The shares of EGYTRANS witnessed a movement of buying and selling from its shareholders, as Adcom sold part of its share in the capital, which was bought by the shareholder of the company, Mohamed Ashraf Omar and his associated group
For our top talks today, first, the shares of the Egyptian Company for Transportation Services “EGYTRANS” witnessed a movement of buying and selling from its shareholders, as the Advanced Projects and Systems Company – Adcom sold part of its share in the capital, which was bought by the shareholder of the company, Mohamed Ashraf Omar and his associated group. Adcom reduced its stake in (EGYTRANS) shares from 5.48% to 1.15%. In return, shareholder Mohamed Ashraf Omar raised his stake and his related group from 16.22% to 20.55% by buying the stake sold on Sunday. The deal was executed on 1.350 million shares, at a price of 12.99 EGP per share, with a total value of 17.53 million EGP. (EGX)
- Second, Edita Food Industries (EFID) decided to rebrand its Twinkies line of filled cakes. The rebranding step falls in line with the company’s efforts to enhance its packaging and to consistently stimulate demand across its existing segments.
Separately, Edita is also launching upsized Twinkies SKUs priced at a higher price point of EGP 3.00 per pack, capitalizing on its leadership in the filled cakes segment. The new product is scheduled to be launched in November. It is noteworthy that Edita recently raised the prices of some of the Molto brand's products, due to the growth in commodity prices on global stock exchanges. Edita's latest half-year results showed an increase in sales to 2.3 billion EGP during the six months ending last June, compared to 1.7 billion EGP in the comparable period of 2020. (Arab Finance)
- Also, Menna Shams El-Din, Director of Investor Relations at Edita Food Industries, revealed that all the equipment for her factory in Morocco has been completed, and that operation and production will start within days.
The operation includes one production line, which was installed for “Hohos” cake, with a capacity of 2.7 thousand tons per year. The Edita plant in Morocco includes 4 production lines, and that the other three will be added in later stages. It is worthy to mention that Morocco's production of cake amounts to only 100 million USD, which makes it an opportunity for Edita to gain a good market share during the coming period. (Al-Mal)
- Equally important, Heliopolis Housing and Development (HHD) (HELI) plans to issue discounted cheques worth 326 million EGP related to finance the renovation of New Heliopolis.
Currently, HHD is in talks with three banks regarding the issuance of the discounted cheques, which will be decided by November. In addition, HHD will pump 800-850 million EGP that will be mostly utilized in renovating New Heliopolis. (Al Borsa News)
- Moreover, Misr Insurance Holdings has bid for 40% of the shares that Ghazl El Mahalla Football Club will offer to institutional investors in its upcoming initial public offering (IPO).
The state-owned giant has subscribed to 15 million EGP worth of shares on offer in the 37 million EGP private placement. The private placement portion of the sale is set to go through in November. The sale is expected to raise 135 million EGP, which would be done via newly-issued shares that would see up to two-thirds of the club listed on the exchange. Another 98 million EGP will be earmarked for sale to individual retail investors. (Hapi Journal)
- In addition, the “financial group” grabbed the top spot in the brokerage companies’ ranking from January to October 2021, with executed trades worth 85.929 billion pounds, with a market share of 11.3%.
“CIB” came in second place in the rankings for the period from January to October 2021, with transactions worth 73.011 billion pounds, with a market share of 9.6%. And “Hermes” ranked third in the brokerage companies’ ranking from January until the end of last October, as it carried out transactions worth 57.751 billion pounds, with a market share of 7.6%. (Al-Mal)
- And for our COVID-19 vaccine watch, Egypt has received its first shipment of Moderna vaccines with a total of 784,000 doses. The vaccines were donated by Canada under the GAVI/Covax program.
