Monday, 16 November 2020

Lots and lots of investment news points to optimism about 2021


What We’re Tracking Today

Good morning, friends. We have a ton of investment news for you this morning and a welcome development on the unemployment front. The investment news is particularly encouraging, suggesting to us that for all of our collective grumping and hand-wringing, lots of you — Egyptian and foreigner alike — see opportunity in 2021.

Meanwhile: Plenty of listed companies took earnings to market yesterday, shooting buzzer-beaters on the last day of the season for 3Q. And the pro-government Mostaqbal Watan party swept the second round of the parliamentary elections. We have the rundown on all this and more in this morning’s Speed Round, below.

Have we mentioned, lately, how much we love writing to all of you each morning? It is an honour for us that so many of you choose to start your day with Enterprise. Thank you, everyone.

*** HOW HAS BLENDED LEARNING BEEN TREATING YOU SO FAR? Tell us what you think. We’ve put together a quick survey asking parents and students how things are going on the blended front. We’ll have the results in an upcoming issue of Blackboard. And as is our custom, we’ll draw the names of three respondents who will receive an Enterprise mug and a bag of our favourite coffee from our friends at 30 North.

Tap or click here to take the survey. It’s quick and painless, we promise.

The Health Ministry reported 220 new covid-19 infections yesterday, down from 228 the day before. Egypt has now disclosed a total of 110,767 confirmed cases of covid-19. The ministry also reported 11 new deaths, bringing the country’s total death toll to 6,453. We now have a total of 101,046 confirmed cases that have fully recovered.

Egypt has welcomed over 500k tourists since international flights resumed on 1 July and none have been infected with covid-19, Tourism Minister Khaled El Enany told Ahmed Moussa on Sada El Balad TV on Saturday (watch, runtime: 4:04). Some 3-4k tourists have visited Egypt each day, with arrivals from Eastern Europe partially making up for the absence of visitors from Western Europe, he said.

Emirates airline is taking up the challenge of trying to transport covid-19 vaccines that have a cold chain requirement, such as Pfizer and BioNTech’s vaccine candidate which must be stored at around -70°C. Emirates President Tim Clark told CNBC that the airline has freezers capable of storing the vaccine and is designing containers to transport it on its planes.


The world’s largest trade bloc is now a thing: 15 Asia-Pacific nations yesterday signed the Regional Comprehensive Economic Partnership (RCEP), which covers almost a third of the world’s population and GDP. The pact will gradually reduce import tariffs on more than 65% of goods, and standardize rules governing e-commerce, intellectual property and financial services. RCEP needs to be ratified by at least six Asean nations and three non-Asean states before it comes into force. You can find the details of the agreement here (pdf).

The Greater East Asia Co-Prosperity Sphere, Mark II? RCEP could strengthen China’s commercial ties with its neighbours and cement its position as the region’s (world’s?) economic powerhouse, Reuters suggests. The agreement brings rivals China, Japan and South Korea within the same trading partnership for the first time ever in what Beijing described as a “historic breakthrough.” The US is notable in its absence in both the RCEP and the parallel Trans-Pacific Partnership, which was abandoned by Trump in 2017. Washington now finds itself on the outside of two largest trade groups on earth centered on the world’s fastest-growing region.

GOOD NEWS FOR EGYPT- Yield-hungry investors are piling back into long-term EM debt following months of risk aversion caused by the pandemic, according to Bloomberg. Several factors are influencing the renewed appeal of these bonds. Chief among them are more US policy certainty following the projected Biden win and nearing prospects of a vaccine.

This pivot toward long-term bonds comes as EM governments have been primarily relying on short-term financing, with lenders unwilling to take on long-term positions. It could prove very helpful for EM governments, who could benefit from longer-tenor debt as they’re faced with nearly USD 3 tn-worth of local-currency debt due to mature next year.

This will be music to Egypt’s ears, whose debt diversification strategy aims to shift the country’s borrowing towards longer-tenor debt to drive down its annual debt servicing bill.

Paradoxically, gold prices could continue their bull run into next year. That’s according to Goldman Sachs analysts, who wrote in a note last week that heightened inflation expectations driven by post-covid fiscal stimulus, a weakening greenback and increasing demand for the precious metal in emerging economies will likely send prices higher through 2021.

