Pre-Trading Thoughts

Al Ahly Pharos

Net International Reserves increased to USD46.126 billion in May, the highest on record, up from USD41.1 billion in April. It is known that the second tranche of the Ras El-Hekma deal funds was received by the Egyptian authorities around mid-May.

Ministries of Petroleum and Electricity announced they were extending rolling power blackouts across the country for an extra hour on Tuesday to allow for preventative maintenance on its regional gas and power networks and because of increased consumption caused by a heatwave.

Egypt PMI jumped to a 33-month high as demand and inflation trends improve, recording 49.6 in May from 47.4 in April, as a marked cooling of inflationary pressures since early 2024 spurred a near-stabilization in demand conditions.

The Sovereign Fund of Egypt (SFE) will start offering 7-8 former ministerial headquarters in Downtown Cairo to investors during the second half of the year.

Adnoc Distribution, the distribution arm of UAE’s Abu Dhabi National Oil Company, is set to begin manufacturing motor oil in Egypt before the end of 2024. The company is also planning to add 15-20 gas stations in Egypt, Saudi Arabia, and the UAE over the next six months

Household appliance manufacturers and retailers are set to start slashing prices no less than 5-10% in response to the goods recently released from customs and from the first post-float import cycle hitting the market.

The Oil Ministry has once again reduced natural gas supplies to energy-intensive fertilizer companies by 20-30%, pushing a number of factories to close their doors until their gas supplies go back to normal levels. The effect of such a cut will be significant only if it is going to be in place for a long period of time.

Oil prices fell another USD1/bbl yesterday, extending losses that pushed them to four-month lows, reaching a low of USD76.76/bbl. Brent has now fallen 8% over the past week.

The Managing Director and CEO of EAST revealed that the company has sufficient liquidity and is ready to purchase raw tobacco worth up to USD1.2 billion to secure its needs for the next two years, with support from the Emirati partner.

GB Auto, GBCO’s auto arm and the local agent for Chery cars, is considering approaching the Ministry of Finance to include the Chery Tiggo 4 Pro model within the car replacement initiative, and studying benefiting from international agreements in preparation for taking steps towards export during the coming period.

ValU, HRHO’s arm, launched Ulter, a high-end platform that will finance purchases of luxury goods and services, including home finishing, travel, automotive, and marine transport, for affluent consumers.

The Central Bank of Egypt has issued fresh regulations putting a limit as to how long banks, payment services providers, and credit rating agencies can use the services of one accounting or auditing firm. The regulations also include a clause that ensures the client cannot use the same firm except after the passage of a specific period of time. Firms have 12 months to comply with the new rules.

Al Gioshy Steel is in talks with several Italian suppliers of steelmaking equipment to install a production line at its manufacturing facility next year at a cost between EGP500 million and EGP1 billion. The company aims to double its output to 200-240k tons this year.

MTIE has allocated the equivalent of EGP200 million to its Saudi venture, the company through which it plans to enter the Saudi home appliances and electronics market. The company plans to enter the Saudi market next month.

ELSH declared EGP0.15/share cash dividends (DY of 2.6%). Record date is 24 June 2024. Distribution date of first installment is 27 June 2024. Distribution date of second installment is 27 February 2025.

The Healthcare Ministry is putting together a committee to review medicine prices every six months.