Going Once, Going Twice

PRIME Research

Mar 26, 2023

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Today’s Top News & Analysis

The Central Bank of Egypt extended two deposits valued at USD2.7bn
New USD2bn Chinese cast-iron pipes and steel manufacturing project in Ain Sokhna
Egyptian customs exempts some drugs’ raw materials from VAT
PACHIN's bidding war continues; higher offers expected
SODIC's negotiations to acquire Orascom Real Estate stopped
MICH’s BoD approved 2023/24 Budget
AT Lease’s OGM approves distributing EGP0.42/share

Macro

The Central Bank of Egypt extended two deposits valued at USD2.7bn

The Central Bank of Egypt (CBE) announced the extension of two deposits from the UAE and Kuwait valued at USD2.7bn. The first deposit, valued at USD2bn, from Kuwait has been extended to September 2023, while the second, valued at USD658mn, from the UAE has been extended to August 2027. (Al-Mal)

New USD2bn Chinese cast-iron pipes and steel manufacturing project in Ain Sokhna

China’s Xinxing Ductile Iron Pipes intends to invest USD2bn in a cast-iron pipes and steel manufacturing plant in the China-Egypt TEDA Suez Economic and Trade Cooperation Zone in Ain Sokhna. The project will encompass a total area of 1.7mn sqm and a total annual production value of USD2.6bn:

(1) The first phase will focus on cast-iron pipes production with a production capacity of 250,000 tons/year, an annual production value of USD1.2bn, costing c.USD150mn and covering an area of 250,000 sqm.

(2) The second phase will focus on steel manufacturing with a production capacity of 2mn tons/year, an annual production value of USD1.4bn, costing c.USD1.8bn and covering an area of 1.45mn sqm. (Cabinet Statement)

Egyptian customs exempts some drugs’ raw materials from VAT

The Egyptian customs exempted some drugs’ raw materials from the value-added tax (VAT) for 56 companies. The exemption came as a result of the Egyptian Drug Authority's (EDA) decisions and was applied in mid-March. (Egyptian Customs)

Corporate

PACHIN's bidding war continues; higher offers expected

National Paints Holding (NPH) upped its offer to acquire Paints & Chemical Industries (PACHIN) [PACH] at EGP36/share. This makes NPH the highest bidder on the table, followed by Eagles Chemicals’ offer at EGP35/share. Moreover, media sources have reported that Compass Capital may be looking to up its offer from EGP30/share. (Al-Mal)

SODIC's negotiations to acquire Orascom Real Estate stopped

Orascom Development Egypt [ORHD] said that negotiations with SODIC [OCDI] to acquire its 70%-owned Orascom Real Estate have stopped. We note that SODIC had offered to acquire 100% of Orascom Real Estate, the owner of O-West project in West Cairo, for EGP2.5bn. (Al-Mal)

MICH’s BoD approved 2023/24 Budget

Misr Chemical Industries Co.’s [MICH] BoD approved 2023/24 budget, projecting a net income of EGP240mn on revenues of EGP760mn. The 2022/23 budget had projected for the company to generate a net income of EGP121mn. We note that MICH’s H1 2022/23 figures have so far eclipsed its full-year expectations, with a net income of EGP280mn. (Company disclosure: 1, 2)