Meanwhile, Bloomberg’s magic 8-ball is spewing out the words “China” and “emerging markets.” In 2035, China is projected to overtake the US as the world’s largest economy and strongest voice on the political arena, Bloomberg Economics forecasts in a piece interestingly titled An Economist’s Guide to the World in 2050. The rise of China, and perhaps a future India, could see emerging markets overtaking the developed world’s contribution to global GDP by 2042. If you are the proponent of economics as tea-leaf reading, you’ll get a kick out of this read.


WATCH THIS SPACE- The guys who took down Dubai’s NMC Health have some choice words for the investment fad of the year: SPACs. Shortseller Muddy Waters has denounced blank-check companies as a “present-day money grab” in a report explaining why they shorted healthcare company MultiPlan, which went public this year via a SPAC. The popularity of the acquisition vehicles has skyrocketed this year, accounting for around half the money publicly raised in the US, the Financial Times says. Find out more about SPACs in our explainer here.

The world’s super-rich are prepping their bug-out plans and superlux shelters for the end of the world. From expensive tailored medical services, specialist real estate agents and private hideaways, those who can afford it are coughing up for personal services to protect themselves against epidemics and the increasingly disastrous effects of climate change, the Financial Times reports. Global Rescue, an evacuation response company on the US West Coast, has signed up more clients in the past five months than in the company’s entire 16-year history, as prepping goes mainstream among the elite.

TRUMP NON-TRANSITION- The Donald is continuing to deny that he lost the US election, despite briefly admitting that Joe Biden won the vote. “He only won in the eyes of the FAKE NEWS MEDIA. I concede NOTHING! We have a long way to go. This was a RIGGED ELECTION!” he raged on Twitter, a few hours after writing that “He won because the Election was Rigged [sic].”

SpaceX successfully launched its second crew into space yesterday: Three Americans and one Japanese astronaut were on board the craft destined for the International Space Station in what the Associated Press describes as the “first full-fledged taxi flight for NASA by a private company.”


*** 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: Following up on our look last month at education loans for the K-12 students, we look at whether Egypt’s banking sector can do more to help university students.

Enterprise+: Last Night’s Talk Shows

Coverage of the coronavirus continued unabated on the airwaves last night, while a few of the nation’s talking heads made room for discussing the results of the parliamentary election announced earlier in the day.

Nurseries could close if the second wave escalates: Ala Mas’ouleety’s Ahmed Moussa phoned Social Solidarity Minister Nevine El Kabbaj, who said that all nurseries around the country could be forced to close if the pandemic worsens in the weeks or months ahead. Four nurseries have been closed for failing to adhere to precautionary measures, she said, emphasising that the vast majority of them continue to operate as normal (watch, runtime: 11:30).

But the academic year will go on: Around 300 students have been diagnosed with covid since the beginning of the academic year, Education Minister Tarek Shawki told El Hekaya's Amr Adib (watch, runtime: 23:59). In a separate interview on Al Hayah Al Youm, Shawki repeated that the ministry doesn’t want to see the academic year “disrupted” and insisted that it is in a better position to cope with rising infection rates than it was last year (watch, runtime: 23:24).

No tuition fee hikes— yet: Shawki denied media reports that the ministry has decided to raise school tuition fees, telling Sherdy that the information is based on a leaked internal letter and that no final decision has been taken. The ministry will announce its new plan for fees in January, he said.

Update on Mo Salah’s health status: Hossam Hosni, head of the Health Ministry’s covid-19 committee and current star of the small screen, was back on the airwaves last night, telling El Hadidi that Mohamed Salah has been allowed to travel to El Gouna after his doctor cleared him for medical supervision (watch, runtime: 14:56).

House elections: Kelma Akhira’s Lamees El Hadidi (watch, runtime: 4:51) and Al Hayah Al Youm’s Mohamed Sherdy (watch: runtime: 5:23) both covered the results from the second stage of the parliamentary election, which were announced yesterday. We have full coverage in this morning’s Speed Round, below.

