1. Today’s Trading Playbook
KEY THEMES
Asian equities lost some steam, while oil prices weakened as the Chinese government told all firms to suspend manufacturing or have people work remotely in a two-stage lockdown over nine days. Regardless, many expect that risk sentiment will be helped by hopes of progress in Russian-Ukrainian peace talks to be held in Turkey this week, with Ukraine's president saying adopting a neutral status as part of a deal is possible.
Here at home, the EGX 30 slid yesterday, with notable declines over GB Auto [AUTO] and MM Group [MTIE]. It's unclear precisely what's behind the massive sell-offs in both names, yet it could be the perception that the recent EGP depreciation and higher interest rates may dent their profitability. We note that foreign investors are still net sellers as they have been since the EGP started depreciating on 21 March.
Now, on to the top news and analysis for the day.
2. Top News & Analysis
MACRO NEWS
The budget deficit rose slightly to 5.15% of GDP in M8 FY22, compared to 5% in the same period of the previous fiscal year, under pressure from the increase in expenditures. (Economy Plus)
The Ministry of Trade prepared a list of 131 imported products that can be manufactured locally through private sector factories during the next phase, to reduce the value of imports and deepen local manufacturing. (Economy Plus)
CORPORATE NEWS
GB Auto’s [AUTO] OGM approved a DPS EGP0.35 (an 8% yield), to be distributed in two installments: EGP0.10/share on 21 April and EGP0.25/share on 29 September 2022.Meanwhile, AUTO’s EGM agreed to (1) postpone the write-off of the 8.5mn treasury shares purchased through November and December 2021 pending completion of FRA procedures and (2) cancel its GDR program. (Company disclosure)
Telecom Egypt [ETEL] has signed an agreement with the European Investment Bank, the lending arm of the European Union, to obtain a medium-term loan of EUR150mn with aims to expand its broadband network supporting its fourth generation (4G) services.This move is expected to improve the coverage of its mobile phone network by establishing 2,000 new mobile tower sites and increasing the capacities of existing ones. (Company disclosure)
The Financial Regularity Authority (FRA) said that the number of shares remaining for subscription of the capital increase of Madinet Nasr Housing & Development [MNHD] is 9.04mn instead of 9.35mn shares. (Arab finance)
Egyptian Media Production City (EMPC) [MPRC] appointed Abdel-Fattah Abdel-Moez El-Gabali as the company's chairman and managing director. (Company disclosure)
Egyptian Chemical Industries [EGCH] has used EGP1.23bn of its capital increase proceeds which amounted to EGP1.46bn. EGCH deployed the aforementioned amount in paying back a loan owed to the Holding Co. for Chemical Industries. (Company disclosure)
Al Tawfeek for Financial Lease’s [ATLC] shareholders approved a dividend distribution of EGP0.93/share, an 18% yield. (Mubasher)
Misr Beni Suef Cement’s [MBSC] shareholders approved a dividend distribution ofEGP2/share, a 6% yield. (Mubasher)
GLOBAL NEWS
Two measures of the U.S. Treasury yield curve that are widely watched for recession warnings have veered in opposite directions, raising questions as to what degree central bank bond buying and other technical factors may be distorting the signals on the economy's path. (Reuters)
China's financial hub of Shanghai said on Sunday it would lock down the city in two stages to carry out COVID-19 testing over a nine-day period, after it reported a new daily record for asymptomatic infections. (Reuters)
3. Chart of the Day
Research Team
Source: Bloomberg.
Oil posted its first weekly gain in three weeks as the European Union continued to debate how it can decrease its reliance on Russian exports as Saudi Arabian energy assets came under attack.
4. Markets Performance
