Interest Rates Exchange Rate Gold Brent Crude Oil. Lending Deposit USD/EGP USD/ounce USD/barrel 17.75% 16.75% ,

Transcription

1 Interest Rates Exchange Rate Gold Brent Crude Oil Lending Deposit USD/EGP USD/ounce USD/barrel 17.75% 16.75% , % -0.24% Source: CBE & Bloomberg COMPANY in a NUTSHELL: MB for Engineering and Contracting (MBEN.CA) COMPANIES SODIC Retreated from Acquisition of Nasr City Housing (Negative) Beltone Reconciled FRA on Compensating those Affected by the Introduction of Sarwa (Positive) Dice Completes 100% Acquisition of Alexandria Clothing (Positive) A Subsidiary of MTI Receives a Microfinance License (Positive) The Prime Minister Approves the Ownership Structure of the Two Companies «Tharwa Insurance» (Positive) VEON Reaffirms Commitment to Addressing Strategic Relationship with GTH (Positive) SECTORS Iron Prices Fall 6.8% in January (Positive) «Industry» Producers Subject to the Criterion «Value Added» (Neutral) «European Development» Considers Lending to «Banque du Caire» USD50mn (Negative) Mulla: Egypt's Gas Production to Increase to 8bn Feet per Day next Year (Positive) 72.3% Decline in Poultry Imports during 2018 (Positive) MACROECONOMICS IMF Managing Director to Approve the Fourth Review for Egypt (Positive) Fuel Subsidy Bill Shrinks 15% in 1H 2018/2019 (Positive) Egypt s External Debt Rises to USD92.6bn by the End of June 2018 (Negative) Non-Oil Exports Rise 10% to USD24.8bn in 2018 (Positive)

2 SODIC Retreated from Acquisition of Nasr City Housing (Negative) Sixth of October Development and Investment SODIC (OCDI.CA) said in a statement that it will not make an obligatory purchase offer to acquire at least 51% of the shares of Medinet Nasr Housing and Development (MNHD.CA) through a direct exchange of shares. B investment Holdings (BINV.CA), owner of Nasr City Housing and Development Company, said in a separate statement that the company's board also decided not to proceed with the deal. This comes despite the approval of the Financial Regulatory Authority (FRA) earlier this month to extend the deadline for SODIC to make a compulsory purchase offer to Nasr City for Housing and Development for two months, so that the company can complete the due diligence examination and study the fair value. (Enterprise) Beltone Reconciled FRA on Compensating those Affected by the Introduction of Sarwa (Positive) The Financial Supervisory Authority (FRA) has approved the reconciliation with Beltone Financial Holding (BTFH.CA) on several terms. The sources said that the settlement of the crisis with the subscribers affected by IPO of Sarwa Capital (SRWA.CA), The board of directors of the latter and the Criminal Proceedings Committee on Reconciliation. It is recalled that Beltone yesterday decided to reconcile with the FRA over the lawsuit filed against them to challenge the penalties signed by the Commission on Beltone arms for promotion and brokerage. (Al Mal Newspaper) Dice Completes 100% Acquisition of Alexandria Clothing (Positive) Dice Sport and Casual Wear Company (DSCW.CA) said in a statement to the Egyptian Stock Exchange that it acquired a 5% stake in the Alexandria group of ready-made garments in a deal worth about EGP2mn to complete the acquisition of 100%, after the acquisition of 95% of them in 2015 in a deal amounted to EGP50mn. (Enterprise)

3 A Subsidiary of MTI Receives a Microfinance License (Positive) FITAS Egypt Microfinance Company, owned by Ebtikar Investment Finance Company (5%) which owned by MM Group For Industry And International Trade (MTIE.CA) by 55% and B- Investment (BINV.CA) by 45%, approved the approval of FRA for the final license to engage in microfinance activity. (Al Borsa Newspaper) The Prime Minister Approves the Ownership Structure of the Two Companies «Tharwa Insurance» (Positive) The Prime Minister approved the ownership structure of the two companies, Tharwa Life and Properties Insurance. The file was sent to the Financial Regulatory Authority (FRA) to take the procedures required to grant final approval before practicing the activity. (Al Mal Newspaper) VEON Reaffirms Commitment to Addressing Strategic Relationship with GTH (Positive) VEON Ltd announces that it remains committed to simplifying its corporate structure, including addressing its strategic relationship with Global Telecom Holding (GTHE.CA). VEON has as yet been unable to obtain the necessary guidance from the Egyptian Financial Regulatory Authority (FRA) to allow it to proceed with taking GTH private. VEON will continue to explore these requirements with the FRA and engage with other stakeholders in order to reach a resolution. GTH announced through its IR Manager that the company has postponed the General Assembly to March waiting for other details. (VEON Release &Al Mal Newspaper)

