Wednesday, 10 November 2021

AM — Vodafone’s South African subsidiary is making a play for Vodafone Egypt

TL;DR

WHAT WE’RE TRACKING TODAY

Good morning, friends, and welcome to almost-THURSDAY, where the weekend is nearly in sight after a very, very busy week indeed.

Three big stories are vying for your attention this morning here at home, including a suggestion that Vodafone’s South African unit going after Vodafone Egypt in a bid that resurrects what would be Egypt’s largest-ever acquisition. Meanwhile, high-level talks between Egypt and the United States have wrapped up, we have a bunch of startup news, and we’ve pulled together your guide to the very, very long list of transportation infrastructure investments and contracts announced at TransMea this week.

And right on cue… A train derailed on the North Coast yesterday after colliding with a truck, the National Railways Authority said in a statement. No injuries were reported among the passengers, but the statement appears to suggest the train driver sustained serious injuries.

THE BIG STORY ABROAD- The running theme in the global front pages this morning: corporate break-ups in various forms. Whether that’s the news that GE is splitting itself into three separate companies, the pressure being put on Apple to open its App Store to other payment providers or the slow-motion car crash at Evergrande, which is yet again staring default in the face as another bond payment comes due.

WHAT’S HAPPENING TODAY-

It’s inflation day: The Central Bank of Egypt and state statistics agency Capmas are set to release inflation figures for October today. Egypt’s headline inflation rate has been slowly ticking up in recent months — but jumped almost a full percentage point in September, hitting a 20-month high of 6.6% on the back of rising food and energy prices.

We’ll go out on a limb and say that food and energy price inflation has not topped out, especially now manufacturers are seeing their gas bills rise by up to 28% and fuel prices rose again last month. Fertilizer and chemical producers may raise their prices by as much as 20%, a move that would (a) fuel further food price inflation and (b) put more pressure on manufacturers’ operating margins. Throw in the global supply chain bottlenecks that last month contributed to causing input and output prices to accelerate at their quickest pace in over three years and, well…

High interest rates to the rescue: The central bank has left interest rates on hold this year. At 8.25% in a global environment of historically-low interest rates, investors have remained interested in the Egypt carry trade and inflation does not eat too far into their returns, even as it has crept up over recent months.

Things could change in the coming months: Though Egypt continues to boast the highest real interest rates in the world, further rises in inflation could soon start to make the EGP less attractive, especially as other countries begin to roll back covid stimulus and raise rates. The key country to watch here is the US, where the Fed is now planning to fully phase out its gigantic bond-buying programme by next June and soon after could start to tighten rates. But other emerging markets could also become more competitive with the EGP carry trade should inflation force central banks into a more aggressive tightening cycle.


PSA- Travelling to the UK is going to get easier for us in less than two weeks: From 22 November, the British government will add Sinovac, Sinopharm and India’s Covaxin to its list of approved vaccines, meaning you won’t have to quarantine for 10 days by default after arrival, the Department of Transport said Monday. Currently, the UK only accepts the Oxford/AstraZeneca, Pfizer-BioNtech, Moderna and the Johnson & Johnson jabs. All travelers under the age of 18 will also be allowed to enter the UK without self-isolating on arrival.

What you’ll need to do: Everyone who is fully vaccinated with an approved jab no longer needs to take a pre-flight PCR test. Instead, you’ll take either a lateral flow or a PCR test on your second day in the country. Test negative and you’ll avoid quarantine; test positive and you’ll need to self-isolate for 10 days.

Yo, Canada, France — you two awake back there? The UK joins the United States in explicitly saying “If the vaccine you took is good enough for the World Health Organization, it’s good enough for us.” Other nations, including two of our favourite countries, are lagging. Canada, for example, doesn’t recognize as vaccinated anyone who has taken two shots of Sinovac or Sinopharm, while France requires visitors to have at least one jab of an mRNA vaccine on top of Sinovac or Sinopharm to count as vaccinated.

Another sign of warming ties with Doha: EgyptAir yesterday opened a new office in the Qatari capital, the Egyptian Foreign Ministry said in a statement. Egypt’s national flag carrier resumed flights to Qatar in January following the signing of the Al Ula Accords, which finally restored diplomatic ties between the two countries and brought an end to the four-year blockade of Qatar by Egypt, KSA, the UAE and Bahrain. This came a day after billboards advertising Al Jazeera were spotted in Cairo, raising speculation that the Qatari news channel could be making a comeback in Egypt after eight years of exile.

