Monday, 19 October 2020

It’s just another manic Monday (with apologies to The Bangles)


What We’re Tracking Today

Good morning, friends, and welcome to a typically slow (but not dull) Monday, which oddly enough is usually the slowest news morning of the week.

Today is a good day to: Take stock. Not inventory, but metaphysical stock about how you’re doing seven months into this WFH thing, whether you’re fully at home, on some kind of home-office-home rotation, or back in the bullpen but dealing with the fact that half your counterparties are WFH. About 85% of people want flexibility on working from home when the pandemic ends, Pilita Clark reminds us. The Financial Times’ office life columnist recently (and briefly) ventured back into the newsroom and found that she was ready to say “good riddance to a lot of what I thought was normal life” — starting with commutes.

The WSJ is also feeling the WFH angst, writing in What people really love (and hate) about remote work that “Seven months into the pandemic, many professionals say they like flexible schedules—‘I actually eat real food now’—but miss colleagues and clients and cite frustrations such as Zoom fatigue.” So. Much. Zoom. Fatigue.

A word to the wise: Even as companies like Microsoft allow workers to WFH permanently, don’t expect your employer to pay for lots of expenses.

Meanwhile: ‘Tis the season. College application season, that is. If you have a graduating senior in your household — particularly one bound for the US of A — you could do worse than to read Applying to college during covid: What parents and students should know, courtesy of the WSJ.

TODAY’S LEADING INDICATOR: Egypt is not the only economy set to do pretty well this year (the subject of our lead story in this morning’s Speed Round). Data out just before dispatch time this morning shows that China’s economy grew 4.9% in 3Q compared to the same quarter last year, underscoring the speed of its recovery from covid-19.

PSA- You can expect some light rainfall in Cairo on Wednesday that could turn into heavier showers over the weekend, the Egyptian Meteorological Authority said yesterday (pdf). Expect temperatures in the 30-32°C range from today until Wednesday, with temperatures set to fall to 25-28°C once the rainy days begin.

The Senate now has its first speaker after former chief justice of the Supreme Constitutional Court Abdel Wahab Abdel Razek — now the leader of the populist Mostaqbal Watan part — was elected by acclamation in yesterday’s inaugural session, according to Al Shorouk. Abdel Razek presided over the court between 2016 and 2018, succeeding former interim president Adly Mansour. El Wafd Party chairman Bahaa Abu Shouka was voted in as first deputy speaker and the Republican People's Party’s Phoebe Fawzi was tapped to serve as second deputy.

The Senate is now in recess until 29 November and plans to finalize a set of internal bylaws within one month, reports Masrawy.

Voters are heading to the polls to elect a new House of Representatives this week, with expats set to kick off the multi-stage process on Wednesday. The first wave of voters at home will go to polling stations this coming Saturday (24 October).

Not sure how to vote from abroad? Voters need to register on the National Elections Authority’s website ahead of casting their ballots, El Siyassa magazine’s deputy editor Aboul Fadl El Asnawy told El Hekaya’s Amr Adib (watch, runtime: 7:59).

The semi-virtual Cairo Water Week kicked off yesterday and runs through Thursday, according to a cabinet statement. The annual event will be held under the slogan “Water Security for Peace and Development in Arid Regions.” We have more on the first day of the event in Last Night’s Talk Shows, below.

Furniture expo Le Marché begins this Thursday, 22 October and will run until Sunday, 25 October at the Egypt International Exhibition Center.

KUDOS- CIB has been named the Best Emerging Markets Bank in 2020 and Egypt’s Best Bank by Global Finance for its role in helping lead the “digital banking transformation in Egypt, using technological innovation to drive financial inclusion … and acting as a bridge for trade between Egypt and Sub-Saharan Africa.” The bank got a pat on the back for its acquisition of a majority stake in Kenya-based Mayfair Bank. It’s the third time in four years that CIB has taken home an award as the top bank in emerging markets and its second such nod from Global Finance.

The Health Ministry reported 127 new covid-19 infections yesterday, down from 138 the day before. Egypt has now disclosed a total of 105,424 confirmed cases of covid-19. The ministry also reported 11 new deaths, bringing the country’s total death toll to 6,120. We now have a total of 98,247 confirmed cases that have fully recovered.

The first EasyJet flight to Sharm El Sheikh in more than four years touched down yesterday, cabinet said in a statement. The UK budget carrier will operate weekly flights until the end of October before increasing them next month. Prior to the pandemic, EasyJet was scheduled to re-launch flights to Sharm in June for the first time since the UK placed a ban on direct flights to the Red Sea resort town following the downing of the Russian Metrojet in October 2015.

