Pre-Trading Thoughts

*Key news articles for today*

Abu Dhabi wealth fund ADQ-owned AD Ports Group has inked a 50-year renewable usufruct agreement with the Suez Canal Economic Zone (SCZone) to develop and operate an industrial and logistics zone spanning 20 sqkm in East Port Said.

Net foreign assets in Egypt’s banking sector increased for the third consecutive month to USD15.04 billion in March, up c. 47.5% from February’s USD10.2 billion. Commercial banks recorded their first surplus since August; their net foreign assets came in at USD2.5 billion in March.

The government is preparing to unveil a revamped export subsidy program that will roughly double support rates across all sectors, introduce new incentives for branded exports, and prioritize higher value-added sectors. The framework is expected to be formally announced soon, come into effect on 1 July, and run through 2028.

The CBE has plans to issue a record EGP2.2 trillion in t-bills and bonds during the fourth quarter of the current fiscal year, marking a 9.7% q/q increase, to help cover the budget deficit. 

The government plans to purchase 8.5 million tons of wheat in the upcoming fiscal year, split between local and imported supply. That is around 300k tons more than FY24/25.

The government plans to implement a number of amendments and measures to increase the expected VAT proceeds during the next fiscal year, by including new sectors in the formal economy and applying the tax to entities previously exempted from it. This comes amid expectations of lower production costs and a further reduction in interest rates.  Sources told press that allowing banks to process customs imports after the official working hours without restrictions will expand the import and export base for investors, which will positively impact VAT revenue.

ABUK released 3Q24/25 unaudited financial indicators with net profit came of EGP3.3 billion (-59% YoY, +5% QoQ). This brought 9M24/25 bottom line to EGP7.8 billion (-36% YoY). ABUK is currently trading at FY24/25f PE of 5.0x.

EFIC released 1Q25 unaudited standalone results with net profit increasing by 32% YoY (-78% QoQ) to EGP208.9 million. EFIC is currently trading at FY25f PE of 5.2x.

ABUK subsidiary North Abu Qir for Agri-Nutrient Company’s Board of Directors approved the establishment of a new company under the name Khaleej Abu Qir for Agri-Nutrient as a private free zone company with an authorized capital of USD100 million and issued and paid-in capital of USD5 million. 

ABUK subsidiary Global Company for Methanol and its Derivatives’ general assembly approved the liquidation of the company, and the redemption of the shareholder shares in the company’s capital.

TMGH (FV: EGP75.00, OW) launched the second phase of SouthMed on the North Coast.

Weekly Commodities Update

|   | Last Price | WoW Change, %
| Brent, USD/bbl | 66.9 | -1.6%
| Diesel-HSFO Spread, USD/ton | 216.7 | 2.1%
| Egypt Urea, USD/ton | 392.5 | -0.6%
| Polyethylene, USD/ton | 940.0 | 0.0%
| Polypropylene, USD/ton | 990.0 | -0.5%
| LME Aluminum Cash Price, USD/ton | 2,396.3 | 2.9%
| LME Copper Cash Price, USD/ton | 9,376.4 | 2.4%
| Egyptian Retail Cement, EGP/ton | 3,527.0 | 0.1%
| Steam Coal FOB Newcastle Australia, USD/ton | 93.8 | -1.4%
| SMP, USD/MT | 2,795.0 | -2.8%