CIRCLE YOUR CALENDAR-

CIB Chief Sustainability Officer Dalia Abdel Kader will moderate a panel today in Scotlan on climate change and the reduction of carbon emissions. Environment Minister Yasmine Fouad and Planning Minister Hala El Said are both expected to be in attendance.

Anghami SPAC merger deadline is almost here: Tomorrow is Anghami’s deadline to pull the trigger on a merger with blank-check firm Vista Media Acquisition Company and list on the Nasdaq. The company had previously extended the deadline in August.

Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.

enterprise

*** It’s Hardhat day — your weekly briefing of all things infrastructure in Egypt: Enterprise’s industry vertical focuses each Wednesday on infrastructure, covering everything from energy, water, transportation, urban development, as well as social infrastructure such as health and education.

In today’s issue: The first two days of the TransMea transport conference saw Egypt signing a total of 21 agreements with local and international companies. The agreements span the country’s railway projects, Cairo Metro, as well as maritime and inland logistics infrastructure — but the historically underfunded Cairo Metro was the star of the show.

enterprise

M&A WATCH

From Cape to Cairo

Vodafone’s South African subsidiary is making a play for Vodafone Egypt: Vodacom has made an initial offer to acquire Vodafone Group’s majority stake in Vodafone Egypt, minority shareholder Telecom Egypt said in a statement in the early hours of this morning.

The current shareholder structure: Vodafone Egypt is currently 55% owned by Vodafone Group and 45% owned by TE.

From Cape to Cairo: Formerly a 50-50 joint venture between Vodafone Group and South African telecoms giant Telkom, Vodacom is now 60% owned by Vodafone and the remaining shares are listed in Johannesburg.

TE, which already owns and operates the mobile network brand We, isn’t saying what’s on the table: “Vodafone Group will disclose the value and structure of the offer,” the statement said, without providing details.

But it now has the power to intervene in the transaction and take the stake for itself: Due to special rights in its shareholder agreement with Vodafone Group, the state-owned company gets preferential treatment ahead of a major shareholder change, and now has the option to purchase the 55% stake in Vodafone Egypt ahead of Vodacom.

Concentration risk? An acquisition by TE would give it full control of two of the four mobile operators in the country.

Vodafone Egypt *may* still be on STC’s radar: Saudi Telecom spent much of 2020 in talks with Vodafone Group to acquire the stake, and submitted an initial offer valuing the company at USD 4.4 bn. The British company walked away from talks late last year after being unable to agree a sale price, but press reports in September of this year suggested that the Saudi company might not have given up. Sources told CNBC that STC was in the process of acquiring finance to fund the acquisition and that the two sides had reentered talks, a claim Vodafone and STC both denied.

DIPLOMACY

US-Egypt strategic talks wrap

The US and Egypt wrapped up two days of strategic talks in Washington yesterday, with the Foreign Ministry and the State Department issuing a joint statement overnight to close out the meetings. The talks “reaffirmed the importance of the US-Egypt strategic partnership and identified areas in which to deepen bilateral and regional cooperation,” the statement said.

The statement doesn’t say much that we didn’t know already, following the opening statements by Foreign Ministry Sameh Shoukry and Secretary of State Anthony Blinken on Monday. The US praised Egypt’s efforts to negotiate a peace between Hamas and Israel earlier this year, and the two sides agreed on the importance of holding elections in Libya next month and negotiating an exit of all foreign fighters from the country.

There might be less common ground on Sudan, with the statement saying merely that the two sides “discussed” recent events in the country. The US has come out strongly against last month’s seizure of power by military chief Abdel Fattah Al Burhan, with whom Egypt has cultivated close ties in recent months.

Washington still isn’t giving public backing to Egypt’s position on the Grand Ethiopian Renaissance Dam.

US and Egyptian officials held “constructive dialogue” on human rights and the US welcomed Egypt’s announcement of a new human rights strategy, the statement said. It does not mention the suspension of USD 130 mn in military aid nor does it shed light on the specific human rights conditions Egypt must meet to unlock it.

Shoukry also stopped by the Woodrow Wilson Center yesterday to discuss the US-Egypt relationship with Gen. David Petraeus, the former CIA director and and CentCom commander. You can check out the talk in full here (watch, runtime: 54:05).

The meetings were headline news on several of the nation’s talk shows last night: Appearing on Hadeeth Al Kahira, US State Department regional spokesperson Samuel Werberg (formerly at the embassy here in Cairo) talked up the importance of the bilateral relationship in solving many of the region’s major issues — and reiterated the State Department’s position on GERD and Libya (watch, runtime: 10:41).

