Pre-Trading Thoughts

Al Ahly Pharos

• Purchasing Managers Index rose to 49 in December, up from 48.7 in November. The climb was due to lower rates of decline in output and new orders,an improvement in tourism activity, and a sharp rise in export orders that was the strongest since February.
• Seven international companies were awarded exploration and production licenses for eight oil and gas concessions in the Mediterranean, the Western desert, and the Gulf of Suez, with a minimum investment value of c.USD250 million.
• The chairman of the Suez Canal Authority said that the 6% increase in canal fees will boost annual revenue by USD400 million.
• The Ministry of Electricity is working on providing electricity for the new delta development project, at a cost of EGP14.5 billion. The target area for cultivation in the new delta is 2.2 million feddans, and the electrical supply needed is 2,185 megavolt-amperes. Tenders will be held to specialized companies to contract for the supply and installation of missions during the first half of this year.
• EDITA declared that no satisfactory agreement has been reached with the Egyptian Belgian Company, manufacturer of the brand “Ole”, regarding the acquisition of any of its assets or designated affiliates or subsidiaries
• The billets production license is the most attractive amid the steel licenses offered by the Industrial development authority in November 2021. it is noteworthy that the industrial authority will receive the license’s buying offers by 15th of February 2022. While Ashraf Algarhy – head of the Egyptian Steel (Al Maria Steel) stated that the company will buy a license for billets production with a total capacity of 1.1 million tons.
• SAUD (FV:EGP20.00, OW) plans to increase its issued and paid-in capital to EGP5 billion in 2022, from a capital of EGP1.546 billion as of September 2021, in addition to achieving profits of EGP1.410 billion by the end of 2022, compared to EGP1.12 billion as of September 2021.
• NBE has raised its stake in COMI (FV:75.0.,OW) to 9.13%, up from 8.27% as of September 2021 at an undisclosed price.
• CIEB’s (FV:EGP40.00, OW) CFO officer and IR, Hany Nassef resigned from his position effective 31 December 2021.
• Care Healthcare sold 8.78% of its ownership in CLHO (FV: EGP6.40, OW), with a total transaction worth of EGP709.84 mn for 141.96 mn share, at EGP5.00/share, to drop its ownership from 37.78% to 29%.
• The FRA’s prosecution on SPMD’s conflicting disclosures of Prime Speed and Al-Safwa hospital has been postponed to 17 January 2022.
• RAYA announced the record and distribution dates of its DPS of EGP0.06/share (implying a payout ratio of 21% and a DY of 2.5%) on 13 January 2022 and 18 January 2022; respectively.
• Hotel prices are expected to grow by 15-20% in FY22, compared to 30-35% growth in FY21.
• Weekly Commodity Update
  • Brent futures are trading at USD78.7/bbl
  • The Egypt urea index was unchanged WoW at USD945/ton
  • Polyethylene (HDPE) prices were down 2% WoW to USD1,250/ton
  • Diesel-HSFO spreads were up 14% w/w and are at USD179/ton
  • Caustic soda prices cooling down continue as it drops by 8% w/w so reach USD590/ton
  • Polypropylene prices came flat w/w, standing at USD1,200/MT:
  • Steel/Iron Ore spreads are at the USD397 mark, down 3% WoW
  • Aluminum prices were stable WoW to record USD2,808/tonne
  • Thermal coal prices increased by 1% WoW recording USD186/tonne