Morgan Stanley's Post-Election Expectations

The Clap

Morgan Stanley discussed “What's Next After Elections?”, unveiling their expectations that Egypt will not float the EGP soon.

What

Instead, the American investment bank believes the country will take a more gradual approach, devaluing first to levels below the parallel market.

A gradual/stepped approach would reduce the shock to the economy resulting from a huge exchange rate change, by first devaluing the currency a bit. This would depend on the IMF providing a larger loan package.

So What

While this expectation relies on further support from the IMF and regional partners, it would help contain short term exchange rate fluctuations. This would decrease uncertainty for businesses while still relieving some of the pressure on the country's FX reserves.

Now What

The IMF has already signaled that it will provide more support, both through talks of a bigger relief package as well as prioritizing getting Egypt’s inflation under control.

The Clap

Raya Holding acquired a 27.69% stake in Ostool Transport, bumping up its total stake to 90%.?

What The newly-acquired stake was previously owned by the Egyptian Gulf Holding for Financial Investments.?

The deal’s value wasn’t disclosed as Raya continues its current discrete discussions with potential investors interested in acquiring a stake in Ostool, Ahmed Nour-Eldin, the company’s Chief Investment Officer told Claps.?

So What?

Raya’s stock price increased by 3.38% during Wednesday's trading session.?

Some Context In 2021, Raya was planning to offload its 62.3% stake in Ostool by selling it to Paradigm Logistics for EGP 266.6 million, yet the transaction didn’t go through.

The Clap

The state-owned company Soda Ash wants cash (i.e. borrowing USD 450 million).?

What

The intended loan will be redirected to develop the company's project in Al Alamein, which aims to produce 600K tones of Soda Ash every year, with the project's value estimated at USD 685 million.

Claps Class??

Soda ash (aka sodium carbonate) is a chemical compound that is used in various industries, including glass manufacturing, water treatment, detergents, and food production.

So What Localizing soda ash production will contribute to the localization of various industries and reduce dependency on USD for imports.?

Now What

Sources told Asharq Business that the construction will start next year.