An Egyptian perspective: The relationship between the two countries is very rich in history and “very significant for the states’ role in the Middle East,” political commentator Mostafa El Feky told Yahduth Fi Masr, pointing out the nations’ close military ties (watch, runtime: 1:28 | 3:52).

And the meetings were still getting attention in the foreign press, this time in the Wall Street Journal.


El Sisi, Jordanian crown prince talk trade, security cooperation, regional issues: President Abdel Fattah El Sisi met with Jordanian Crown Prince Hussein bin Abdullah yesterday to discuss enhancing bilateral relations on trade, tourism, trade exchange, support for SMEs, combating terrorism, and empowering women and youth, according to an Ittihadeya statement. On the regional level, the pair touched on efforts to maintain the ceasefire in Gaza, the ongoing crises in Libya and Syria, and ways to support the government in Iraq.

IN OTHER DIPLOMATIC NEWS-

  • El Sisi, Libyan president hold talks ahead of Paris conference: President Abdel Fattah El Sisi held talks with the chair of Libya’s presidential council Mohamed El Menfi ahead of the international conference in Paris on Friday, which is supposed to pave the way for national elections in the country in late December.
  • World Bank, Egypt talk exporting natural gas to Lebanon: The WB is currently working with Lebanon to facilitate the arrival of Egyptian gas, which we were told could happen by the end of the year, bank officials told Oil Minister Tarek El Molla during their meeting yesterday.

TOURISM

The return of the Ruskies: The Charter Flights

Russian charter flights are back: Moscow resumed charter flights between Russia and Hurghada and Sharm El Sheikh yesterday, Russia Today reports. The return of charter flights, which Russia announced last month, comes after Russian President Vladimir Putin finally lifted his country’s six-year ban on direct flights between Russia and Egypt’s Red Sea destinations.

Reminder: Charter flights differ from regular “commercial” flights offered by airlines. Commercial flights are regularly scheduled hops on which, for example, you book your own seat with EgyptAir from Cairo to Toronto. These flights operate on a set schedule and will typically abide by the schedule regardless of how many seats are full. Charter flights see one person or group (typically tour operators) booking out an entire airplane for a specific purpose, and then setting the departure time based on an individual agreement with the airline.

The resumption of charter flights is expected to bring in more tourists: Charter flights shave some 20% off the cost of travel, bringing the total cost of a one-week trip to Egypt to an estimated USD 210-365, according to industry estimates.

And even better, they’re resuming at the same time as Russians are getting a long break of paid “non-working days” due to the country’s worsening covid-19 situation, which the Association of Tour Operators of Russia predicted would drive tourist arrivals in Hurghada and Sharm.

The return of direct charter flights will bring much needed FX inflows for Egypt: The full resumption of Russian flights to Egypt could generate some USD 3 bn in annual tourism revenues, Goldman Sachs previously estimated. But Tourism Ministry estimates indicate that we’re not going to lock down the full amount this year: An estimated 1 mn Russian tourists could arrive in Egypt this year, which would mean that we’ll end the year with just USD 1 bn in Russian tourism revenues.

STARTUP WATCH

OTO Courses nets investment worth USD 400k from EdVentures

OTO secures USD 400k to expand its edtech platform: Egyptian edtech platform OTO Courses has secured an investment worth USD 400k (c. EGP 6.3 mn) from Nahdet Misr for Publishing’s VC arm, Edventures, according to a press release (pdf) from the investor. The money will be split between cash and in-kind services, Edventures said. OTO and Edventures declined to reveal how much of the investment it would receive in cash when asked by Enterprise.

OTO will use the investment to add more subject areas to its distance-learning platform and expand its user base, especially among middle and secondary school students. The startup will also gain access to content produced by Nahdet Misr for its Al-Adwaa educational book series through the transaction, starting with English-language resources before expanding to other subjects in the coming months, Edventures General Manager Maged Harby told Enterprise.

OTO recap: Founded in 2015 by Tarek Nour and Ahmed Badr, OTO currently provides a range of specialized and general one-to-one courses, mainly focused on teaching English. The platform secured a USD six-figure bridge round from AUC Angels and Changelabs in mid-2020. In 2018, OTO raised undisclosed seed funding from EdVentures and HIMangel.

Edventures is a big spender in our edtech sector: Edventures invested USD 160k in edtech platform iSchool in June, following a six-figure investment in book summary platform Akhdar at the start of this year. By our count, the VC firm was responsible for three of the five Egyptian edtech investments made in 2020.