Europe may be looking at a double-dip recession as countries across the continent move to reinstate lockdown restrictions amid record infection rates, the Financial Times reports. Germany, France, the UK, Italy, Spain and the Netherlands have all placed various restrictions on movement in the past week, leading Allianz economist Katharina Utermöhl to predict a return to contraction in 4Q, possibly followed by a recession in the new year.


This morning on Planet ESG:

“ESG is coming for emerging markets”: Or, at least the PR department at one of the world’s top performing EM bond funds would have you think: Candriam’s USD 1.5 bn fund is blacklisting Saudi Arabia, Russia and China for what it says is their poor environmental, social and governance record. The fund has beaten more than 90% of its competitors over the past three years — and excludes the bottom 25% of countries on its ESG ranking. (Bloomberg)

This comes as new EU rules and investor interest suggest that ESG funds could outnumber conventional funds by 2025. (Financial Times)

But Mark Cuban isn’t so worried about ESG… The bn’aire Wall Street investor last week brushed off criticisms of China’s treatment of the Uighurs, telling Fox that he’s “OK with doing business with China.” In past months the US financial sector has stepped up its operations in China as Beijing loosens regulations on foreign investment. (Fox News)

So is it really a surprise that gender diversity is also taking a backseat in investment decisions? Less than half of fund managers take gender diversity into account when screening companies, despite the industry’s vocal support for increasing the number of women at the top of the corporate world. (Financial Times)

Tech stocks are taking over the S&P: Tech companies are on course to finish 2020 with their greatest ever share of the US stock market, surpassing the peak of the dot-com boom at the turn of the century, the Wall Street Journal reports. Tech now accounts for almost 40% of the S&P 500, topping the 37% achieved in 1999, while the big five (Apple, Alphabet, Microsoft, Facebook and Amazon) hold a 25% share of the index. With a market cap of more than USD 2 tn, Apple alone accounts for more than 7% of the index.

And some are beginning to get concerned about tech’s dominance, with analysts recently recommending investors diversify out of tech on fears of overextension and new regulations, Reuters reports. Societe Generale analysts warned that the growing calls for antitrust action in the US could hit tech stocks while UBS suggested moving into sectors more sensitive to an economic recovery, as well as EM value stocks and UK-based equities.

US ELECTION WATCH- Joe Biden and Donald Trump are taking their campaigns to swing states in the final weeks leading up to the elections, with both candidates courting voters yesterday in Nevada and North Carolina, according to Reuters. Biden leaned largely on criticizing Trump’s handling of the covid-19 outbreak as new cases are rising at record rates across the country.

The two candidates are also going head-to-head in the final presidential debate this Thursday in Florida.


*** It’s Blackboard day: We have our weekly look at the business of education in Egypt, from pre-K through the highest reaches of higher ed. Blackboard appears every Monday in Enterprise in the place of our traditional industry news roundups.

In today’s issue: We look at how banks are looking to make their education loan offerings more attractive to parents struggling to keep up with K-12 tuition payments.

Enterprise+: Last Night’s Talk Shows

No single topic led the conversation on the airwaves yesterday, leaving the talking heads to diversify their agendas.

The Grand Ethiopian Renaissance Dam featured heavily in Prime Minister Moustafa Madbouly’s keynote speech on the opening day of Cairo Water Week yesterday, wherein the PM reiterated the necessity of reaching a binding legal agreement on the framework for filling and operating the dam, Al Hayah Al Youm’s Lobna Assal noted. Madbouly called on technical experts to share their recommendations for the negotiations with Sudan and Ethiopia based on precedents set by other issues pertaining to share water supplies (watch, runtime: 2:07). The dam is expected to be the topic of further discussions at the conference but there are no new developments in Egypt’s discussions with Sudan and Ethiopia, Irrigation Ministry spokesperson Mohamed El Sibai told Assal. El Sibai also noted the ministry will honor farmers who have been using modern irrigation methods to rationalize water at the conference (watch, runtime: 5:30).

No new covid-19 cases have been reported among students of public and national schools and universities, whose academic year began on Saturday, Education Minister Tarek Shawki told Ala Mas’ouleety’s Ahmed Moussa. Shawki reiterated that there are strict precautionary measures in place at all schools and that, while schools are proceeding with a hybrid learning model, this plan could change if any “emergency” crops up (watch, runtime: 11:18).

Egypt Post’s ongoing facelift: The government has been working to upgrade Egypt Post’s branches and offices across the country and will then move on to developing the post office’s services, CIT Minister Amr Talaat told El Hekaya’s Amr Adib. The ministry is looking to make Egypt Post an outlet for government services such as issuing subsidy ration cards, registry services, and traffic department services such as renewing car and driving licenses — all of which are currently available online, Talaat noted (watch, runtime: 2:37).

