Pre-Trading Thoughts

El Sisi yesterday instructed cabinet to implement a package of incentives to support industrial activity and accelerate localization.

-Provide new industrial projects in specific sectors a five-year exemption from all taxes, excluding VAT, provided the projects are up and running within three years.

-Businesses that get their projects operational in half the agreed upon time frame will receive a 50% discount on the price they paid for the land.

-Expand the granting of golden licenses to all the projects working to enhance localization.

EXPA, the Agricultural Bank of Egypt, and aiBank have until 23 August 2024 to align their regulations with the 2020 Banking Act, after President Abdel Fattah El Sisi ratified the bill of establishing laws. 

Delegations from Egypt, Ethiopia, and Sudan met in Cairo on Sunday to begin a new round of talks over the Grand Ethiopian Renaissance Dam.

General Authority for Investment and Free Zones received requests from Chinese investors to inject investments into the local market in yuan to escape the dollar dominance.

Chinese textile manufacturer Zhejiang Cady Industry will invest USD 60 mn to establish a factory in Ain Sokhna.

Network International intends to invest EGP1 billion in the Egyptian market over the coming three years. 

Unnamed investors are eyeing the purchase of Gulf Capital’s entire 37% stake (23.1 mn shares) in EGX-listed Middle East Glass (MEG).

The government is planning to issue six more pellet steel production licenses to major foreign investors or local-foreign consortiums in 2024. Government is now prioritizing foreign companies to attract FX into the country.

Russia-based steel maker Novostal M plans to invest USD400-500 million to set up a steel factory in Egypt.

The government broke ground on its EGP1.5 billion strategic warehouse in Luxor yesterday which is planned to take 18-24 months to build. ORAS (FV: EGP181.70, OW), Hassan Allam Utilities, and Samcrete are executing the project. 

Misr Chemical Industries issued the net profit figure for July 2023 that amounted to EGP38 million, up 6% MoM and 71% YoY.  MICH stated in its BoD release that net profit for July 2023 increased thanks to higher production volumes and sales prices. MICH is trading at FY22/23 P/E of 3.37x.

Weekly Commodities |  Last Price           WoW Change, %

Brent, USD/bbl  84.5      -0.4%

Diesel-HSFO Spread, USD/ton     413.3    8.1%

Egypt Urea, USD/ton      467.0    0.0%

Polyethylene, USD/ton  1,070.0 0.0%

Polypropylene, USD/ton              940.0    2.2%

Steel/Iron Ore Spreads, USD/ton             377.1    0.0%

LME Aluminum Cash Price, USD/ton        2,113.7 1.2%

Egyptian Retail Cement, EGP/ton             1,917.5              12.1%

Steam Coal FOB Newcastle Australia, USD/ton    149.4              -0.1%

SMP, USD/MT   2,333.0 -4.9%