Wednesday, 3 August 2022

AM — Cement production quotes are sticking around for another year

TL;DR

WHAT WE’RE TRACKING TODAY

Good morning, wonderful people. We have a particularly packed issue for you on this very beautiful morning — and the promise of another busy news day to come — so let’s jump straight in:

WHAT’S HAPPENING TODAY-

Our friends at Chimera should find out today how much of Beltone Financial they have acquired via a mandatory tender offer. Shareholders have until today to subscribe to Chimera Investment’s MTO for the financial services firm. The Abu Dhabi-based outfit has already locked in a 56% stake in Beltone after Orascom Financial last week agreed to sell its shares. Chimera is offering to pay EGP 1.485 per share for up to 90% of Beltone, valuing it at around EGP 690 mn.

It’s PMI day: We’ll get an idea of how the private sector fared in July when S&P Global releases its latest purchasing managers’ index (PMI) shortly after we hit “send” on this morning’s issue. The index fell to its lowest level in two years in June as surging inflation hit demand and output. We’ll also be getting PMI figures for Saudi Arabia and the UAE at the same time as Egypt’s figures drop. You can find them all here once they’re released.

OPEC+ is meeting today: Will it raise production? The most we’re going to get is a small increase in supply — and even that may be a long shot, according to what sources have told the business press. Most of the sources that talked to Reuters dismissed an output hike as unlikely while delegates speaking to the Wall Street Journal say the choice is between freezing production at current levels or a small increase. The meeting comes amid pressure from the US on oil producers to push down on prices which have remained above USD 100 a barrel since Russia invaded Ukraine in February.

How much more capacity is there? Saudi Arabia appears to have heeded the Biden administration’s demands for more crude, and last month pumped the most since April 2020 after raising output by 180k barrels a day, according to Bloomberg. All in all, OPEC added another 270k barrels a day to global supply during the month, with the UAE and Kuwait also raising output to offset shortfalls in other countries such as Nigeria, Iran and Angola.

It’s the second day of the Egypt- and UN-led regional climate roundtable in Addis Ababa, Ethiopia: The event — the first of five regional roundtables being held around the world ahead of COP27 in November — brings together African climate negotiators and global officials to discuss climate finance for three days in the Ethiopian capital. COP27 President Sameh Shoukry, Mark Carney (UN climate envoy and co-chair of the Glasgow Financial Alliance for Net Zero) and UN Deputy Secretary-General Amina Mohamed are among those in attendance.

National Dialogue board will talk about the economy: The board of trustees overseeing preparations for the National Dialogue will meet tomorrow to discuss the economic agenda.

THIS WEEK-

Egypt is set to sign an MoU later this week with a Chinese home appliances manufacturing company to build an industrial zone in Egypt with “huge investments,” according to a cabinet statement out yesterday. No further details were disclosed.

Erdogan + Putin to talk Ukraine grain pact on Friday: Russian President Vladimir Putin will meet his Turkish counterpart, Recep Tayyip Erdogan, on Friday to discuss the agreement the two countries signed with Ukraine to resume grain exports from the war torn country via the Black Sea, Putin’s spokesman, Dmitry Peskov, told reporters, Bloomberg reports. The meeting, which will take place in the Black Sea resort city of Sochi, will see the two leaders “synchronize watches on the subject of the effectiveness of this mechanism for exporting grain from Ukrainian ports,” Peskov said.

SPEAKING OF THE WHEAT PACT- The first vessel to carry grain out of Ukraine since Russia’s invasion has arrived safely in Turkey, Turkey’s Defense Ministry said yesterday. The ship, carrying 26k tons of grain, had left the port of Odesa on Monday morning. A delegation from the Joint Coordination Centre (JCC) in Istanbul is expected to inspect the ship today, the ministry said.

