IDA tender a license to manufacture cigarettes

March 22, 2021

EGX 30: 10,918 (-3.0%) weekly change, (+0.7%) YTD
Traded Value 1W Avg: EGP 369M , (-33.5%) below 90D Avg.  
EGP:USD: 15.70 (0.0%) weekly change

Local Pick-ups

Industrial Development Authority tender a license to manufacture cigarettes

IDA has tendered one new license to manufacture both regular & E-cigarettes. Both existing companies & new players are eligible to apply for the license.. Eastern Company would have to own 24% stake of the company that will get the license. The new company will also have to sell popular brands at 50% higher price than Eastern. (Enterprise)

Domty to sign joint venture with FrieslandCampina

Domty signed a joint venture with Dutch food manufacturer FrieslandCampina to export & sell dairy & cheese products to African & Middle East Markets. Domty will own a 49% stake of the project. (Hapi journal)

Porto Group to spend EGP 20B on 3 new residential projects

Porto Group plans to invest around EGP 20B on 3 new residential projects: Golf Porto Cairo, Porto Assiut & Porto Agadir. The Porto Assiut project will be finished within 6 years and will require EGP 4.5B investment. (Hapi Journal)

Other Local Headlines

  • Hikma & GSK Egypt agreed to end the potential acquisition
  • CBE launches an EGP 100B mortgage program
  • Porto Group to establish a new joint venture with Prime group
  • CBE to leave interest rates unchanged at  8.25% for deposit and 9.25% for lending
  • EFG Hermes partners with Universal Group to launch e-commerce platform

Global Pick-up

Uber UK agrees to shift its gig drivers to workers

Uber lost its battle with the UK government as it has to classify their drivers as workers with minimum wage and other labor benefits such as vacation pay & pension plans. In the U.K., there are three designations: self-employed, employed and worker. The “workers” designation doesn’t make them employees, but it still entitles them to the minimum wage, holiday pay and, if eligible, a pension. The news made the share price fall by 4% the following day. (Robinhood Snacks)

Word of the week – EBITDA

EBITDA stands for Earnings before interest, taxes, depreciation & amortization. It is one of the key financial metrics that measures the company’s operational efficiency, as it ignores the non-operating factors such as interest expenses or taxes.

Book of the week – Fooled by randomness

Written by statistician, former trader & risk analyst Nassim Taleb. The book discusses the role of chance & how randomness can fool us in life and markets. It starts with elaborating some cognitive biases we all have such attributing wild successes to only luck & skill while it’s mainly variance & chance. The book then proposes some mental models to deal with those biases & cognitive flaws like thinking probabilistically, being skeptical & imagining alternative histories. (Goodreads)

Earnings Call:

  • EFG Hermes reported EGP 1.3B profit in 2020, a 5.1% YoY decline. 
  • Orascom Development Egypt reported EGP 532.1M profit in 2020, a 22% YoY decline.
  • Faisal Islamic Bank of Egypt reported EGP 2.2B Profits in 2020, a 19.3% YoY decline.
  • Cleopatra Hospital Company reported EGP 286.92M profit  in 2020, a 11.5% YoY increase