Pre-Trading Thoughts

Al Ahly Pharos

We published yesterday our earnings expectations sheet for companies under coverage in 2Q24/FY24: 1) In 2Q24, aggregated net profit is expected to increase 61% YoY and decrease 19% QoQ, 2) In FY24, aggregated net profit is expected to increase 38% YoY, 3) Stocks that are expected to witness a shift from net loss to net profit YoY in 2Q24: OIH, AMOC, CCAP, EGAL, MCQE, 4) Stocks that are expected to witness a shift from net loss to net profit YoY in FY24: ESRS, 5) Stocks that are expected to witness a spike (>80%) in net profit growth YoY in 2Q24: HELI, BINV, ETRS, EGCH, ORWE, JUFO, ESRS, ORHD, AXPH, POUL, OLFI, ALCN, FWRY, CANA, EXPA, CLHO (sorted from highest rise in net profit).

Finance Minister Ahmed Kouchouk stated fiscal indicators in FY23-24:

– Overall budget deficit narrowed to EGP505 billion, down 17% from the EGP610 billion recorded last year and better than previous expectations, Kouchouk added.

– The country recorded a primary surplus of EGP857 billion, compared to EGP164 billion the year before.

– Revenues were up 59.3% y-o-y.

– Spending was up 37.4% y-o-y.

The government will halt the rolling blackouts starting next Sunday until mid-September, Madbouly said, adding that the state is still trying to fulfill its promise of fully hitting the brakes on its plan to reduce the electrical load by 2025.

The Prime Minister wants to see 3-4 GW-worth of renewable energy projects go live and start feeding the national grid by next summer to fill the energy supply gap.

The Cabinet will hold several meetings over the next few weeks to address issues facing private investors, particularly the state’s tax policy, to help attract more investments.

The Cabinet plans to overcome the current medicine shortage over the coming three months and is currently working to develop a plan to source 3k types of meds.

UAE-based Al Nowais' AMEA Power got the greenlight from the Cabinet to expand its renewable energy projects by next summer — the expansion will see AMEA up its renewable capacity in the country by 2 GW.

Centamin plans to invest up to USD100 million in gold exploration and production operations in Egypt during the next year.

The Ministry of Supply is working on a plan to increase its strategic reserve of basic commodities to 9 months, up from 6 months.

The cabinet approved a draft decision to renew the Tax Dispute Resolution Law until January 2025.

JUFO plans to invest EGP309 million in 2024 to build a milk cartons production line and a juice production line with the aim of meeting the increasing demand from export markets.

According to local press, telecom companies plan to increase international call prices by 10-15%.

DSCW Board approved to purchase a minority stake of around 17.4% in United Dyers Company , a sister company, at a value of EGP37 million. After this transaction, DSCW will own 100% of United Dyers Company.

The Alexandria Port Authority is set to award the 30-year contract to build, manage, and operate a 300k sqm dry bulk terminal in El Dekheila Port to a consortium of three local firms, according to local media. The consortium will invest some USD50 million in the first phase of the project. The contract is currently under review.

HRHO Financial Solutions is preparing to issue corporate bonds worth EGP1.5 billion during August to support the company’s financing portfolio and meet the growing demand for financing.

Banque Misr is considering increasing the size of its real estate fund to EGP1 billion from a current EGP600 million.

The Central Bank of Egypt signed an MoU with the French Development Agency, launching a new sustainable financing initiative.