Pre-Trading Thoughts

Al Ahly Pharos

Government sources said that the Ministry of Finance has raised expected VAT revenues in the next fiscal year to EGP835 billion, an increase of 25% over the budget estimates for the current year 2023-2024, due to high inflation rates.

Egypt Purchasing Managers’ Index (PMI) rose from 47.1 in February to 47.6 in March, indicating a softer, but still-solid deterioration in the health of the non oil private sector. Output and new orders' volumes declined, yet input and output price inflation softened, and signals were reported that recent measures to combat Egypt's currency crisis, particularly the raising of interest rates and floating of the Egyptian pound, did bring some relief to price pressures.

Tourist arrivals were up 4% y-o-y in 1Q 2024 to 3.7 mn, but arrivals to Sharm El Sheikh were down 20% y-o-y in the same period, a government official said.

El Sisi has given final approval for the amendments to the Unified Budget Act.

The Ministry of Electricity’s purchase bill for renewable energy from investors increased by about EGP700 million per month to reach EGP2 billion after the liberalization of the exchange rate.

British Capricorn Energy has allocated USD10 million for exploration in Egypt in 2024, in five fields.

EGAL raised the prices of its products in early April by around EGP3,000/ton, backed by the hike in primary aluminium price on the London Metal Exchange (LME) in March.

EGAL is working on the final studies to launch the aluminum foil project with investments of USD100 million and production capacity of 50k tpa. EGAL is also looking into setting up a USD15 million aluminum silk production line by 2025.

SWDY's subsidiary Elsewedy Industrial Development is expected to break ground on its industrial zone — dubbed Industria October — in New 6 October City upon receiving a 2.5 mn-sqm plot from the New Urban Communities Authority within two to three weeks. SWDY plans to wrap up its expansion of its Saudi factory by late 2024. The company also wants to step into Latin America this year, with a focus on infrastructure, electricity, renewable energy, and gas sectors.

Oil prices settled higher on Tuesday after a session in which Ukrainian attacks on Russian energy facilities and escalating conflict in the Middle East pushed the Brent benchmark above USD89/bbl for the first time since October. Brent futures for June delivery settled up 1.7%, at USD88.92/bbl.

State-owned El Nasr Mining Company, an unnamed Indian company, and an unnamed local private company have set up a mining company for phosphate with combined investments of USD400 million. The private company holds a 40% stake in the joint venture, while El Nasr owns 24%. The Indian company owns the remaining 36%.

The agricultural sector revealed that a number of feed factories reduced the supply price of feed for poultry farms, and the reduction rates ranged between EGP300-EGP400 per ton, depending on the type.

CEO of Holdipharma company communicated that they will finish the development of 9 affiliated factories, with investment cost of around EGP1 billion, and will inaugurate by 30 April. Also, he mentioned that they will register 30 new drugs for chronic diseases with prices lower than current market prices.