FINTECH

UK-based fintech JUMO looks to open its doors in Egypt

South Africa and London-based fintech company JUMO is considering an expansion into Egypt, CEO Andrew Watkins-Ball told the Financial Times. The company announced earlier this week that it had raised USD 120 mn in its latest funding round led by Fidelity Management & Research Company, which it will use to scale its platform and fund an expansion to Nigeria and Cameroon. The fintech player is currently actively operating in six African countries — Ghana, Tanzania, Kenya, Uganda, Zambia and Ivory Coast — and Pakistan. The funding round raised the company’s value to USD 400 mn, according to The Times.

What does JUMO do? Its platform facilitates banking services like savings, credit, and primarily lending, in emerging markets, where over 1.7 bn people lack access to basic financial services. It also provides digital infrastructure and other services like underwriting and core banking to banks.

It could serve loans to up to 150 mn customers: The company’s current operational costs — USD 1 per customer a year — means it can realistically scale efficiently across a total addressable market of 150 mn customers, according to TechCrunch. Since its launch in 2015, it has served over USD 3.5 bn in loans to over 18 mn customers, according to the company press release.

Fintech is booming in Egypt: The number and scale of digital financial services offered in Egypt have grown massively in the past two years. Fawry became the country’s first tech company to hit a EGP 1 bn market cap last year, while digital lender MNT-Halan scored the MENA region’s largest fintech round ever this September. JUMO would join a host of other fintech companies operating in Egypt, including our friends at Kashat, Khazna and valU as well as PayMob, Fatura, PayNas, Moneyfellows, ElGameya and state-owned, EGX-listed e-Finance — the list is nearly endless

IN OTHER STARTUP NEWS-

Startup Noqood Holding is looking to get into consumer finance and non-banking financial services, co-founder Abdelrahman Ali said. Noqood is targeting a EGP 20 mn credit line and is currently negotiating the rights to issue some 5k credit cards in partnership with Mastercard.

INFRASTRUCTURE

Who are the six consortiums bidding for the Tenth of Ramadan dry port?

The six consortiums chasing the Tenth of Ramadan dry port have been revealed: The consortiums include Orascom Construction-Abu Dhabi Ports, Elsewedy Electric-CMA CGM, Samcrete-Portek, AlGhanim Group-China Hyper, one led by the Mediterranean Shipping Company and another by Bollore Logistics.

The consortiums have come forward with offers to build and operate the EGP 3.5 bn dry port and logistical hub, Amr Ismail, head of the General Authority for Ports, told Al Borsa on the sidelines of the TransMEA 2021 transport expo.

The 250-feddan dry dock aims to serve the industrial area in a number of regions — Badr, Ain Sokhna, East Port Said, the new capital and of course Tenth of Ramadan.

The tender has been in the works for a while: Over the summer the cabinet approved a public-private partnership model which allowed the government to move forward with a tender to establish the Tenth of Ramadan City dry port and logistics hub.

More dry ports in the pipeline: The authority is working to prepare an integrated plan to establish eight dry ports and five logistical hubs across the country and link them all to the railway network, Ismail said.

EARNINGS WATCH

Contact Financial’s net income rose 65% to EGP 114 mn in 3Q2021 from the same period in 2020, according to the company’s financials (pdf) out yesterday.

The results reflect growth in Contact’s financing business… Contact’s net income from financing across the first nine months of the year rose 60% y-o-y to EGP 343 mn, according to the company’s 9M earnings release (pdf). This was driven by an expansion of its lending portfolio which rose by a third to EGP 9.6 bn. The company attributed the growth to a “widespread rebound” in economic activity, new products and a growth of market share.

…and an easing of losses at its new ins. unit, which delivered a EGP 1.3 mn loss during 9M2021 after landing EGP 12.9 mn in the red last year. Gross written premiums rose 85% to EGP 376 mn.

Coming up: The company will soon roll out its new Contact Pay app which will provide new e-payment and other digital financing services.


MNHD reports 60% shortfall in net income during 9M2021: Real estate developer Madinet Nasr Housing & Development has seen net income fall to EGP 250 mn in 9M2021, down 60% y-o-y, according to a company earnings release (pdf). MNHD revenues reached EGP 1.38 bn over the nine month period, down 22% y-o-y. Muted net income over the course of 9M2021 is attributable to not having large land sales, the company said.

Beltone reverses its net losses in 3Q2021: Beltone Financial reported a bottom line of EGP 1.9 mn, reversing an incurred net loss of EGP 15.4 mn in 3Q2020, according to the company’s financials (pdf). This came as its topline grew to EGP 114.7 mn, up from EGP 68.1 mn the year before.