State-owned Nisr Tires is manufacturing more tires here at home, Public Enterprises Minister Hisham Tawfik told 90 Minutes’ Osama Kamal in a lengthy interview that covered the ministry’s plans for all companies under its purview. According to the minister, Nisr Tires is working with the Arab Organization for Industrialization and the Military Production Ministry to manufacture more tires for heavy machinery and passenger cars at two factories. The first phase of the plan is to manufacture five mn tires and eventually reach 7.7 mn tires per year, which is around half of Egypt’s tire consumption needs (watch, runtime: 3:53). Tawfik also discussed the ministry’s EV production plans (watch, runtime: 7:35) and how the ministry is repurposing the defunct El Nasr for Export & Import as a marketing arm for public and private sector manufacturers looking to export their wares, including by creating an electronic catalog (watch, runtime: 3:47). You can catch the full interview here (watch, runtime: 1:53:40).

Speed Round

NOSTRADAMUS AGREES: Egypt’s economy will finish the year having grown 3.5%. That’s our takeaway after Fitch said in a recent report that it sees the economy growing at a 3.5% clip this year, adding its projection to similar forecasts from the International Monetary Fund (which recently revised upwards its 2020 growth projections to 3.5% from the 2% it forecast in June) as well as Deutsche Bank (where the projection is 3.5% growth spanning FY2020-2021). For color: European Bank for Reconstruction and Development also revised its short-term projections for Egypt, predicting economic growth of 5% in 2021 and 2% in 2020, making Egypt “the only economy across all of the EBRD regions likely to escape recession in the 2020 calendar year.”

Inflation to pick up in the final quarter: Fitch said in a separate report it expects core inflation to increase from the current 3.3% to 5.3% by the end of the year. Inflation has been on a downward trajectory for much of this year. The headline rate rose last month for the first time since May but at 3.7% remains close to record lows. The central bank’s 50 bps rate cut last month may help to stimulate inflation in the remaining months of the year.

Pickup in price growth + risk of global market volatility mean rates are staying put this year: Fitch’s “core view” remains that the Central Bank of Egypt (CBE) will keep rates on hold through the end of 2020, even though lower-than-expected inflation figures “could conceivably prompt the IMF to push for further interest rate cuts.” Fitch also anticipates a fresh bout of volatility in global financial markets, which could help pressure investors to sell out of emerging markets. With FX inflows from tourism and the Suez Canal dipping because of the pandemic, Fitch says any liquidity crunch would give the CBE further impetus to keep rates steady. The report notes that there nonetheless remains space for further monetary easing this year, considering Egypt’s real interest rates “are still the most attractive globally.”

Expect to see 50 bps-worth of rate cuts in 2021, particularly as inflation figures should remain relatively muted next year, Fitch says. “Indeed, while recovering economic activity will fuel demand-pull pressures to some extent … cost-push pressures will be contained in the absence of major further subsidy cuts.”

The EGP may dip against the USD: Fitch also predicts the EGP will come under a bit of pressure to hit EGP 16.25 against the greenback by the end of the year, amounting to a 3.9% slide from the current 15.64 EGP-USD rate.


Five environmentally-friendly projects have been earmarked to receive USD 500 mn of the proceeds from last month’s USD 750 mn sovereign green bond issuance, Environment Minister Yasmine Fouad said in a statement. The minister didn’t disclose the specific projects but said they are situated in the transport, water and waste-management sectors, and were chosen from a longlist of 41. The remaining USD 250 mn of the issuance will go towards other projects from the longlist, the statement said without disclosing how many projects would receive funding. The projects were chosen based on their environmental impact indicators, as well as the size of their budgets. The World Bank is consulting the government on the allocation of funds from the sale.

Background: Egypt’s first green bond issuance was 5x oversubscribed, receiving USD 3.7 bn in offers and netting USD 750 mn in sales. The five-year notes carry a 5.2% yield and were listed on the London Stock Exchange last week, where they will be traded on the Sustainable Bonds Market along with 240 others from more than 60 countries. The offering is part of Egypt’s debt diversification strategy, which sees the government focusing on offering longer-term debt, which it hopes will constitute 52% of the nation’s borrowing by 2022.

INVESTMENT WATCH- Egypt is currently negotiating with foreign investors on new wind and solar projects that will generate a combined 2 GW of power, Electricity Minister Mohamed Shaker said on Thursday, CNBC Arabia reports. Speaking at the inauguration of Siemens Energy’s training academy and service center at the Suez Canal Economic Zone, Shaker said that the negotiations for the projects, which will raise the total electricity generated from renewables in the country to 6 GW, will conclude before the end of the year.

