1- Today’s Trading Playbook
KEY THEMES
U.S. equities saw notable declines yesterday, where U.S. Treasury yields reached their highest levels since 2018. Investors' jitters about global growth pushed them to avoid growth stocks. Moreover, fears of a more hawkish Fed than previously promised intensified the slippage. Meanwhile, a stronger U.S. dollar and worries about lockdowns in China kept oil prices at bay. Elsewhere, Egypt's annual headline urban inflation accelerated to 13.1% y/y in April, up from 10.5% y/y in March. The reading came above of our expectation of 11%, driven by higher-thanexpected food prices. The annual jump in food & beverage basket in urban Egypt came in at 26%. Meanwhile, monthly inflation recorded 3.3%, also impacted by higher food prices. A collaboration of demand seasonality, higher global commodity prices, and a weaker EGP all fueled April’s readings. Given the situation of the global liquidity map and the underlying inflation drivers, we believe the CBE will need to hike rates this May, where we are not ruling out the possibility of a rate hike in excess of 100bps. Now, on to the top news and analysis for the day.
2- Top News & Analysis
MACRO NEWS
Annual urban headline inflation accelerated to 13.1% y/y in April, up from 10.5% y/y in March.
According to projections in the draft FY23 budget released yesterday, the budget deficit is set to widen.
Energean could sell 8bn cubic meters of natural gas per year to Egypt from a newly-discovered field off the Israeli coast. (Enterprise)
Export Council for Building Materials (ECBM) is looking for alternative opportunities for exporting ceramics and steel to Europe and Africa. (Al-Borsa news)
The Egyptian Drug Authority (EDA) is studying the list of products that drug manufacturers requested to raise their prices. (Al-Mal)
CORPORATE NEWS
Upper Egypt Flour Mills [UEFM] reported audited standalone 9M 2021/2022 results, showing an increase in net profit to EGP83.5mn (+9% y/y). (Company disclosure)
Zahraa El-Maadi Investment [ZMID] executed a deal of 8mn shares through block trading valued at EGP77.68mn. (Mubasher)