4 Iron Prices Fall 6.8% in January (Positive) Iron prices fell by 6.8% during the month of January, which recorded a price of EGP11.6k per ton, compared to last December, which reached a price of EGP12.5k. According to a report by the Ministry of Housing's Public Administration for Needs and Building Materials. The ton of iron declined during the 12 months beginning in January 2018 by 2.7%, with a value of EGP12.5k. (Al Mal Newspaper) «Industry» Producers Subject to the Criterion «Value Added» (Neutral) Eng. Amr Nassar, Minister of Industry and Foreign Trade, revealed that the ministry is on its way to convert all the accounts of Egyptian industrial goods from the local component standard to the value added. He said in a statement that the criterion of calculating the proportions of local components in the production process in current figures is inaccurate and prevents the export of a number of industries to foreign markets. He added that the international partnership agreements signed by Egypt with Arab, African and European countries depend on value added criteria to determine the country of origin. (Al Mal Newspaper)

5 «European Development» Considers Lending to «Banque du Caire» USD50mn (Negative) Cairo Bank is conducting intensive negotiations with the European Bank for Reconstruction and Development (IBRD) to borrow about USD50mn, to be used to expand the financing of the SME sector. This comes as part of a package of external financing negotiated by the government bank with a number of international institutions worth up to USD100mn, said Tariq Fayed, Chairman of the Board of Directors at a press conference last September. Sources familiar with the bank said that the European Union for Reconstruction and Development funds will be re-pumped to SME customers, noting that the negotiations are in very advanced stages, and contracts may be signed within the next few days. (Al Mal Newspaper) Mulla: Egypt's Gas Production to Increase to 8bn Feet per Day next Year (Positive) Minister of Petroleum and Mineral Resources Tariq Al-Mulla said that Egypt's production of natural gas will reach about 8bn cubic feet of gas per day during the fiscal year , after the completion and implementation of all gas field development projects during the next phase. These unprecedented quantities as a direct result of the success of the ministry's strategy are supported by the political and economic stability witnessed by Egypt. This came during the Minister's presidency of the General Assembly meeting of Natural Gas Holding Company "EGAS" to approve the planning budget for the fiscal year (Arab Finance)

6 % 72.3 Decline in Poultry Imports during 2018 (Positive) During the last year, poultry imports fell by 72.3% in quantities, driven by higher domestic supply and lower consumer demand, amid stable selling prices in all varieties (live and frozen). Sources in the General Organization for Export and Import Control said that poultry imports this year have fallen to their lowest levels in recent years. The total imports of poultry in 2018 fell by 72.3% to 57.6k tons, compared with 282.3k tons in The figures indicate that the imports decline in 2018 after increasing in 2017 by nearly 108% To reach 282.3k tons compared with 109k tons in 2016». Mona Mahrez, deputy minister of agriculture for livestock affairs, attributed the decline in poultry imports to the increase in the local supply, and considered that the drop in prices locally was a good reason to reduce imports. (Al Borsa Newspaper) IMF Managing Director to Approve the Fourth Review for Egypt (Positive) The Managing Director of the International Monetary Fund (IMF) said that The IMF staff team has now finalized the details required to present the fourth review for Egypt s Extended Fund Facility arrangement to the IMF s Executive Board. The Board will meet in the coming weeks to discuss the review and she will recommend that the Board approve the review. (IMF Release) Fuel Subsidy Bill Shrinks 15% in 1H 2018/2019 (Positive) The Minister of Petroleum said that the cost of fuel subsidies fell by 14.7% during 1H2018/2019, to reach about EGP43.5bn, compared to EGP51bn in the same period last year. The government expects to spend around EGP90bn on petroleum subsidies in the current fiscal year. (Reuters)

7 Egypt s External Debt Rises to USD92.6bn by the End of June 2018 (Negative) The value of Egypt s external debt rose to USD92.6bn by the end of June 2018, or 37% of GDP compared to USD79bn at the end of June (Enterprise) Non-Oil Exports Rise 10% to USD24.8bn in 2018 (Positive) Egypt's non-oil exports rose 10% YoY to reach USD24.8bn, compared with USD22.6bn in (Enterprise)

8 AOLb Research Morning Briefing

9 This report is based on publicly available information. It is not intended as an offer to buy or sell, nor is it a solicitation of an offer to buy or sell the securities mentioned. The information and opinions in this report were prepared by the AOLB Research Department from sources it believed to be reliable at the time of publication. AOLB accepts no liability or legal responsibility for losses or damages incurred from the use of this publication or its contents. AOLB has the right to change opinions expressed in this report without prior notice.

10 Research Department Sally Fawzy Mikhail Head of Research Mostafa Shafie Amal Nada Alaa Ahmed Equity Analyst Equity Analyst Equity Analyst Micheal Armia Head of Technical Analysis Omar Hussein Head of Retail Trading Reham Aboul Atta Head of Institutions desk Moataz Ashmawy Managing Director Laila Tarek El Ghawass Managing Director - Branches LTarek@arabeyaonline.com Commercial Website: Trading Website: For more info, kindly contact us on our hotline 16225