Satellite operator NileSat’s net income fell 67.6% y-o-y to USD 2.11 mn in 3Q2021, according to a company earnings release (pdf). Revenues also slipped, though less drastically, falling 9.7% y-o-y to USD 27.18 mn during the third quarter.

enterprise

ENTERPRISE+: LAST NIGHT’S TALK SHOWS

Once again last night’s talk shows were all about the US-Egypt strategic talks: There’s more on that front in this morning’s Diplomacy section, above.

The Suez Canal ups its transit fee: Suez Canal Authority boss Osama Rabie appeared on Kelma Akhira to discuss the 6% hike in transit fees announced last week that will come into effect in February (watch, runtime: 13:40). Rabie explained that the authority wants to capitalize on accelerating global growth, which is raising global trade volumes and maritime traffic. The authority expects Suez Canal traffic to rise 8% during the current quarter, he said.

More on Egypt’s first high-speed rail line: Siemens Mobility CEO for the Middle East and Africa Leon Soulier joined Masaa DMC’s Ramy Radwan to discuss the company’s work on the high-speed rail line, which will connect Ain Sokhna to Marsa Matrouh (watch, runtime: 27:56). The German conglomerate signed a USD 4.5 bn contract in September that will see it work with Orascom Construction and Arab Contractors to construct the 660-km line, which will transport passengers at up to 250 km/h, cutting travel time from 4-4.5 hours to 2-2.5 hours

EGYPT IN THE NEWS

It’s a mixed bag in the foreign press this morning as far as Egypt is concerned: Among the stories getting picked up:

  • Egypt’s reliance on fossil fuels for its energy production could be a sticking point as the country tries to build its image as a climate-conscious state, and readies itself to host COP27 next year. (Quartz Africa)
  • Human rights: Human rights organizations are calling on the Saudi government to release 10 Egyptian Nubian men who have been detained without charge for 16 months for organizing a “community event.” (Amnesty International)

ALSO ON OUR RADAR

Tuk-tuks be gone: Trade Minister Nevine Gamea has issued a decision to stop importing the basic components needed for the local assembly of tuk-tuks, a move that was telegraphed earlier this week.

Other things we’re keeping an eye on this morning:

  • Pump it up: The world’s largest water pump manufacturer, Grundfos, could set up a new EUR 6 mn factory to produce water pumps in Egypt in the next five years.
  • Altus strikes gold in new Eastern Desert concessions: Altus Strategies subsidiary Akh Gold has discovered 14 hard rock artisanal gold workings in two of its 100%-owned Eastern Desert sites acquired in the recent exploration tender, according to a company statement. Altus, which is backed by b’naire Naguib Sawiris, is in “a strong position to aggressively advance exploration” following the finds at the two sites, the statement read.
  • Justice on a platter: Three of the individuals accused of involvement in the infamous Fairmont case have been handed lengthy jail terms in a separate case relating to the [redacted] assault of a girl on the North Coast in 2015. The trial, which was held in absentia due to the defendants being on the run, resulted in two being given life sentences while a third 15 years behind bars.

COVID WATCH

8 mn Pfizer jabs allocated to high schoolers

The Health Ministry has set aside 8 mn Pfizer jabs for the vaccination of high schoolers, Education Minister Tarek Shawki told Yahduth Fi Masr (watch, runtime: 3:43). He said that starting 15 November, unvaccinated teachers (like all public sector workers) won’t be allowed into their workplaces unless they test negative on a PCR test each week.

Booster shots on the horizon: The government will start looking into the administration of booster shots to those more vulnerable to the virus once it reaches its goal of vaccinating 40 mn citizens before 2022, presidential health advisor Mohamed Awad Tag El Din told Ala Mas’ouleety (watch, runtime: 8:13).

Latest vaccination figures: Some 31 mn Egyptians have received at least one jab, Tag El Din said.

Veteran actor Ahmed Khalil passed away yesterday at the age of 80 after contracting covid-19 last week, reports Al Masry Al Youm. Khalil has been hailed for his iconic small-screen roles in shows like Hawanem Garden City and Hadith Al-Sabah wal Masaa, as well as his earlier theater performances. The National is out with an obituary.

The Health Ministry reported 921 new covid-19 infections yesterday, down from 929 the day before. Egypt has now disclosed a total of 339,335 confirmed cases of covid-19. The ministry also reported 56 new deaths, bringing the country’s total death toll to 19,186.

PLANET FINANCE

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ADX follows our lead on SPACs: The Abu Dhabi Securities Exchange and the Department of Economic Development have issued a proposal to the country’s securities regulator that, if approved, would allow blank-check firms to list on its bourse. The Financial Regulatory Authority greenlit a similar proposal to allow the establishment of blank-check firms just last week.