Speed Round

INVESTMENT WATCH- A run of news that suggests we’re turning a corner? In a stark contrast this summer’s news of frozen CAPEX spending and investments being put on hold, we’re seeing a spate of announcements on new investment, expansion, and CAPEX spending in the past week. The trend is in line with indicators including the PMI reading for October, which showed Egypt’s non-oil private growing at its strongest rate since December 2014. The Central Bank of Egypt’s surprise 50 bps interest rate cut last week will only help this trend once we’re into 2021.

Yesterday’s good news includes:

UK-based wholesale orange company Orange Be Global is investing USD 300 mn in an ongoing project in El Wadi El Gedid Governorate, supply ministry official Ibrahim Ashmawy told Al Mal. The project involves the acquisition of orange farms and the production of orange juice Valencia NFC at the company’s facilities, according to the company’s website. The company will partner with a local firm that will hold a 20-30% stake in the project, Ashmawy added.

Raya Holding’s Haier Raya Electric has broken ground on a EGP 200 mn air conditioner plant in the Sixth of October industrial zone, Al Mal reports, citing sources it says are familiar with the project. The company has so far spent over EGP 120 mn preparing the plant, which is expected to be up and running at the beginning of 2021. The plant will use over 60% locally-sourced materials in assembly when it gets underway, with plans to increase local components in the future. Raya signed a partnership agreement with China’s Haier Electric for the project earlier this year.

This comes as Raya Contact Center is eyeing an expansion into North America and hopes to make an investment during 2021, investor relations head Karim Seoudi tells the local press. Seoudi did not give further detail on the potential acquisitions, but said the company has yet to make an offer. He added that Raya are keen on continuing their regional expansion by tapping into Saudi Arabia’s large outsourcing market. The company announced last month it had made an offer for a controlling stake in an unnamed Gulf-based call center company with offices in 3 GCC countries as part of its regional expansion. Raya currently runs foreign branches in Dubai and Poland.

Food manufacturer Domty, meanwhile, is adding a USD 500k dairy packaging line to its factory, the company said in a regulatory filing (pdf). The line, which Domty will purchase under an agreement signed with Tetra Pak, is planned to begin operations halfway through 1Q2021. It comes as part of the company’s strategy to extend its operations into different food products. Domty invested EGP 75 mn in a baked goods and a mozzarella cheese production line this year.

In other expansion news, pharma company Sabaa International Company is planning to add four new production lines, doubling its existing production, and is also looking into acquiring other pharma manufacturers as part of an expansion plan, Sabaa head of business development, Ramy El Hendawy, told Al Mal.

Dubai Investments is considering setting up an investment park in Fayoum’s Kom Oshim, the Trade and Industry Ministry said in a statement following a meeting between Minister Nevine Gamea and the company’s CEO, Khalid Bin Kalban. We’re not entirely sure what this might look like, but look at the firm’s Dubai Investments Park for clues — it houses mixed-use industrial and commercial units and has attracted some USD 22 bn of investment.

And it’s not looking bad for tourism FDI either, with Indian hospitality chain Oyo is planning to enter the Egyptian market as part of its Middle East expansion, sources told Arabian Business. The franchise is said to be in discussion with potential local partners, though no further details on the timeline or value of the investment were given. Oyo currently runs hotels and vacation homes in 80 countries worldwide and four in the Middle East, including the UAE, Saudi Arabia, Oman, and Bahrain.

Egypt’s unemployment rate returned to pre-pandemic levels in 3Q2020, falling to 7.3% after the government eased lockdown restrictions in late June, according to figures from the state statistics agency Capmas. Unemployment stood at 7.8% in the same quarter of last year and hit a near two-year high of 9.6% in 2Q2020 as the covid-19 pandemic weighed on business conditions.

Recent PMIs have painted a mixed picture of the job market: Companies continued to cut jobs in July and August following the lockdown, and following a brief respite in September as business conditions began to improve, unemployment accelerated in October despite rising output. Employment as measured by IHS Markit’s PMI has now fallen for 12 consecutive months.

Monetary easing could be supportive of employment: The surprise 50 bps interest rate cut made by the Central Bank of Egypt (CBE) last week could provide a boost to corporate borrowing in 2021, creating jobs by making it more affordable for companies to grow by taking on financing for capex.

