Today’s Trading Playbook
KEY THEMES
U.S. equities ended Wednesday sharply lower in light of fears over widespread inflation and a potential global economic slowdown. This took place after Target Corporation [NYSE:TGT] fell more than 26% after reporting Q1 2022, with bottom line below consensus, cutting its guidance on margins, citing ongoing cost pressures. Right now, U.S. equity future indices are slightly lower, with declines hitting Asian equities.
Here at home, we await the MPC meeting result today. As we mentioned yesterday, which we expect the CBE to increase interest rates by 100-150bps. Through this, the CBE will be sending a strong signal to the market, underscoring its ability to (1) bring down inflation to pre-pandemic levels and (2) bring real interest rates back in the positive territory by next year to encourage investment back into the local debt market, thus boosting foreign reserves and supporting the Egyptian pound (EGP). Meanwhile, we expect a cumulative 400-450bps overall move in 2022.
Now, on to the top news and analysis for the day.
Top News & Analysis
MACRO NEWS
Negotiations between Egypt and the IMF for a fresh assistance program are focusing on a “limited” amount of funding, according to CBE governor. (Enterprise)
The Ministry of Electricity will decide on electricity tariffs for 2022/23 within two weeks. (Al-Borsa)
The Consumer Protection Agency will today decide whether to raise the price cap on cars by 5-10%. (Enterprise)
Healthcare startup Doxx, raises a seed funding worth USD1.5mn to fund its digital healthcare platform. (Company disclosure)
CORPORATE NEWS
Orascom Development Egypt [ORHD] has released its Q1 2022 consolidated results with a 5.7% y/y increase in net profit to EGP463.7mn (+360% q/q), while revenue increased 32.3% y/y(-10.3% q/q) to EGP1932mn. (Company disclosure)
Cairo for Investment & Real Estate Development’s [CIRA] could be the first to tap the future flow securitization market. (Enterprise)
ValU, which is a subsidiary of EFG Hermes Holdings [HRHO] is targeting a lending portfolio worth EGP6bn by the end of 2022. Moreover, Majid Al Futtaim holds a partnership with ValU, to provide installment systems. (Al-Mal)
Banque Misr is not intending to issue a higher yield CD other than the 18% p.a. product launched last March. (Arab Finance)