Watch this space: The ministry might soon ink an agreement with Siemens Energy to establish a 500 MW capacity wind power plant before the end of the year, according to local press reports.

The ministry will propose amendments to the country’s energy strategy that will see renewables generating 60% of the country’s electricity by 2035, rather than 42% as outlined in the current strategy, Shaker said. The amendments will be submitted to the Egyptian Supreme Council of Energy for approval.

We already have a surplus of energy: Shouldn’t the focus be on upgrading our transmission and distribution network? We covered the oversupply problem in our weekly infrastructure vertical Hardhat earlier this year, and followed up with a three-part series examining our ailing distribution network (Part 1 | Part 2 | Part 3).

INVESTMENT WATCH- US-based venture capitalist Openner is planning to invest USD 5 mn in Egyptian startups over the next two years, general partner Ash Rofael told Hapi Journal. Openner will be looking to purchase stakes of 8-10% in up to 50 companies, with an eye to unlock their growth potential in cooperation with government bodies including the ICT Ministry’s ITIDA and several private institutions, Rofael said. The company also plans to take part in conferences and expos in Egypt including November’s Cairo ICT.

INVESTMENT WATCH- FinMin pitches investment strategy, improving economic landscape to investors: Egypt is prioritizing investments in the transport, oil and gas, renewable energy, and manufacturing sectors, Finance Minister Mohamed Maait said in separate meetings with senior representatives from HSBC and Standard Chartered and unnamed foreign investors, according to a ministry statement. Authorities also aim to increase exports, step up SMEs support, and encourage private sector participation, the minister added while drumming up interest for investing in Egypt. Maait and Vice Minister of Finance Minister Ahmed Kouchouk recapped last fiscal year’s growth figures, which came in at close to 3.6% despite the pandemic, the latest unemployment and inflation trend, and the ministry’s debt diversification strategy. The talks were organized by Bank of America as part of the IMF and World Bank’s virtual annual meetings.

M&A WATCH- Blom Bank’s sale of its Egypt arm could be completed in November, with offers from Emirates NBD and Bahrain’s Bank ABC expected within “days,” Al Masry Al Youm reports, citing sources with knowledge of the transaction. Emirates NBD completed due diligence last week while Bank ABC is expected to follow suit in the next few days. Emirates NBD reportedly valued Blom Egypt at EGP 6.5-7 bn prior to due diligence. The Lebanese bank announced in August it was looking to sell its Egypt unit in response to the economic crisis roiling its home country. Blom bank has tapped CI Capital to advise on the sale, while HSBC is advising Bank ABC.

M&A WATCH- Ezdehar’s Nile Aluminum and Metals Company (AluNile) is eyeing stakes in other building materials companies and could start acquisition talks in early 2021, Ezdehar Managing Director Emad Barsoum told the local press, giving no further details. He added that the company — which manufacturers integrated aluminum and glass systems — is currently deciding between Sixth of October and Sadat City for the location of its new EGP 50 mn factory.

Background: Ezdehar acquired an undisclosed stake in AluNile in 2017 before offloading a 30% stake to Kuwaiti investment holding company Ekuity in 2019. At the time, Ekuity CEO Adnan Al Sager said he anticipated scaling up AluNile through geographic expansion and growing its portfolio of products and services. Ezdehar, which plans to launch a new USD 200 mn fund by the end of 2020, has been looking to exit several of its investments over the next six months.

valU, El Gouna school sign tuition payment agreement: EFG Hermes’ consumer finance arm valU has signed an agreement with El Gouna International School (EGIS) to provide tuition payment solutions for the coming academic year, the company said in a press release (pdf). This is the second tuition facilitation partnership valU signed in recent months after the company signed a similar agreement with school operator GEMS. The product is part of covid-era trend that has seen school operators partner with finance companies to ensure parents can keep going. We had more in a recent edition of Blackboard, our weekly dive into the education sector.

CPA goes after schools refusing 25% refund of last year’s bus fees: Three unnamed schools and a private university were referred to the prosecutor’s office for failing to comply with a regulatory decision requiring education and third-party transportation providers to refund 25% of school bus fees paid for the 2019-2020 academic year, the Consumer Protection Agency (CPA) said in a statement cited by Masrawy. CPA Head Ahmed Samir previously said that non-compliance would lead to fines of between EGP 10k and EGP 1 mn, with repeat offenders slapped between EGP 20k and EGP 2 mn.

Samir was on the airwaves last night to explain the move, calling in to tell Hadrat El Mowaten host Sayed Ali that the CPA will disclose the names of the institutions soon (watch, runtime: 1:58).

LEGISLATION WATCH- Changes to the Bankruptcy Act that would give creditors more power to decide the future of bankrupt businesses received approval from the House Legislative Committee yesterday, reports Al Shorouk. The amendments, as they stand, would also allow debtors to request bankruptcy protection, among other things. They should now make their way for a vote at a House plenary session before being signed into law by the president.