Industry lobbying to have natgas prices reviewed quarterly rather than twice a year. The government is considering increasing the frequency of which it reviews industry gas prices to three months instead of six months currently, Al Mal reports. The more frequent meetings would allow the government to respond quickly to global price fluctuations and other factors that may affect local prices, the newspaper quotes an unnamed source as saying. The pricing committee is likely to meet before the end of the year or at the start of 2021.

Take this report with a grain of salt: Al Mal’s source on the government’s thinking is an unnamed “prominent oil sector official.” The newspaper doesn’t specify whether the person is a government official or a private-sector exec, and the domestic press is frequently used in this manner to provide a platform for industry lobbyists. We think the source smells like a member of an industry lobby.

This comes less than a week after the Egyptian Federation of Investors Associations and state-owned gas company EGAS agreed to form a working group to study aligning local and international prices, waiving interest fees on late gas payments, and spacing out overdue payments for gas over 15 years.

Background: Manufacturers and exporters have demanded that the government lower prices from the current USD 4.5 per mmBtu, which is 30% more than the current international price, to at least USD 3.5/mmBtu. Others have suggested more severe cuts to USD 2.5 are in order to aid industry’s recovery from the covid-19 crisis.

The government has already cut gas prices twice in the past year: once in October and six months later as part of its stimulus measures to protect the economy from the fallout of the covid-19 pandemic.

Pro-gov’t Mostaqbal Watan party dominates parliamentary elections: The National List of Egypt has won every parliamentary seat allocated to party lists in the two stages of the election. The list, backed by the powerful Mostaqbal Watan Party, picked up all 142 seats in play during the second stage of voting earlier this month, National Elections Authority chief Lasheen Ibrahim announced in a press conference yesterday (watch, runtime: 32:08). Candidates running on the list also took all 142 seats up for grabs in the first round, giving it 284 members of parliament in the 596-seat chamber. Mostaqbal Watan also dominated the seats allocated to individual candidates, picking up 59 of the 73 seats that have already been decided (32 of them in the first round, and 41 in the second). Turnout for the second phase was 29.5%, with 9.2 mn of 31 mn eligible voters casting their ballot, Lasheen said.

House + Senate for Mostaqbal Watan: The sweep of the House elections means that the Mostaqbal Watan party is on the way to dominate both chambers of parliament after winning the majority of the seats in the Senate elections earlier this year.

When are the run-offs? 110 seats will be decided when first round runoff elections are held 23-24 November while the voters will return to the polls to settle the remaining seats from the second stage on 5-8 December.

The story is getting attention in the foreign press: Reuters | The National.


EARNINGS WATCH- Lots and lots of companies released earnings at the buzzer yesterday, the final day for listed corporations to release their 3Q numbers without incurring late fines.

CIB will postpone the release of its third quarter financials until the bank completes its internal review of the findings of a central bank audit that last month suggested CIB was in violation of some (unspecified) banking regulations, the bank said in a statement. CIB did not specify when it expects to publish its 3Q results, but said it would release additional updates when appropriate. The bank said it is working with its external auditors (PwC and Deloitte) to review the CBE’s findings

No adverse impact: “At this time, following a preliminary internal review, we do not expect the impact of the findings to have a material adverse effect on the current financial condition of CIB,” the bank said in its statement, which said its board meeting on 14 November 2020 agreed that the release of 3Q figures would be postponed “until the Bank completes its review process, in coordination with its external auditors.”

GB Auto posted net profits of EGP 375 mn in 3Q2020, up from a net loss of EGP 8.3 mn during the same quarter last year, the company said in its earnings release (pdf). Revenues dropped 8.5% y-o-y to EGP 6.2 bn. The company’s auto and auto-related (A&AR) revenues fell 14.5% y-o-y due to the impact of the pandemic. That said, the A&AR segment saw a turnaround this quarter, with revenues surging 68% q-o-q to EGP 4.8 bn as demand picked up amid recovering business conditions. “Our third quarter results reflect an encouraging recovery across our markets as conditions normalize and demand picks up at the majority of our business lines, exceeding the most bullish expectations,” CEO Raouf Ghabbour said.

