Today’s Top News & Analysis
Egypt’s budget deficit narrowed to 6% FY23
Islamic index and futures exchange are expected in Q4 2023
HRHO Q2 2023: Strong and diversified
HDBK Q2 2023: A shooting star
TAQA H1 2023: Consolidated earnings drop despite higher top line
Eastern Co. will increase cigarette supply to ease recent market price hikes
MACRO
Egypt’s budget deficit narrowed to 6% FY23
The Cabinet announced that Egypt’s FY23 budget deficit came better than expected at 6% only vs. 6.2% in FY22, whereas the government's preliminary indicator was expected to be 6.1%. (Cabinet)
Islamic index and futures exchange are expected in Q4 2023
The Egyptian Exchange (EGX) is expected to launch a new Shariah-compliant index by October-November 2023 in collaboration with Standard & Poor’s, with 20-25 stocks complying with the index’s guidelines. Meanwhile, the futures exchange is expected to be launched in Q4 2023, but the exact date is yet to be announced. There are ten state-owned and private-sector banks that are in talks with the EGX to become members of the futures exchange’s clearing company. (Enterprise)
CORPORATE
HRHO Q2 2023: Strong and diversified
EFG Holding’s [HRHO] Q2 2023 net income surged 20% y/y to EGP405mn on the back of 51% y/y growth in topline to EGP3.1bn. Revenues came mostly dominated by the Investment Bank platform which grew by a staggering 61% y/y to EGP1.6bn. However, from a quarterly perspective, top line declined by 30% q/q and bottom line declined by 54% q/q. We note the following:
· The Investment Bank platform strong performance came in view of (1) Brokerage revenues increasing by 57% y/y to EGP645mn, (2) private equity revenues increasing 145% y/y to EGP68mn, and (3) asset management revenues increasing by 62% y/y to EGP194mn.
· The NBFS platform growth came at +23% y/y to EGP620mn. Stronger annual performance came due to a massive leap in ValU portfolio and top line, where the consumer finance company recorded a top line of EGP207mn (+193% y/y).
· The Commercial Banking platform’s (i.e. aiBank) bottom line grew 86% y/y to EGP271mn. The bank’s revenues surged by 58% y/y to EGP888mn.
We note that FX gains came in at only EGP75mn this quarter vs. EGP1.1mn in Q1 2023 which explains the q/q drop in bottom line. (Company disclosure)
HDBK Q2 2023: A shooting star
Housing & Development Bank’s [HDBK] Q2 2023 net income increased by 200% y/y to EGP1.7bn (+28% q/q) on the back of a 121% y/y (+22% q/q) increase in net interest income (NII) to EGP2.5bn.
· HDBK’s annualized NIM and ROAE hit unprecedented levels of 11% and 59%, up from 9.2% and 50.5% last quarter, respectively.
· HDBK’s loan book grew by 6% ytd to EGP41bn, equally driven by retail and corporate loans.
· Deposits, however, saw a setback in the quarter to EGP91bn due to a drop in corporate deposits as competition intensified with increasing interest rates. This makes deposits’ growth only 2% ytd and moves the GLDR up to 45%.
HDBK is currently traded at an annualized P/E of 1.7x and a P/BV of 1x. (Bank disclosure)
TAQA H1 2023: Consolidated earnings drop despite higher top line
TAQA Arabia [TAQA] released its unaudited consolidated financial results for H1 2023 showing a 13% y/y decline in net profits to EGP167mn despite higher revenues of EGP6.2bn (+29% y/y, +10% q/q) with a GPM of 11% (same as last year). (Company disclosure)
Eastern Co. will increase cigarette supply to ease recent market price hikes
Eastern Co. [EAST] will offer 7-8mn cigarette boxes to ease the recent price hikes. EAST’s managing director said that there are no expected price increases in the meantime, adding that usually sellers store cigarettes in June and July to make profits after the taxation announcement. (Mubasher)
Key Dates
13-Aug-23
EKHO: BoD meeting / Discussing financial results.
CANA: OGM / Approving increasing the issued capital.
14-Aug-23
ETEL: Financial results Announcement / Q2 2023 financial results' announcement.
16-Aug-23
DOMT: EGM / Amending Articles No. 3 & 4 of the company's bylaws.
RMDA: EGM / Approving increasing the issued capital & amending Articles No. 6 & 7 of the company's bylaws.
17-Aug-23
EGTS: OGM / Approving financial statements ending 31 Dec. 2022.
20-Aug-23
BINV: Cash dividend / Deadline for eligibility for a dividend of USD0.032/Share.
21-Aug-23
BINV: Cash dividend / Ex-dividend date for USD0.032/Share.
23-Aug-23
BINV: Cash dividend / Payment date for a dividend of USD0.032/Share.
MTIE: Stock dividend / Last date for eligibility for a 0.25-for-1 stock dividend.
24-Aug-23
MTIE: Stock dividend / Date for distributing a 0.25 for-1 stock dividend.
27-Aug-23
SPMD: OGM / Approving financial statements ending 31 Dec. 2022.
28-Aug-23
ZMID: Cash dividend / Deadline for eligibility for a dividend of EGP0.150/Share.
30-Aug-23
ORAS: Financial results Announcement / Q2 2023 financial results' announcement.
31-Aug-23
ZMID: Cash dividend / Payment date for a dividend of EGP0.05/share (1st installment).
PHAR: Cash dividend / Payment date for a dividend of EGP1.00/share (2nd installment).
1-Sep-23
MSCI / MSCI's August 2023 Quarterly Index Review Effective Date.
5-Sep-23
Egypt PMI / August 2023 reading.
6-Sep-23
ELSH: OGM / Approving the decisions of the company’s board of directors in its meeting held on 15/6/2023.
ELSH: EGM / Amending some articles of the Company's bylaws.