MOVES- Yasmine Khamis has been tapped to become Oriental Weavers’ non-executive chairman, replacing Salah Abd El Aziz who will become the company’s executive managing director, Oriental Weavers announced in an EGX filing (pdf). Daughter of the late Mohamed Khamis, Yasmine has served as a board member and C-suite officer at the company, making it onto Forbes’ list of the 100 most powerful businesswomen in the Middle East earlier this year.

KUDOS #2- Helmy, Hamza & Partners were selected as the winner of the IFN Law Awards’ capital markets category, according to a press release (pdf). The Baker McKenzie Cairo office was recognized for its role advising a Talaat Moustafa Group subsidiary in Egypt’s inaugural corporate sukuk issuance last April.

Fawry was fintech before “fintech” was even a word: Fawry founder and CEO Ashraf Sabry is our guest on this week’s episode of Making It, our podcast on how to build a great business here in Egypt. Ashraf tells us how the ultimate “corporate insider” left behind his corner office to start a startup in a field nobody had ever heard of — and how he escaped the jaws of bankruptcy. Today, the company is Egypt’s first listed fintech company as is valued at north of USD 1 bn — and it’s turned itself into a household name in the process.

Tap or click here to listen to the episode on: Our website | Apple Podcast | Google Podcast | Anghami | Omny. We’re also available on Spotify, but only for non-MENA accounts. Subscribe to Making It on your podcatcher of choice here.

*** WE’RE HIRING: We’re looking for smart and talented people to join our team at Enterprise, which produces the newsletter you’re reading right now and Making It, our very first podcast. We offer the chance to work in a unique and casual work environment that promises to be intellectually challenging and rewarding. Enterprise is currently in the market for:

  • A seasoned reporter to join our team and create stories and packages that fascinate and inform our readers.
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Interested in applying? To apply for the editor / reporter positions, please submit your CV along with 2-3 writing samples and a solid cover letter telling us a bit about who you are and why you’re a good fit for our team. The CV is nice, but we’re much more interested in your clips and cover letter. Please submit all applications to


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Egypt in the News

Leading the conversation on Egypt in the international press this morning: The release of comedian Shady Abu Zaid after more than two years in pre-trial detention, the Associated Press reports. Abu Zaid was arrested from his home in 2018 and charged with spreading false news and joining a banned organization. He had been a correspondent for the satirical Abla Fahita show, and produced a youtube show called “The Rich Content.”

Also making the rounds: Al Monitor is out with a twofer on Egypt and Russia’s ties, including their recent joint naval drills in the Black Sea to send a message to Turkey, as well as the multiple agreements Cairo and Moscow have signed to revive Egypt’s railway network and support the Egyptian Railway Authority, which it says suffered EGP 12.3 bn in losses in 2019. The outlet also looks at the success of Egypt’s Serapium Forest, which is spurring more plans to plant trees in the desert to combat climate change. Meanwhile, the Washington Post notes that US Democrats have vowed to take a “different approach” to Egypt’s human right record should Joe Biden be elected president next month.

Diplomacy + Foreign Trade

Topping diplomacy coverage this morning: The Foreign Ministry and Al Azhar condemned Israeli plans for new settlements in the occupied West Bank, joining European and GCC governments who called for an end to illegal construction on Palestinian territory. Israel recently approved the construction of some 5k new houses, bringing the total number approved in 2020 to more than 12k.


How banks are jumping on the need for K-12 tuition financing to expand their loan offerings: Tuition payments at K-12 institutions have long been a source of friction between parents and schools for years, and for multiple reasons. In early 2017 — just a few months after the EGP float — the Education Ministry intervened to place a cap on annual tuition fee hikes at privately-owned international schools after finding they were charging parents “different tuition fees on the USD exchange rate in violation of the law.” Then, with the pandemic, parents raised a ruckus when schools went online and requested a deferment of at least 15% of total 2019-2020 tuition fees and a refund of some services that their children did not receive during the lockdown. They’ve also been requesting relief for the 2020-21 academic year — an issue Education Minister Tarek Shawki says might still need months before being resolved.

We noted back in August how schools have been working with e-payments and e-finance companies to facilitate tuition payments. The banking sector has taken notice and is pushing full speed with products to help parents keep up.

So what’s the solution? Tuition loans. While the product in itself is far from new for the banking sector in Egypt or anywhere else in the world, borrower demand has been low and few banks have bothered pushing the product. Some are now dusting off existing packages, while others are developing new products designed reel in parent borrowers with lower interest rates and more breathable repayment plans. But beyond independently increasing product offerings, banks are also working with CBE to develop a framework by which to make these loans a mainstay, while expanding their retail services, a number of banking execs told Enterprise.