Looking ahead, GB Auto is “cautiously optimistic regarding market conditions and will remain vigilant in the face of any eventuality,” Ghabbour said. The company is anticipating a continued recovery in its A&AR segment and further growth in passenger car sales, with two- and three-wheelers to continue to benefit from “strong market fundamentals,” he added.

Ibnsina Pharma’s net profits fell 22% y-o-y to EGP 111.6 mn in 3Q2020, from EGP 142.4 mn in 3Q2019, according to the company’s earnings release (pdf). Revenues were up 10% to EGP 4.8 bn from EGP 4.4 bn in the same quarter last year. Commenting on the results, CEO Omar Abdel Gawad said “despite the undeniable challenges faced by the pharma industry in 2020, Ibnsina Pharma has managed to increase its market share of the retail segment to 22.8% as of 9M2020, up from 20.8% one year previously.”

Looking ahead, Ibnsina expects the market to overcome “the lingering effects” of the pandemic and its restrictions in the coming quarters. The company plans to push on with its long-term strategy, which includes a digital financial platform giving customers access to multiple fintech products, a pharmacy management system and a supplier self-service platform.

Arabia Investments Holding’s (AIH) 3Q2020 net profits increased 250% y-o-y to EGP 31 mn from EGP 9 mn last year, according to a company earnings release (pdf). Revenues for the quarter were up 157% y-o-y to EGP 637 mn, driven by 181% y-o-y growth in construction and building materials revenues, and a 42% y-o-y growth in the non-banking financial services (NBFS) revenues. Subsidiary UE Finance saw its portfolio triple during the quarter to EGP 2.1 bn, while its Rawaj auto sales were up 25% y-o-y for the quarter.

Looking ahead, AIH plans to double its business over the coming three years by adding new services and products across its investments, expanding geographically, and adding new investments and companies to its NBFS portfolio.

Orascom Development Egypt (ODE) reported a 76% y-o-y increase in net profits to EGP 189 mn in 3Q2020 from EGP 107.4 mn last year, according to the company’s earnings release (pdf). Revenues increased 32% y-o-y to EGP 1.3 bn during the quarter, down from EGP 1 bn during the same period last year.

Pioneers Holding’s net profits more than halved to EGP 66.1 mn in 3Q2020 from EGP 136.9 mn in the same period last year, according to the company’s financials (pdf). Pioneers 3Q2020 revenues fell to EGP 1.6 bn from EGP 1.8 bn last year.

Emaar Misr reported net profits of EGP 440 mn in 3Q2020, down from EGP 534 mn in the same quarter of last year, according to its financial statements (pdf). The drop in profits came despite revenues rising 43% to EGP 1.27 bn, up from EGP 883 mn in 3Q2019.

Obour Land reported net profits of EGP 99.4 mn for 3Q2020, a 12% y-o-y decline from EGP 113.3 mn in 2019, according to an earnings release (pdf). Net revenues for the quarter were up 9% y-o-y to EGP 795.5 mn.

B Investments reported net profits of EGP 30.6 mn in 3Q2020, down 22% from EGP 37.4 mn in the same period last year, according to a company earnings release (pdf).

Eastern Company reported net profits of EGP 1.2 bn in 3Q2020, up 10% y-o-y from EGP 1 bn last year, according to a bourse filing.

The Egyptian Resorts Company returned to profit in 9M2020, reporting a EGP 22,1 mn profit for the period compared to a EGP 15.2 mn loss last year, according to a bourse filing.

Arabian Cement reported net losses of EGP 34.5 mn for 3Q2020, down from a net profit of EGP 5.8 mn during the same period last year, according to the company’s consolidated financial statements (pdf). Sales revenues fell 17% to EGP 592 mn during the quarter, from EGP 712 mn in 3Q2019.

Arab Dairy posted a net loss of EGP 3.3 mn in 9M2020, down from a net profit of EGP 20.6 mn in the same period last year, according to financial statements.

How an Egyptian company gave European football a competitive edge: In this week’s episode of Making It, we speak with Arqam FC CEO Ali ElFakharany about his journey from a struggling local sports data company in 2017, to a global player in sports data analytics following an acquisition by UK-based Statsbomb in 2019. Arqam and Statsbomb serve 42 football clubs, including teams from the Premier League, Ligue 1, and Bundesliga, with an expansion into a new sport just around the corner.

