Egypt’s budget deficit narrowed to 4.4% in 1H17/18 from 5.0% for the same period in the previous year, with the primary deficit dropping to 0.3% of GDP in 1H17/18 from 1.1% a year earlier, according to the presidency. Total revenue grew c38%, with tax revenue rising c61% in 1H17/18, and subsidies for commodities covered by the ration-card system grew c65% over the same period. (Bloomberg)
Egypt’s annual urban inflation decelerated to 21.9% in December from 26.0% in the previous month, with monthly prices dropping 0.21% from an increase of 0.97% in November, according to data published by the Central Agency for Public Mobilization and Statistics (CAPMAS). Annual core inflation also decelerated to 19.9% in December from 25.5% in the previous month, while monthly core consumer price index (CPI) dropped by 0.37% from an increase of 1.31% in November, data posted on the Central Bank of Egypt (CBE) website showed. (CAPMAS, CBE)
The World Bank expects Egypt’s GDP to grow at 4.5% in FY17/18, with a growth of 4.9% in 2018, 5.6% in 2019, and 5.8% in 2020. (Al Borsa)
The Suez Canal Authority has decided to grant oil tankers heading to Asia from 3 destinations and passing through the Suez Canal a reduction in fees by 45%-75%, according to a statement made on its website. (Al Masry Al Youm)
High-yielding certificates of deposits bearing interest rates of 16% and 20% introduced by the National Bank of Egypt (NBE) and Banque Misr following the EGP floatation have attracted some EGP670bn since their issuance, according to sources at the 2 banks. (Al Alam Al Youm)
An unnamed British investment fund is offering to acquire 100% of Amoun Pharmaceuticals from drug maker Valeant Pharmaceuticals International for USD600m, sources close to the deal revealed. Valeant Pharmaceuticals International has been looking to exit its investment in the company since 2016 after its acquisition for about USD800m, the sources added. (Al Borsa)
Company news
Emaar Misr (EMFD EY, Overweight, TP EGP5.43) | Orascom Construction (ORAS EY, OC DU, Overweight, TP EGP158): Emaar Misr awarded EGP2bn worth of construction contracts to Orascom Construction and Arab Construction Company (ACC) for the construction of phase 1 of Marassi Marina, according to a release made by Emaar Misr. The EGP1.2bn contract with ACC entails constructing 826 fully finished apartments over 92,000 sqm in addition to a commercial and recreational space with an area of 4,500 sqm, while the EGP800m contract with Orascom Construction entails implementing the marina basin, with construction expected to be completed by 2020, it added. (EGX) Our comment: Marassi is the largest component of our Emaar Misr valuation at 33%. The awarded contracts represent c11% of our CAPEX estimate of EGP17.6bn for Marassi Marina. The 92,000 sqm residential area represents c14% of the total residential area in Marassi Marina while the 4,500 sqm retail area represents c12% of the total retail area. We believe the company will internally finance the EGP800m marina basin contract in addition to the commercial and recreational areas, while the apartments are expected to be financed through off-plan sales. The company’s cash balance as of 3Q17 stood at EGP4.29bn, with some other EGP4.91bn in treasuries.
Alexandria Containers and Goods (ALCN EY, Not Rated): Shareholders at the company’s EGM approved increasing its paid-in capital to EGP745m from EGP739m at a fair value of EGP150.65/share (prepared by an independent financial advisor) through public subscription, while waiving preemptive rights. Additionally, shareholders approved amending articles 6 and 7 of the company’s articles of incorporation. (EGX, Al Ahram)
Centamin (CEY LN, Not Rated): The company’s FY17 gold production came in at 544,658 ounces, above the guidance of 544,000 ounces, it said. Additionally, the company is guiding FY18 gold production of 580,000 ounces from the Sukari mine, and forecasts cash cost of production of USD555/ounce and an all-in-sustaining cost of USD770/ounce. (Bloomberg, Reuters)
UAE
Economic and general news
Overall sovereign creditworthiness in the Middle East and North Africa (MENA) region has continued to deteriorate since mid-2017, S&P Global Ratings (S&PGR) said in a recently published report. However, the ratings agency does not expect a significant further deterioration in 2018 because, of the 13 MENA sovereigns it rates, 11 currently have a stable outlook, despite the testing political and economic backdrop, S&PGR said. Of the other 2 sovereign ratings, Egypt has a positive outlook and Qatar has a negative outlook. (Bloomberg)
Emirates airline is talking to banks about raising as much as USD1bn through a sukuk sale that could happen in 1H18, unnamed people familiar with the matter said. (Bloomberg)
Nasdaq Dubai plans to start index futures on the Dubai Financial Market’s DFMGI index and Abu Dhabi Securities Exchange’s ADI index in 1Q18, according to an emailed statement. The exchange is also preparing to create futures on MSCI indices, it stated. Nasdaq Dubai will start single stock futures on GFH Financial Group (GFH UH, GFH KK, Not Rated) starting 16 January, it added. (Bloomberg)
Japan extended a deal to allow Abu Dhabi National Oil Company (ADNOC) to store about 6.29m barrels crude oil there for 2 more years through the end of 2019, the deputy director of the oil supply and reserve policy division at Japan’s Ministry of Economy, Trade, and Industry said by phone. (Bloomberg)
Company news
Abu Dhabi Commercial Bank (ADCB UH, Not Rated): The bank’s unit, ADCB Finance (Cayman), sold 5-year bonds worth CHF175m priced at 44.75 bps over the benchmark midswap rate, according to an unnamed source familiar with the transaction. (Bloomberg)