Egypt’s major banks have long had education loans: A quick look at the education loan web pages of some of the biggest names in banking, including CIB, Banque Misr and AAIB show a line up of products that are largely similar in nature. These loans typically range from EGP 2,000 all the way to around EGP 500k. These loans are typically offered at interest rates of 14.50-25%, depending on the income level and occupation of the borrower and the size of the tuition installment payment. That tops credit card interest rate levels at the high end of the range.

To make the prospects of a loan more attractive, some banks, such as CIB, provide discounts on their administrative fees. Others, including the Arab African International Bank, offer to cover 100% of tuition fees and typically require the borrower to pay into a life insurance policy that the bank will hold as collateral. Some in the industry may go as far as holding a lien on an account should the borrower fail to make payments, Industrial Development Bank Chairman Maged Fahmy told Enterprise.

Banks have done little to push the unpopular loans over the past several years, simply because the appetite from parents wasn’t there as a result of the high interest rates, Fahmy tells us. Instead, most borrowers looking for funding to pay school tuition would rather take out a personal loan, which typically carries a lower interest rate, he tells us. Schools, meanwhile, have only seen a handful of parents paying their children's tuition fees through education loans, British International College of Cairo (BICC) Chairman Ahmed Samir Zakaria tells Enterprise.

But since the outbreak of the pandemic, a growing number of banks are looking to push their tuition loan products and tweak them to offer better terms: The Egyptian Arab Land Bank, for example, is considering lowering the interest rate on its education loans from their current rate of 15.75%, Chairman Medhat Kamal told Enterprise, without revealing by how much. He tells us that the bank is looking into also expanding its portfolio of education loans, without revealing by how much.

Meanwhile, 14 banks have reportedly begun offering education loans at lower rates and with longer tenors, according to a survey by Al Mal. Banks, including CIB, AAIB, and the United Bank have begun offering loans with interest rates ranging from 8.5% to 17.5%. CIB and Alexbank are among those now offering eight-year education loans. Up until recently, you would be hard pressed to find loans with tenors that extend beyond five years, Fahmy tells us. AlexBank is even raising the amount it is willing to loan out to EGP 1.5 mn, and even expanding its lineup of borrowers to include those making a monthly income of EGP 1,000.

State banks, who have been providing loans at the strictest terms, have also been facilitating borrowing in support of government education objectives. Parents with children attending the 43 Egyptian-Japanese schools are eligible to apply for eight-month loans from Banque Misr to cover up to 100% of the tuition fees, cabinet said. As part of the package, Banque Misr will be offering life insurance policies at no charge to their customers, according to the statement.

On the demand side, parents are slowly warming up to education loans, but the uptick in demand is not yet strong, BICC’s Zakaria tells Enterprise. But he says that increasing the use of tuition loans would be beneficial for all parties involved — schools would get their fees upfront, thus helping their liquidity, parents would pay the fees over 12 months instead of two, while banks would guarantee better deposits employment, and widen their customer base.

The changing attitude and approach to the loans has also been helped by the CBE’s recent interest rate cuts, Fahmy tells us. He noted that the bank’s education loans portfolio has increased, in part, thanks to these lower rates. The CBE cut interest rates by 50 bps last month — the first since the emergency 300 bps rate cut in March. The CBE’s overnight deposit rate is now at 8.75% and the lending rate is 9.75% — bringing rates to a level that makes borrowing more affordable for Egypt’s under-leveraged consumers.

Now, banks and the CBE are drawing up policies that would make education loans easier to get and expand their retail lending, a banking sector official, who asked not to be named, tells us. These policies include structuring new education loans with easier terms that are offered in conjunction with the schools themselves, the source suggested. The agreements being explored include schools agreeing to freeze tuition increases for the academic years being paid for through an education loan. In exchange, banks would pay the schools the entire tuition for those academic years in a single transaction as parents pay off the bank — think of it as an educational mortgage, if you will.

Private sector growth in education could continue to drive customers towards education loans: It appears to be too early to tell if the change in the banking sector’s attitude towards the education loan is enough to generate strong demand from borrowers, banking officials we spoke with tell us. Nonetheless, they seem undeterred, especially as the private sector education continues to rise. The expansion of international and private schools and universities — which have higher tuition fees than other schools in the country — could be the perfect window for banks to grow their loan portfolio, Fahmy told Enterprise. And while the Education Ministry still enforces a cap of 7% on tuition hikes, tuition is still on the rise, and with it, the necessity of these types of financial solutions.