You already have a podcast player on your iPhone, or you can listen to the episode through our website (no download required). We’re also on Google Podcasts | Anghami | Omny. Making It is on Spotify, but only for non-MENA accounts.

CORRECTION- Egypt’s economy contracted 1.7% in 4Q2019-2020, and not in 3Q2019-20 as we incorrectly noted yesterday. The story has since been corrected on our website. Thanks to those who wrote to us pointing out the error.


Enterprise is available without charge — just visit our English or Arabic subscription page, depending on which edition you would like to receive. We give you just about everything you need to know about Egypt, in your inbox Sunday through Thursday before 7am CLT (8am for Arabic), and all we ask for is your name, email address and where you hang your hat during business hours.

Egypt in the News

Diplomacy + Foreign Trade

It’s a slow morning for news on the diplomacy + foreign trade fronts.

The top story: The European Bank for Reconstruction and Development’s (EBRD) discussed its pipeline of new projects in Egypt over the next five years at a meeting yesterday between International Cooperation Minister Rania Al Mashat and the bank’s SEMED region Managing Director Heike Harmgart, according to a cabinet statement. The statement offered no details.

Syrian foreign minister and vice PM Walid Muallem has died, Syrian state media reported early this morning, according to Reuters. There were no further details on the cause of death. The long-time diplomat and Baath Party member has served as the country’s foreign minister since 2006 and as the deputy prime minister since 2012.

Also further afield: Clashes in Ethiopia threaten to escalate into regional conflict after Ethiopian Tigray rebels fighting against the government fired rockets into Eritrea’s capital city yesterday. The nutter in Ankara wants a two-state solution — in Cyprus, Reuters writes, and Israel is pressing ahead with a Jewish district in east Jerusalem while the Trump administration is still in the White House, Bloomberg reports.


Can banks do more to help students pay for university, especially during covid? With rising tuition costs, there is a growing need for funding and financial aid for higher education degrees — but the lending landscape in Egypt makes borrowing a difficult option. Last month, we looked at how banks in Egypt are starting to tweak their education loan offerings in a bid to cater to parents whose children are enrolled in K-12 schools to help them meet tuition fee payments. What we found then is that, after being met with meager demand, tuition loan packages to cover K-12 tuition are getting a boost from banks amid expectations that the pandemic’s pinch on parents’ pockets could make them more likely to resort to borrowing.

The situation is different for university loans — while the borrowing need is there, the loans are not really accessible. Since the outbreak of the pandemic, which has put pressure on employment levels and purchasing power, there is a growing base of potential borrowers who are finding it more difficult to meet tuition fee payments for higher education degrees, Pharos Holdings’ head of research Radwa El Swaify told Enterprise. There has been growing pressure on household income over the past several years, as middle- and upper middle-class households earmark a greater portion of their income to education, especially with the increasing availability and popularity of private education, El Swaify said.

The need for funding is all the more pressing as tuition fees at private and international universities are getting pricier: For example, tuition fees for the 2020-2021 academic year for an Egyptian student at AUC has been priced at USD 19,410 (c.EGP 303,530), up from USD 15,660 last academic year. Other private universities are less expensive, but have a greater range depending on the faculty: At BUE, tuition fees range between EGP 33,700 and EGP 180,000, while one year at GUC costs anywhere between EGP 74,250 and EGP 92,350, and MIU charges EGP 74,250-150k per year. On the higher end of the spectrum, New Giza University costs between EGP 107,750 and EGP 151,450 per year, depending on the faculty.

So, what options do parents and students have to finance a higher education degree? When it comes to university loans, banks are offering to give parents bigger loans than are available for K-12 tuition fees — up to EGP 1.5 mn — with longer tenors of up to three years to match the nature and time commitment of postgraduate education. Some banks, including the Egyptian Arab Land Bank are offering loans on relatively attractive terms, including an interest rate of 16.75% for a three-year loan worth EGP 200k, EALB Chairman Medhat Qamar tells Enterprise. (For comparison, EALB’s K-12 shorter term loans carry a 15.75% interest rate.)