Another vessel could be heading out of Ukrainian ports today: “We hope that there will be some more outbound movement tomorrow,” UN spokesman Stephane Dujarric told reporters in New York, according to Reuters. About 27 ships are currently loaded at the three Ukrainian ports and ready to go, Dujarric said. Turkey expects one grain ship to leave Ukraine every day as long as the agreement between Ukraine and Russia holds up, a senior official told the newswire.

Remember: Ukrainian exports are still in a “trial period,” with a limit of three ships a day traversing the new safe-passage corridors established as part of the country’s pact with Russia and Turkey. Officials hope that exports could rise to as much as 3 mn tons a month in the next four to six weeks if all goes well.

THE BIG STORY ABROAD-

Will Pelosi’s visit to Taipei provoke another Taiwan Straits Crisis? That’s the question being raised across the global media this morning after the US House Speaker flew to the disputed island yesterday in defiance of Beijing, which had threatened to respond militarily to the provocation. Beijing’s initial reaction to her landing was limited to banning imports from Taiwanese food brands. But the People’s Liberation Army is now preparing to hold live-fire naval drills in waters surrounding the island, significantly raising tensions between the two countries and increasing the likelihood of a military confrontation. (AP | Reuters | Politico | Bloomberg | FT | WSJ | NYT | Washington Post)

MARKET WATCH-

Fed officials are trying to ward off complacency in the financial markets as the idea that the central bank is about to slow the pace of interest rate hikes takes hold. Bond yields fell and stocks surged last week after Chairman Jerome Powell said that the central bank will likely reduce the size of its rate hikes going forward, a reaction policymakers have tried to reverse this week by making clear that large increases are still on the table for future meetings. The Fed has raised rates by 150 bps since June in what is the most rapid tightening of policy since the 1990s. Officials this week warned the market that the central bank is “nowhere near” done tackling inflation and that it will need to see “very compelling evidence” that inflation is coming down before reversing course. Bloomberg and the Wall Street Journal have more.

Did the markets get the message? The response to the hawkish comments saw the USD surge 1%, yields spike, equities slip and gold futures fall.

Take all predictions with a pinch of salt: A lot can happen between now and the Fed’s next meeting, which won’t take place until late September. All it takes is a single inflation print to alter the direction of policy (the June meeting is a great case in point).

CIRCLE YOUR CALENDAR-

We’re on the lookout for a number of key macro figures this week and next:

  • Foreign reserves figures for July will likely be released at the end of this week or the beginning of the next;
  • Inflation data for July will land on Wednesday, 10 August.

The Central Bank of Egypt will meet to discuss interest rates on Thursday, 18 August.

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

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*** 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, and urban development, as well as social infrastructure such as health and education.

In today’s issue: We take a look at the government’s Provincial Capitals Development Project, Darah, which has been designed by the government’s Urban Development Fund to generate more housing and improve the quality of services and infrastructure in often forgotten capital cities in governorates outside of Cairo. With a price tag of some EGP 120 bn in its first phase, the project is slated to bring about a certain kind of urban renewal we’ve seen take form in various places around Cairo in recent years, to more governorates around the country.

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INDUSTRY

Cement producers welcome another year of production quotas — and a slow ramp up of market supply

Cement production quotas are sticking around for another year: The Egyptian Competition Authority (ECA) has heeded cement companies’ calls to leave cement production curbs in place for another year — but will allow output to rise as demand picks up, Ahmed Shireen Korayem, head of the cement division at the building materials chamber of the Federation of Egyptian Industries (FEI), told Enterprise.

Production has been capped for a year to fight the oversupply crisis: Cement production curbs were introduced in July 2021 to reduce a chronic supply glut that threatened the survival of a number of industry players. Companies have been required to cut production by at least 10.69% for the past 12 months, a measure designed to remove some of the excess supply and support prices. The cap came into effect mid-July last year and was originally intended to last for one year.

Prices have rebounded as a result: As of May, prices had risen almost 50% since the caps were introduced, according to Housing Ministry data.

The curbs will now be eased: The competition watchdog has revised upwards its demand estimates and will look to allow supply to rise by about 8% over the next 12 months, Korayem said, while declining to disclose exact figures.