Your top education stories of the week:

  • PPP: The Education Ministry yesterday launched the second phase of the public-private partnership program, which will see private sector firms collaborate with the government to build 98 language schools.
  • New school year: The 2020-2021 school year kicked off for K-12 students at state schools and students in public universities on Saturday.
  • New education platform: The Education Ministry yesterday launched an integrated electronic platform providing access to a range of educational services to coincide with the start of the new school year.
  • ElSewedy Assiut project: ElSewedy Education has been allocated a 50-feddan land plot in Assiut by the New Urban Communities Authority for an education project.
  • More non-profit universities: President Abdel Fattah El Sisi has directed officials to increase the number of state-run non-profit universities and colleges planned under a government program to 15 nationwide.

The Market Yesterday

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EGP / USD CBE market average: Buy 15.64 | Sell 15.74
EGP / USD at CIB: Buy 15.63 | Sell 15.73
EGP / USD at NBE: Buy 15.65 | Sell 15.75

EGX30 (Sunday): 11,185 (-1.2%)
Turnover: EGP 839 mn (25% below the 90-day average)
EGX 30 year-to-date: -19.9%

THE MARKET ON SUNDAY: The EGX30 ended Sunday’s session down 1.2%. CIB, the index’s heaviest constituent, ended down 1.0%. EGX30’s top performing constituents were GB Auto up 0.7%, CIRA up 0.2%, and Edita up 0.2%. Yesterday’s worst performing stocks were Sodic down 4.0%, EFG Hermes down 3.3% and Sidi Kerir Petrochemicals down 3.3%. The market turnover was EGP 839 mn, and domestic investors were the sole net buyers.

Foreigners: Net Short | EGP -1.0 mn
Regional: Net Short | EGP -9.3 mn
Domestic: Net Long | EGP +10.2 mn

Retail: 87.0% of total trades | 88.3% of buyers | 85.7% of sellers
Institutions: 13.0% of total trades | 11.7% of buyers | 14.3% of sellers

WTI: USD 40.88 (-0.20%)
Brent: USD 42.93 (-0.53%)

Natural Gas: (Nymex, futures prices) USD 2.77MMBtu (-0.77%, November 2020 contract)
Gold: USD 1,906.40 / troy ounce (-0.13%)

TASI: 8,560.81 (+0.08%) (YTD: +2.05%)
ADX: 4,546.95 (-0.16%) (YTD: -10.42%)
DFM: 2,181.22 (-0.61%) (YTD: -21.11%)
KSE Premier Market: 6,314.93 (-0.98%)
QE: 10,009.76 (+0.10%) (YTD: -3.99%)
MSM: 3,602.46 (+0.25%) (YTD: -9.51%)
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18-22 October (Sunday-Thursday): The annual Cairo Water Week event — which will be semi- virtual this year — will be held under the slogan “Water Security for Peace and Development in Arid Regions.”

21-23 October (Wednesday-Friday): Polls open to international voters for first round of Parliamentary elections in Giza, Fayoum, Beni Suef, Minya, Assiut, New Valley, Sohag, Qena, Luxor, Aswan, Red Sea, Alexandria, Beheira, Matrouh.

22-25 October (Thursday-Sunday): Le Marché furniture expo, Egypt International Exhibition Center, Cairo, Egypt.

23-31 October (Friday-Saturday): El Gouna Film Festival, El Gouna, Egypt.

24-25 October (Saturday-Sunday) Polls open for first round of Parliamentary elections in Giza, Fayoum, Beni Suef, Minya, Assiut, New Valley, Sohag, Qena, Luxor, Aswan, Red Sea, Alexandria, Beheira, Matrouh.

29 October (Thursday): Prophet Mohamed’s birthday (TBC), national holiday.

End of October: Last chance to settle building code violations for illegal buildings.

November: Egypt will host simultaneously the International Capital Market Association’s emerging market, and Africa and Middle East meetings.

November: An Egyptian-Russian ministerial committee will meet to discuss trade and investment in Moscow.

2 November: Former Civil Aviation Minister Ahmed Shafik faces retrial at Cairo Court of Appeals in the so-called Aviation Ministry corruption case.

4-5 November (Tuesday-Wednesday): US Federal Open Market Committee will hold its two-day policy meeting to review the interest rate.

4-6 November (Wednesday-Friday): Polls open to international voters for first round of Parliamentary elections in Cairo, Qalyubia, Menofia, Gharbia, Kafr El Sheikh, Sharqia, Damietta, Port Said, Ismailia, Suez, North Sinai and South Sinai.

4-7 November (Wednesday-Saturday): Cityscape Egypt Expo, International Exhibition Center, Cairo.