Accordingly, Egypt is now offering Sinovac, Sinopharm, AstraZeneca, Sputnik, Johnson & Johnson, Pfizer, and Moderna vaccines. Earlier, Egypt received 3.6 million doses of Pfizer vaccine under the Gavi / Covax program from the US. The ministry has administered 38 million vaccines since it began its rollout in January. It has received a total of 72 million doses, giving it a supply of 34 million spare doses. The ministry is expecting to up its supply by an additional 26 million doses of Pfizer, Moderna, Sinovac, Johnson & Johnson and AstraZeneca vaccines. (Egypt Ministry of Health & Population)
- Moving to our macro talks, first, Saudi Arabia has deposited 3 billion USD at the Central Bank of Egypt (CBE) to shore up Egypt’s foreign reserves. The new fund will help Egypt to overcome the effects of the pandemic and shore up mainly its foreign reserves.
Additionally, the kingdom has extended the maturity of 2.3 billion USD worth of existing deposits. Egypt has recovered around half of the reserves it spent during the height of the COVID-19 market panic last year. The stockpile has gradually inched up in 2021, reaching 40.8 billion USD in September after having fallen almost 10 billion USD between March and May last year to 36 billion USD. The Saudi funds will put Egypt a lot closer reaching the pre-pandemic peak of 45.5 billion USD. (Saudi Press Agency)
- Second, the Egyptian government is studying proposals to liberalize gas prices for factories. Accordingly, factories could see a price change every 3-4 months.
Policymakers are considering extending the automatic pricing mechanism currently in place for petroleum products to gas supplied to the industrial sector. Earlier, the Egyptian government has raised gas prices for factories by up to 28% as global gas prices remain elevated. Cement, iron and steel, and petrochemicals and fertilizers producers will now pay USD 5.75 / mmBtu, up from USD 4.5 / mmBtu. Gas prices for other industries will rise 21% to USD 4.75 / mmBtu. (Egypt Ministry of Petroleum and Mineral Resources)
- With this in mind, we need to mention that Iron prices in Egypt jump 4 times in 15 years. The price of iron increased from December 2007 until the end of October 2021, with a value of up to 11,652 EGP per ton.
The price of iron in the local market jumped by up to 303%, bringing its average price to 15.5 thousand pounds per ton. The movement of fuel prices and the liberalization of its price in conjunction with the economic reform policies announced by the government had an impact on the rise in its price. We need to mention that Egypt ranked first in the Arab world, and 19 globally in the list of the largest iron-producing countries in the world at the end of 2020. Egypt’s iron production rose in 2020 to 13.4%, despite the negative repercussions of Corona. Egypt's production of iron jumped to 8.2 million tons, compared to the production rates in 2019, which recorded 7.3 million ton. (Central Agency for Public Mobilization and Statistics (CAPMAS) & Al-Mal)
- Given those points, we believe the EGX will witness bearish movements in the market, as a result of the effects of the government’s decision to raise gas prices for cement, iron, and fertilizer factories.
The financial market will be negatively affected in the short term, which will lead to increased costs for companies, pointing out that this decision will be reflected in the business results in the first quarter of the next year. However, the impact of the decision could be as well uneven on companies, according to the flexibility of demand for their final product, and their ability to pass price increases on their products. Iron and cement companies have the ability to pass the price increases they witnessed, in light of the construction boom that Egypt is witnessing, led by government investments. (Zilla Capital)
- And finally, for our top talk abroad, manufacturing activity in China shrank for a second straight month in October, as the fallout from the country’s property sector downturn and energy shortages spreads through the world’s second-biggest economy.
China’s manufacturing purchasing managers’ index was 49.2 in October, below the 50-point threshold that indicates expansion rather than contraction, official data showed on Sunday. The PMI data mark the latest sign of a worsening economic slowdown as weakening property construction activity and high commodity prices hit industry. Moreover, “inflationary pressures continued to escalate” as price rises accelerated for industrial inputs including petroleum, coal, chemical materials and metals, Goldman Sachs analysts noted. (Financial Times)
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