The problem is, the terms of these loans are difficult to swallow: EG Bank is among the stand-outs in financing undergraduate degrees, offering a 100% coverage rate up to EGP 1 mn — but these loans carry a steep interest rate of 19%. The bank also offers a one-year loan with an interest rate of 17%. The Housing and Development Bank has set a fixed interest rate of 16% to finance tuition fees, while Baraka Bank can lend up to EGP 500k with an interest rate of 16.75-18%. At CIB, there are education loans of up to EGP 150k available at preferential interest rates ranging between 14.5 and 17.5%. These loans require the borrower to have a minimum monthly salary of EGP 2,600, a source at CIB told Enterprise.

Here at home, banks are also more selective with who they lend to: The Arab African International Bank, for example, only offers undergraduate loans for tuition at a handful of international universities, such as the American University in Cairo, the British University in Egypt, the German University in Cairo, Canadian International College, and the Arab Academy for Science and Technology.

Banks appear to be most keen on teaming up with institutions directly to drive their students and parents towards loan packages: The National Bank of Egypt and QNB have both addressed Badr University to help them market their tuition loans to students and parents, university President Mostafa Kamal tells Enterprise. And while the university agreed and did indeed market the products, demand remains low — mostly because of a lack of awareness and information on the loans, Kamal says.

There are some midway options to get an international education here in Egypt: CIB, for example, offers financing for students pursuing MBA studies at Nexford University with an interest rate of 13.5-22.50% with a repayment period of up to eight years. The bank has similarly collaborated with the Regional IT Institute — which offers post-grad programs — and ESLSCA Business School. These partnerships have relatively helped spur demand for CIB’s loan offerings, a source at CIB told Enterprise.

Otherwise, the options are limited: One prospective graduate student we spoke with, who intends to pursue a degree in the US, says that even the largest loan offerings available at Egyptian banks would not be enough to cover the two years of USD-denominated tuition fees at her university of choice. To make things worse, the steep interest rates mean it would be difficult at best to meet the repayment terms, particularly as international students are not permitted to work during their studies under US law.

That adds further impetus to make loan packages more attractive for students choosing to pursue their higher education degrees at local private universities, Future University President Ebada Sarhan tells Enterprise, particularly as reforms are underway to persuade Egyptians to study here at home.

But the country’s overall high interest rate environment will remain the biggest deterrent to demand, El Swaify says. “Demand will always depend on the product offering. The higher the addressable market — which changes as the offering becomes more flexible and accommodating in terms of interest rates, minimum income levels, and repayment schedules — the greater the demand is likely to be,” she says.

Could a CBE initiative help turn that around? Banks are working with the central bank to draw up policies that would make K-12 education loans easier to get and expand their retail lending for these borrowers, we noted last month. The policies are largely focused on easing the terms of these loans, with several scenarios currently on the table, including schools freezing tuition fee increases for the academic years being paid through an education loan. For now, a similar initiative for university loans doesn’t appear to be in the works, although it is “quite possible, especially considering current conditions,” El Swaify says.

Even if it were to materialize, however, it would likely be limited in scope and temporary, since this kind of initiative could prove burdensome for banks by negatively affecting their asset quality because of problematic loans, she said.

Your top education stories of the week:

  • Egyptian students will soon be able to apply to a financial markets masters degree offered by the Spanish Institute for Stock Exchange Studies and Financial Services Institute.
  • The Education Ministry hasn’t ruled out closing schools in the case of a second wave, but Minister Tarek Shawki said that ultimately it isn’t his decision to make.
  • US investments in Egypt will increase in fields such as education and agriculture, regardless of who is in office, AmCham Head Sherif Kamel said, according to the local press.
  • Education services saw an uptick in prices this October increasing 29.7% m-o-m while high school education prices rose 55.6% m-o-m, helping spur annual headline inflation figures.
  • The Education Ministry will launch two new Arabic educational channels on TV for secondary and vocational students to watch classes in subjects such as science and math, according to Misr Alan.