7-8 November (Saturday-Sunday): Polls open for first round of Parliamentary elections in Cairo, Qalyubia, Menofia, Gharbia, Kafr El Sheikh, Sharqia, Damietta, Port Said, Ismailia, Suez, North Sinai and South Sinai.

12 November (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

13-15 November (Friday-Sunday): A conference on banking in the time of covid by the Union of Arab Banks, Sharm El Sheikh, Egypt.

15 November (Sunday): Egyptian Tax Authority’s online intro seminar on new electronic invoice system for first tranche of companies transitioning to e-filing program.

19-28 November (Thursday-Sunday): Cairo International Film Festival, Cairo Opera House, Egypt.

22-25 November (Sunday-Wednesday): Cairo ICT 2020, Egypt International Exhibition Center, Nasr City, Cairo.

23-24 November (Monday-Tuesday): Reruns for Parliamentary elections in Giza, Fayoum, Beni Suef, Minya, Assiut, New Valley, Sohag, Qena, Luxor, Aswan, Red Sea, Alexandria, Beheira, Matrouh.

30 November (Monday): Final results will be announced for Parliamentary elections held in Giza, Fayoum, Beni Suef, Minya, Assiut, New Valley, Sohag, Qena, Luxor, Aswan, Red Sea, Alexandria, Beheira, Matrouh.

December: The 110th regular session of the Egyptian-Iraqi Joint Higher Committee will be held under the chairmanship of the prime ministers of the two countries.

December: IMF delegation visits Egypt in first of two reviews ahead of disbursement of second tranche of USD 5.2 bn SBA.

1 December (Tuesday): The IMF will conduct a first review of targets set under the USD 5.2 bn standby loan approved in June (proposed date).

5 December (Saturday): A court will hold a postponed hearing to look into an appeal by Syria’s Anataradous against an arbitration ruling in favor of Amer Group and Amer Syria.

7-8 December (Monday-Tuesday): Reruns for Parliamentary elections in Cairo, Qalyubia, Menofia, Gharbia, Kafr El Sheikh, Sharqia, Damietta, Port Said, Ismailia, Suez, North Sinai and South Sinai.

9-10 December (Wednesday-Thursday): BiznEx, the international business expo in Egypt, venue TBD.

14 December (Monday): Final results will be announced for Parliamentary elections held in Cairo, Qalyubia, Menofia, Gharbia, Kafr El Sheikh, Sharqia, Damietta, Port Said, Ismailia, Suez, North Sinai and South Sinai.

15-16 December (Tuesday-Wednesday): US Federal Open Market Committee will hold its two-day policy meeting to review the interest rate.

24 December (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

25 December (Friday): Western Christmas.

1 January 2021 (Friday): New Year’s Day, national holiday.

7 January 2021 (Thursday): Coptic Christmas, national holiday.

13-31 January (Wednesday-Sunday): Egypt will host the 2021 Men’s Handball World Championship at the Giza Pyramids.

25 January 2021 (Monday): 25 January revolution anniversary / Police Day.

25-29 January 2021 (Monday-Friday): The World Economic Forum’s “Davos Dialogues” will take place virtually.

26-28 January (Tuesday-Thursday): Future Investment Initiative, Riyadh, Saudi Arabia.

28 January 2021 (Thursday): National holiday in observance of 25 January revolution anniversary / Police Day.

4 February 2021 (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

6-18 February (Saturday-Thursday): Mid-year school break.

18 March 2021 (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

12 April 2021 (Monday): First day of Ramadan (TBC).

25 April 2021 (Sunday): Sinai Liberation Day.

29 April 2021 (Thursday): National holiday in observance of Sinai Liberation Day.

29 April 2021 (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

3 May 2021 (Monday): Sham El Nessim.

6 May 2021 (Thursday): National holiday in observance of Sham El Nessim.

12-15 May 2021 (Wednesday-Saturday): Eid El Fitr (TBC).

18-21 May 2021 (Tuesday-Friday): The World Economic Forum’s annual meeting will be held under the theme of “The Great Reset” in Lucerne-Bürgenstock, Switzerland

31 May-2 June 2021 (Monday-Wednesday): Egypt Petroleum Show, Egypt International Exhibition Center, Nasr City, Cairo.

1 June 2021 (Tuesday): The IMF will conduct a second review of targets set under the USD 5.2 bn standby loan approved in June 2020 (proposed date).

10 June 2021 (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

24 June 2021 (Thursday): End of the 2020-2021 academic year.

26-29 June 2021 (Saturday-Tuesday): The Big 5 Construct Egypt, Cairo International Convention Center

22 July 2021 (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

30 July-3 August 2021 (Thursday-Monday): Eid Al Adha, national holiday (TBC).

1 October 2021-31 March 2022 (Friday-Thursday): Postponed Expo 2020 Dubai.

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