If you must SPAC, please SPAC at home: The bid to bring SPACs to the EGX seems to have been triggered by Egyptian start-up Swvl’s decision earlier this year to IPO on the US Nasdaq via a merger with a blank-check firm. Similarly, Abu Dhabi lost out on a public listing for homegrown startup Anghami when the firm chose to pursue a SPAC merger on the tech-heavy US index.

Look out for news on Anghami’s blank-check bid: The company has a deadline of 11 November to pull the trigger on its SPAC transaction with Vistas Media Acquisition Company. Things have been very quiet on this front since an extension on the execution date agreed earlier this year.

Other financial headlines worth noting:

  • Dubai business activity hits two-year high: Rising demand and increased tourism activity thanks to Expo 2020 helped push Dubai’s PMI (pdf) to 54.5 in October, from 51.5 the month prior — the quickest rate of growth in two years.
  • KSA is tapping global debt markets for the third time this year: Saudi Arabia is aiming to raise USD 4-8bn through a USD-denominated sukuk issuance, a source told Bloomberg, as the kingdom looks to lock in cheaper debt amid favorable economic conditions.

Up

EGX30

11588.42

+0.8% (YTD: +6.9%)

None

USD (CBE)

Buy 15.66

Sell 15.76

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USD at CIB

Buy 15.66

Sell 15.76

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Interest rates CBE

8.25% deposit

9.25% lending

Down

Tadawul

11,753

-0.8% (YTD: +35.7%)

Up

ADX

8,196

+0.2% (YTD: +62.5%)

Up

DFM

3,120

+0.5% (YTD: +25.2%)

Down

S&P 500

4,685

-0.4% (YTD: +24.7%)

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FTSE 100

7,280

-0.3% (YTD: +13.1%)

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Brent crude

USD 85.12

+2.0%

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Natural gas (Nymex)

USD 4.98

-8.3

Up

Gold

USD 1,831/oz

+0.2

Up

BTC

USD 67,479

+1.8% (as of midnight)

THE CLOSING BELL-

The EGX30 rose 0.8% yesterday on turnover of EGP 810.5 mn (45.9% below the 90-day average). Regional investors were net buyers. The index is up 6.9% YTD.

In the green: CIB (+2.7%), EKH-EGP (+2.3%) and EKH-USD (+2.1%).

In the red: Raya Holding (-3.5%), AMOC (-3.4%) and Heliopolis Housing (-3.1%).

hardhat

Breaking down the 21 new transport infrastructure agreements signed at TransMEA: Egypt signed a total of 21 new agreements with local and international companies at the TransMea 2021 transport expo on Monday and yesterday, according to ministry statements (here and here, both pdf). The agreements, which range from contracts for feasibility studies to funding to supply agreements, encompass the country’s railway projects, Cairo Metro, as well as maritime and inland logistics infrastructure. We break down the agreements signed under each of these infrastructure areas, and what they entail (including how they’ll be funded).

1- CAIRO METRO

French train manufacturer Alstom will provide 55 new trains for Cairo Metro Line 1 under a EUR 876 mn contract with the National Authority for Tunnels (NAT). Alstom will also supply spare parts and provide maintenance for the duration of the eight-year contract, financed by the French government.

Japan’s Mitubishi signed a EGP 5.8 bn contract to provide 23 trains for the first phase of Cairo Metro Line 4, which will link between Cairo, Giza and Sixth of October City in its first phase. In its second phase, the line will connect with New Cairo, the ministry said. Mitsubishi will also provide maintenance services for two years. A USD 1.2 bn loan from the Japanese International Cooperation Agency will contribute towards financing the contract.

A consortium between Spanish railway supplier CAF and Japan’s Mitsubishi landed a EUR 185 mn contract to overhaul 23 railcars operating on Cairo Metro Line 1. The contract will be paid partially in EGP and partially in EUR, and will be financed through a EUR 200 mn loan from the Spanish government. The two companies had expressed interest in the project last year.

The Transport Ministry signed an MoU with Spain’s CAF and Mitsubishi to upgrade and maintain the railcars for Cairo Metro Line 2, with a joint Spanish-Japanese financing offer to be drawn up and evaluated within the next two months. The final details of the contract should be ironed out and ready for signing in January 2022. Mitsubishi, the original supplier of the trains, will help CAF to evaluate their current condition and identify the required maintenance work.

