Episode Details

ADIB Egypt offers the best value amongst Egyptian Banking Stocks 

ADIB‘s (FV: EGP70.00, OW) potential has been unleashed after resolving the capital increase issue which has been acting as a key overhang on share price performance. We expect the market price of the stock to rally further on strong fundamentals and solid business operations:
•The bank is able to achieve maintains strong margins above peer group average.
•The bank has the highest provisions coverage and the lowest NPL’s ratio among our coverage universe.
•ADIB is delivering RoE24 north of 30% and is currently trading at 1.0x P/B24, in line with peer group average, and 3.8x P/E24, below peer group average of 4.4x, on expected bottom line growth of 28% in 2024, which is higher than sector average of 17%.

The government has identified some 61 additional state-owned companies that it plans to add to the state’s privatization list and exit via stakes sales to either strategic investors or through EGX offerings. Priority will be given to four main sectors: airports, telecommunications, banking, and insurance.

A high-level delegation from the Egyptian government has arrived in Washington DC to push forward Egypt's almost standstill loan program with the IMF.

The World Bank expects a global slowdown in 2024 with GDP growth dropping to 2.4% from 2.6% in 2023 and 3% in 2022.

The World Bank has downgraded its Egypt growth outlook for the current fiscal year due to the country’s ongoing economic problems. The lender expects real GDP growth to slow to 3.5% in FY23/24, down 0.2% from its last forecast in October. Growth is forecast to accelerate to 3.9% in FY24/25.

The Ministry of Finance targets achieving a primary surplus of 2.5% of annual GDP during the medium term. The ministry also targets reducing debt to GDP to less than 85% by the end of June 2028.

The government aims to launch new international tenders for oil, gas, and gold exploration this year, with a new gold tender slated for the second half of the year.

Egypt’s average daily natural gas production hit 5.8 billion cubic feet per day in 2023. That’s 6.8% less than the 6.2 billion cubic feet produced per day in FY22/23.
 
Prime Minister Moustafa Madbouly ordered the establishment of a ministerial task force to set a plan for increasing the number of skilled workers abroad.

The government is currently looking into reforming laws governing tourism. These include issuing a new law regarding the establishment of a tourism chambers and an adjacent union, a draft law dealing with foreign tourists, and preparing the general framework for a draft law regulating tourism companies.

President El-Sisi has instructed the government to increase spending on improving Egyptians’ quality of life in the upcoming fiscal year 2024/2025, Minister of Finance said.

The government is considering exiting its stake in the Arab International Bank and is in the process of appointing financial advisors to do so. The government is looking into exiting a second unnamed bank at the same time, with local press sources saying that the banking sector is expected to see several deal transactions in 2024.

EGBE’s net profit has increased by 75% over 2023, recording EGP1.5 bn versus EGP845.8 mn in 2022. EGBE is currently trading at P/E24 of 5.3x and P/B24 of 0.9x

Halan, the consumer finance arm of MNT-Halan, has closed an EGP971.5 mn securitized bond issuance, the third and final of an EGP3 bn securitization program, according to a release published by the company.

Local private equity firm Ezdehar Management has purchased above 80% stake in clothing company SETA Textiles, the company which owns clothing brands Dalydress and Premoda, according to local media. The value of the transaction is not disclosed.