New “Stock of the Week” Feature📈

Last Week’s Market Summary

EGX 30: 10,723 (-0.2%) weekly change, YTD (-1.1%

Traded Value 1W Avg: EGP 459M, (+4.8%) 90D Avg. 

EGP:USD: 15.70 (+0.1%) weekly change

Before we get into last week’s news pickup, we are excited to announce our Thndr Raffle July winner Mohamed El Khafif!🥳 Now’s your chance to enter August’s raffle. Fund your account and grow your portfolio for a chance to win EGP 10,000. The more you grow your portfolio the higher your chances of winning. We’ll be selecting the winner at the end of August. Terms & conditions apply.

Local Pick-up

FRA & EGX Chairmen terms renewed🤝

President El Sisi has renewed the appointment of Dr. Mohammed Omran, chairman of the Financial Regulatory Authority, for one year. While Prime minister Dr. Mostafa Madbouly has renewed the appointment of the current EGX chairman, Dr. Mohamed Farid, for four more years.

In 2017, Mohamed Farid was elected president of the EGX for the first time, taking over from Dr. Mohammed Omran, who then became president of the Financial Regulatory Authority. Coincidingly, Dr. Omran’s term as president of the FRA also came to an end on Friday and was renewed for one year.

CBE leaves interest rates unchanged⚖️

On Thursday the Central Bank of Egypt’s (CBE) Monetary Policy Committee (MPC) decided to keep the overnight deposit and lending rates unchanged at 8.25 percent and 9.25 percent, respectively. The decision is consistent with the inflation target of 7% (±2%) on average by 4Q2022 and price stability over the medium term.

Inflation had risen from 3.4% in May to 3.8% in June and is expected to increase again amid the rising prices of global commodities. International prices for oil and food continue to rise and set new multi-year highs, respectively. The decision should also help maintain Egypt’s carry trade as one of the most attractive in the world, which improves its foreign currency assets.

Growth remains uneven across countries, as the rate of vaccinations varies across countries. The efficacy of vaccines and countries’ abilities to contain the spread of the virus and its new variants are the biggest factors to achieving global economic recovery.

Speed Medical expects to list on Dubai Financial Market by year-end🏥

Speed Medical (SPMD) CEO Mahmoud Lashin explained that SPMD is preparing the documents & requirements to be submitted to the FRA and the Dubai Financial Market (DFM) for the dual-listing process in the DFM.

Lashin expects the legal procedures in Egypt and Dubai to be completed within the coming few weeks, with implementation being as early as the last quarter of this year. Lashin also pointed out that the listing on the DFM is a new stage of the company’s growth and regional presence.

SPMD plans to invest EGP 400 million in 2022, as well as add about 60 branches of medical laboratories under the brand name “Speed Lab”.

Other Local Headlines📰

  • Fawry buys back CIB shares in Fawry plus
  • EGX launches new treasury bonds index 
  • Palm Hills approves credit facility deals with AAIB 
  • El Sisi stresses need to increase price of subsidised bread
  • FRA approves Marseilia’s (MAAL) authorised capital raise request

Global Pick-up

Berkshire Hathaway’s net earnings jump 7%

Berkshire Hathaway’s net profits increased by 7% in the second quarter after many of its owned companies benefited from the economic recovery. The conglomerate disclosed $28.1 billion in earnings.

The company noted that some of its businesses were exceeding pre-pandemic levels. Chairman and CEO Warren Buffet kept buying back Berkshire shares, bringing the quarter total to $6 billion stock repurchases, and the six-month total to $12.6 billion.

“The COVID-19 pandemic adversely affected nearly all of our operations during 2020 and in particular during the second quarter, although the effects varied significantly,” Berkshire said in the earnings report. The company insisted that the risks of the pandemic persist and could impact future results.

Stock of the Week – Export Development Bank of Egypt (EXPA)

Export Development Bank of Egypt (EXPA) is our top factor investing pick for August with a score of 3.94/5.00. With a return on average equity of 19.53%, free cash flow to equity yield of 37.87%, a PEG ratio of 0.16, and an analyst upside potential of more than 50%, EXPA has been featured in all three of our factor investing picks so far.

Word of the week – Exchange-Traded Fund (ETF)

An Exchange Traded Fund holds financial assets such as stocks, bonds, foreign currency, commodities, among other assets. Like a stock, an ETF‘s price fluctuates daily. Some advantages of an ETF include tax efficiency, easy accessibility to markets, and lower transaction fees.

Earnings Call:

  • Egyptian Media Production Company (MPRC) posted a net profit of EGP 87.55 million in Q12021, a 69.45% YoY increase
  • Canal Shipping Agencies (CSAG) posted net profits of EGP 199.15 million for the 2021 fiscal year, a 39% decline YoY
  • Credit Agricole Egypt recorded consolidated net profits for H12021of EGP 767.1 million, a 9.4% YoY increase