South Korea’s Hyundai Rotem will partner with the National Egyptian Railway Industries Company (NERIC) to locally produce 320 railcars for Metro Lines 2 and 3, according to a framework agreement signed at TransMEA. This agreement comes as part of the government’s plans to localize the railcar manufacturing industry, the statement notes.

Coming soon: Cairo Metro Line 6. The NAT signed an MoU with a consortium of the UK’s Aegis Rail and France’s Setec to prepare preliminary feasibility studies for setting up a sixth metro line (Reminder: France is giving Egypt EUR 2 bn in credit facilities for the metro line, partially to encourage French companies’ participation). The line — which is expected to come with a EGP 62.4 bn price tag — will run from Al Khusus city to Tora El-Balad. The 30 km line saw its master contract awarded to US infrastructure giant Bechtel late last year.

2- RAILWAYS

The government’s infrastructure development plan puts transportation as one of the major priority areas, with some EGP 141 bn slated for railway development alone for a much-needed overhaul of the railway system from early 2020 through 2022. Railways and transport were two of the top priority areas laid out in the Madbouly government’s infrastructure public spending plan for the current fiscal year.

High-speed electric trains: Deutsche Bahn and DP Consulting signed an MoU with the NAT to present a bid to operate the first line of the high-speed electric train, which is expected to link Ain Al Sokhna with Matrouh. In September, the government had signed a USD 4.5 bn contract to build the country’s first high-speed rail line. A consortium of Siemens Mobility, Orascom Construction and Arab Contractors agreed with NAT to design, install and maintain the line, which will run 660 km.

US railway equipment provider Wabtec is supplying the Egyptian National Railway (ENR) with 100 new locomotives at an estimated cost of EUR 248 mn, financed by the European Bank for Reconstruction and Development (EBRD). The contract also includes an eight-year, EUR 157 mn fleet maintenance agreement. The company is expected to deliver the locomotives in 2023, according to a statement.

Other railway agreements:

  • Spanish train manufacturer Talgo is looking to provide us with seven sleeper trains, after signing an MoU with ENR;
  • Two framework agreements with France’s Thales and  Alstom to install new automatic signaling systems, along with modernizing and developing three railway lines in Egypt;
  • A cooperation protocol with Spain’s Revenga to supply ENR with an electronic ticket booking system;
  • An MoU with Germany’s Deutsche Bahn and Elsewedy Electric to set up technical and vocational training centers for railway workers and skill-building;
  • Another MoU with Deutsche Bahn and Elsewedy to provide consulting services to the ENR to improve its capacity to operate and maintain Egypt’s rail network;
  • An MoU with Austria’s Voestalpine to boost the output of the ENR’s workshop in Abbasiya.

3- MARITIME TRANSPORT

Abu Dhabi Ports (ADP) landed an MoU to build, operate, and manage a multi-purpose terminal at the Safaga Port. Under the agreement, which the port operator signed with the Egyptian Group for Multipurpose Terminals, ADP will need to run feasibility studies on the terminal. The Safaga Port terminal was one of nine proposed PPP infrastructure projects that were given preliminary approval by the cabinet in June. ADP had signaled earlier this week that it could invest as much as USD 500 mn in Egypt if it lands the Safaga Port contract, as well as a separate PPP contract to construct the 250-feddan dry dock in Tenth of Ramadan.

The Arab Company for Supply Chains signed an MoU to build, operate, and manage a new grain and oil terminal at the Dekheila Port. The terminal has been in the works for several years, with the EBRD expressing interest back in 2018 in helping Egypt launch the tender. Former Transport Minister Hisham Arafat had estimated at the time that the project would require an investment of USD 100 mn.

French shipping company CMA CGM signed a cooperation agreement to operate and manage the Tahya Misr multipurpose terminal in Alexandria Port by 2022.

A consortium of France’s Bolloré Transport & Logistics, Elsewedy Electric and the Egyptian Group for Multi-Purpose Stations also signed an MoU to design, build, manage and operate a multi-purpose terminal at the Ain Sokhna Port.

4- DRY PORTS

Two more MoUs for dry port feasibility studies: A consortium led by Egypt’s Special Group signed an MoU to conduct preliminary feasibility studies on the Damietta dry port, as well as a separate agreement to study the feasibility of setting up a dry port in Sadat City.

CALENDAR

November: The French-Egyptian Business Forum is set to take place in the Suez Canal Economic Zone.

November: Egypt will host another round of talks to reach a potential Egyptian-Eurasian trade agreement, which can significantly contribute to increasing the volume of Egyptian exports to the Russia-led bloc that includes Armenia, Belarus, Kazakhstan and Kyrgyzstan.