The Market Yesterday

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EGP / USD CBE market average: Buy 15.58 | Sell 15.68
EGP / USD at CIB: Buy 15.59 | Sell 15.69
EGP / USD at NBE: Buy 15.60 | Sell 15.70

EGX30 (Sunday): 10,953 (-0.6%)
Turnover: EGP 1.5 bn (33% above the 90-day average)
EGX 30 year-to-date: -21.6%

THE MARKET ON SUNDAY: The EGX30 ended Sunday’s session down 0.6%. CIB, the index’s heaviest constituent, ended down 1.2%. EGX30’s top performing constituents were Beltone Financial Holding up 3.8%, Orascom Development up 2.4%, and Pioneers Holding up 2.0%. Yesterday’s worst performing stocks were CIRA down 2.6%, Oriental Weavers down 1.7% and Telecom Egypt down 1.2%. The market turnover was EGP 1.5 bn, and regional investors were the sole net sellers.

Foreigners: Net long | EGP +15.2 mn
Regional: Net short | EGP -46.4 mn
Domestic: Net long | EGP +31.3 mn

Retail: 81.1% of total trades | 73.9% of buyers | 83.9% of sellers
Institutions: 18.9% of total trades | 21.7% of buyers | 16.1% of sellers


Cement sector suffers another dire quarter: Cement sales fell 14.2% y-o-y to 10.5 mn tonnes in 3Q2020 as the sector continued to be hit by the six-month freeze on building permits introduced in May and the ongoing crackdown on illegal construction, Pharos analyst Zeyad Ahmed wrote in a note (pdf) yesterday. Companies saw a slight pick up in demand from the second quarter, with sales up 3.6% on a quarterly basis. Despite this, prices continued to slide, falling 4.6% q-o-q and 12.2% y-o-y.

Expect more of the same this quarter: Sales volumes will remain lower on an annual basis and are likely to show “little to muted quarterly growth” as the permit ban remains in place, Pharos says. Prices should creep back up to pre-covid levels of around EGP 800 per tonne after the government lifts construction restrictions.


WTI: USD 40.13 (-2.41%)

Brent: USD 42.78 (-1.72%)

Natural Gas: (Nymex, futures prices) USD 3.00 MMBtu, (+0.64%, December 2020 contract)

Gold: USD 1,886.20 / troy ounce (+0.69%)

TASI: 8,501 (+0.79%) (YTD: +1.34%)
ADX: 4,971 (+0.33%) (YTD: -4.02%)
DFM: 2,269 (+0.27%) (YTD: -17.93%)
KSE Premier Market: 5,992 (-1.82%)
QE: 10,202 (-0.10%) (YTD: -2.14%)
MSM: 3,641 (+0.37%) (YTD: -8.53%)
BB: 1,439 (-0.64%) (YTD: -10.58%)

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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.

10-19 November (Monday-Thursday): A World Bank delegation arrives in Egypt to discuss financing development projects.

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

13-20 November (Friday-Friday): Cairo Jazz Festival.

14 November (Saturday): Startups Without Borders Summit will be held virtually

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.

15 November (Sunday): Results of the second phase of Egypt’s parliamentary elections will be announced.

16 November (Monday): Postponed trial of alleged abuser Ahmed Bassam Zaki, after he failed to attend the previous court date

16 November (Monday): The fifth edition of Destination Africa will be held virtually and will highlight African manufacturers and suppliers of fashion and textiles, among others. The expo will continue for one month.

18 November (Wednesday): The 50 Million African Women Speak online event will be held, organized by the Egyptian MSME Development Agency and Comesa

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

21 November (Saturday): Deadline to install electronic vehicle stickers

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

23-24 November (Monday-Tuesday): Runoffs 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 (date TBC): Egypt Economic Summit, Cairo, Egypt, venue TBD.

December: Fifth round of Egypt-US Trade and Investment Framework Agreement (TIFA) talks.

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.

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 December: Former Civil Aviation Minister Ahmed Shafik faces trial over embezzlement allegations.

7-8 December (Monday-Tuesday): Runoffs 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 December (Tuesday): House of Representatives reconvenes from recess.

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.

31 December (Thursday): Egypt-UK post-Brexit trade agreement to take effect.

1Q2021: The Seventh Annual Egypt Automotive Summit will be held

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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