Emirates REIT (REIT DU, Not Rated): The company plans to pay an interim DPS of USD0.04 for 1H17, it announced. (Reuters)
DP World (DPW DU, Not Rated): The company closed all transactions related to its acquisition of Maritime World, which filly owns Dubai Maritime City and Drydocks World, according to a bourse release. (Nasdaq Dubai)
Union Properties (UPP UH, Not Rated) | Palm Hills Developments (PHDC EY, Overweight, TP EGP5.85): Union Properties acquired a 5.68% in Palm Hills Developments through its fully-owned unit, UPP Capital Investment, it announced. (Reuters)
Depa (DEPA DU, Not Rated): The company has notified the Nasdaq Dubai that intends to convert its listing currency to AED from USD, it announced. Depa expects its conversion to take place prior to 31 March, it added. (Bloomberg)
Qatar
Company news
Qatar National Bank (QNBK QD, Not Rated): The bank sold 30-year Formosa bonds worth USD720m priced to yield 5.15%, according to an unnamed source familiar with the transaction. (Bloomberg)
Qatar Insurance Company (QATI QD, Not Rated): The company’s unit, Qatar Reinsurance, received approval from the Qatar Central Bank and UK regulator to re-open a branch in London and carry out certain regulated activities in the UK. (Reuters)
Saudi Arabia
Economic and general news
The Saudi Tadawul is prepared for Saudi Aramco’s share sale regardless of the structure that the company decides to use for the listing, the exchange’s CEO said. (Bloomberg)
Saudi Aramco is working to secure billions of USD in cheap loans from banks before its IPO, banking and export credit agency (ECA) sources said. Citigroup, Standard Chartered, and Sumitomo Mitsui Banking Corporation were advising on the transactions, which 2 sources said could raise at least USD5bn–USD6bn, all with ECA-backing. (Reuters)
Saudi Arabia’s ACWA Power has invited banks to bid to arrange its IPO, which is expected to value the company at up to USD1bn, unnamed sources said on Wednesday. A request for proposals was sent to foreign and local banks last week, they said. (Reuters)
Kuwait
Economic and general news
Kuwait’s M2 money supply growth accelerated to 2.92% in November from 1.93% y-o-y in the previous month, data posted by the central bank showed. (Bloomberg)
Kuwait’s October total bank assets rose 4.1% y-o-y to KWD62.6bn, according to data posted by the central bank. Total claims on the private sector increased 3.6% y-o-y to KWD37.2bn, and claims on the government rose 58.0% y-o-y to KWD5.03bn, data also showed. (Bloomberg)
The Central Bank of Kuwait’s total foreign assets increased to USD30.2bn in November from USD28.9bn in the previous month, it said in a statement on its website. (Bloomberg)
Company news
National Real Estate (NRE KK, Not Rated): Company CFO Shiv Hiremath has resigned effective 11 January, it announced. (Reuters)
Oman
Economic and general news
Oman sold USD-denominated bonds worth OMR6.5bn launched across 3 tranches, according to an unnamed source familiar with the transaction. The government sold 5-year bonds worth OMR1.25bn priced at 190 bps over US Treasuries, 10-year bonds worth OMR2.5bn priced at 310 bps over, and 30-year bonds worth OMR.2.75bn prices at 395 bps over. (Bloomberg)
Oman’s Ministry of Oil and Gas signed an agreement with Petroleb to explore concession area 57 Al Afif with an area of 2,262 sqkm, state-run Oman News Agency reported. Investment for the concession is estimated at USD20m in the first phase for 3 years, and USD20m–USD40m during the second phase also for 3 years, according to the report. (Bloomberg)
BP has awarded Jacobs Engineering Group a 3-year contract to continue to deliver engineering, procurement, and construction management services in support of phase 2 of the Khazzan tight gas project, it announced. (Bloomberg)
Agenda
Jan 11: Distribution date of Al Baraka Bank’s 0.15:1 stock dividend Jan 11: Distribution date of Egypt Aluminum’s 1:1 stock dividend Jan 11: Distribution date of AMOC’s second DPS installment of EGP0.30 Jan 13: Proce `edings of the lawsuit filed by Banque Misr against Egyptian Iron and Steel Jan 14: End of subscription to Al Rajhi REIT IPO Jan 18: Record date of Pachin’s EGP2.50 DPS for FY16/17 Jan 22: End of trading of Orange Egypt’s capital increase rights Jan 23: Distribution date of Pachin’s first DPS installment of EGP1.50 for FY16/17 Jan 23: End of trading of Export Development Bank’s capital increase rights Jan 24: Suez Bags AGM to reshuffle its board Jan 27: Raya Contact Center’s EGM to approve its ESOP Jan 28: End of subscription to Orange Egypt’s rights issue Jan 29: Mobily 4Q17 earnings release Jan 29: End of subscription to Export Development Bank’s EGP100m rights issue Mar 6: Proceedings of lawsuit against license of third phase of Egyptian Resorts Company’s Sahl Hasheesh plot Mar 15: DP World 4Q17 earnings release Mar 16: Start of voting in Egypt’s presidential elections for Egyptian expats Mar 18: End of voting in Egypt’s presidential elections for Egyptian expats Mar 26: Start of voting in Egypt’s presidential elections for Egyptians living in Egypt Mar 28: End of voting in Egypt’s presidential elections for Egyptians living in Egypt Apr 2: Announcement of the results of the first round of Egypt’s presidential elections Apr 23: Americana to delist from the KSE Apr 30: Distribution date of Pachin’s second DPS installment of EGP1.00 for FY16/17 Apr 30: Distribution date of Heliopolis Housing’s second DPS installment of EGP0.25 May 1: Announcement of the winner of Egypt’s presidential elections May 12: Cairo economic court to look into the case made by AIND’s subsidiary against Groupe PSA for EUR150m