31 October – 12 November (Sunday-Friday): 2021 United Nations Climate Change Conference (COP26), Glasgow, United Kingdom.

7-10 November (Sunday-Wednesday): Cairo ICT 2021, Egypt International Exhibition Center, New Cairo.

7-10 November (Sunday-Wednesday): TransMea 2021, Egypt International Exhibition Center, New Cairo.

11 November (Thursday): Deadline for Anghami SPAC merger.

15 November (Monday): Unvaccinated public sector workers won’t be allowed into their workplaces.

15 November (Monday): Car dealerships must comply with new consumer protection rules requiring price stickers to be attached to vehicles.

15-21 November (Monday-Sunday): Intra-African Trade Fair 2021, Durban, KwaZulu-Natal, South Africa.

16-17 November (Tuesday-Wednesday): Africa fintech summit, Cairo.

17 November (Wednesday): The International Finance Corporation hosts the Sustainable Finance Forum.

18-19 November (Thursday-Friday): British royal family members Prince Charles and the Duchess of Cornwall visit Cairo.

25 November (Thursday): Rameda Pharma’s annual general meeting (pdf), at which it will decide on the sale of a 5% stake in the company from an individual shareholder to an unnamed institutional investor.

25-27 November (Thursday-Saturday): RiseUp Summit, Cairo, Egypt.

26 November-5 December (Friday-Sunday): The 43rd Cairo International Film Festival.

29 November-2 December (Monday-Thursday): Egypt Defense Expo, Egypt International Exhibition Centre.

30 November (Tuesday): Launch of open call by KfW for green project proposals in Egypt as part of their Investing for Employment facility (pdf).

1 December (Wednesday): Unvaccinated members of the public will be banned from government buildings from this date; unvaccinated students will be prevented from accessing university campuses.

1 December (Wednesday): Government departments will begin moving to offices in the new capital.

7-8 December (Tuesday-Wednesday): North Africa Trade Finance Summit.

8-10 December (Wednesday-Thursday): Global Forum for Higher Education and Scientific Research (GFHS), Cairo, Egypt.

12-14 December (Sunday-Tuesday): Food Africa Cairo trade exhibition, Egypt International Exhibition Center, Cairo, Egypt.

13-17 December: United Nations Convention against Corruption, Sharm El Sheikh, Egypt.

14-19 December (Tuesday-Sunday): The Cairo International Festival for Experimental Theater.

14-15 December (Tuesday-Wednesday): The Federal Reserve meets to review interest rates.

15 December (Wednesday): Deadline for joint stock companies and investment companies in Cairo to join e-invoicing platform.

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

1Q2022: Launch of the Egyptian Commodities Exchange.

7 January 2022 (Friday): Coptic Christmas.

27 January 2022 (Tuesday): National holiday in observance of 25 January revolution anniversary / Police Day.

14-16 February 2022 (Monday-Wednesday): Egypt Petroleum Show, Egypt International Exhibition Center, New Cairo, Egypt.

19 February 2022 (Saturday): Public universities begin the second term of the 2021-2022 academic year.

1H2022: The World Economic Forum annual meeting, location TBD.

2 April 2022 (Saturday): First day of Ramadan (TBC).

22-24 April 2022 (Friday-Sunday): World Bank-IMF spring meeting, Washington D.C.

24 April 2022 (Sunday): Coptic Easter Sunday (holiday for Coptic Christians).

25 April 2022 (Monday): Sham El Nessim.

25 April 2022 (Monday): Sinai Liberation Day.

May 2022: Investment in Logistics Conference, Cairo, Egypt.

2 May 2022 (Monday): Eid El Fitr (TBC).

16 June 2022 (Thursday): End of 2021-2022 academic year for public schools.

27 June-3 July 2022 (Monday-Sunday): World University Squash Championships, New Giza.

30 June 2022 (Thursday): June 30 Revolution Day, national holiday.

2H2022: IEF-IGU Ministerial Gas Forum, Egypt. Date + location TBA.

8 July (Friday): Arafat Day.

9-13 July (Saturday-Wednesday): Eid Al Adha, national holiday.

30 July (Saturday): Islamic New Year.

6 October (Thursday): Armed Forces Day, national holiday.

8 October (Saturday): Prophet Muhammad’s birthday.

18-20 October 2022 (Tuesday-Thursday): Mediterranean Offshore Conference, Alexandria, Egypt.

**Note to readers: Some national holidays may appear twice above. Since 2020, Egypt has observed most mid-week holidays on Thursdays regardless of the day on which they fall and may also move those days to Sundays. We distinguish below between the actual holiday and its observance.

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