-based snack maker Tuama Jebur Abbas (TJA) for USD8 million through a capital increase. The acquisition includes a factory equipped with three production lines, two for cakes and one for biscuits. This marks EFID’s first entry into the Iraqi market, with plans to invest around USD27 million over the next three years.

Social Impact Capital’s acquisition of CIRA nears its close with 96.5% of targeted shares responding to the offer.