INDUSTRY REAX-

A healthy surplus? Speaking to Enterprise yesterday, Lafarge Egypt CEO Jimmy Khan called it a “positive and practical” decision that should produce a slight surplus to prevent shortages. The company estimates that the decision will increase supply to 55 mn tons this year, slightly more than its 50 mn-ton demand forecast. “This surplus… will ensure that there is no shortage in cement supplies to all consuming sectors, especially national projects,” he said.

Is this the best way to solve oversupply? “It would be more appropriate for the ECA to direct companies towards exporting their surplus production, given the competitive price of the Egyptian product in foreign markets and the government’s support for freight transporting cement to African countries at a reduced cost of 80%,” Ahmed El Zeini, head of the building materials division at the Chamber of Commerce, told Enterprise.

Cement makers insist the move is good for everyone: “The approval for renewing the quota will allow the market to behave in a dynamic way governed by demand and supply and allow businesses to run in a healthy context,” Cemex Egypt and UAE CEO Carlos Emilio Gonzalez told Enterprise. Korayem agrees, telling us that increasing output in line with demand will help keep prices in check for consumers and stabilize the market.

DEBT WATCH

NUCA plans huge EGP 20 bn securitized bond issuance

NUCA wants to break its securitization record: The New Urban Communities Authority (NUCA) is seeking regulatory approval for a record-breaking EGP 20 bn securitized bond issuance, the Financial Regulatory Authority (FRA) said in a statement (pdf) yesterday.

WATCH THIS SPACE- The statement is light on information about the prospective issuance. Sources we spoke to at the Housing Ministry and the FRA yesterday said that details are pending regulatory approval.

But we have an idea about when the sale could go ahead: The authority hopes to take the issuance to market by late August or early September, Imane Raouf, partner at Dreny & Partners Law Firm, told Enterprise. Dreny & Partners legal counsel to NUCA on the issuance.

NUCA currently holds the record for the largest securitized issuance in Egypt for a EGP 10 bn issuance closed in 2020. The proceeds were earmarked to finance development of new urban areas including the new administrative capital and New Alamein.

There’s no word on who may have appetite for the issuance, but two years ago the authority placed its EGP 10 bn issuance with EBRD as well as QNB, Attijariwafa and Suez Canal Bank.

BY OUR COUNT- This issuance would take Egypt’s securitization volume in 2022 to almost EGP 37 bn. Companies have sold around EGP 16.6 bn of securitized bonds so far this year, according to data tracked by Enterprise. This exceeds the EGP 15.8 bn taken to market during the whole of 2021.

Advisors: CIB will act as the financial advisor for the issuance, while Dreny and Partners is legal counsel. KPMG Hazem Hassan will serve as auditor.

INVESTMENT WATCH

Vitro could invest USD 400 mn in Egypt + more interest from Qatari investors

One of the world’s largest glass companies could be coming to Egypt: Mexican glass manufacturer Vitro plans to expand to Egypt and invest USD 400 mn to build two factories, GAFI head Mohamed Abdel Wahab said at a meeting with Prime Minister Moustafa Madbouly yesterday, according to a cabinet statement. The factories would produce flat glass and glass containers — most of which would be exported abroad — and create 1.5k jobs, the statement said.

Vitro is one of the largest glass manufacturers in the world, though doesn’t yet have a presence in Africa. The company is present across North America, several countries in South America and Europe, and in China.

ALSO FROM THE MEETING-

More on potential Qatari investments: A group of Qatari investors is looking to invest in a number of projects in Egypt, Abdel Wahab said, without disclosing how much they plan to invest. They include a 25k-feddan project to grow grains, a livestock farm with capacity for 50k animals, a hospital, and a mall.

Qatar said in March it would invest USD 5 bn in Egypt to help shore up the economy. Qatari officials have so far discussed investing USD 2-3 bn in Egypt’s real estate sector and equity stakes in companies with the Madbouly government.

The government has been stepping up its efforts to attract fresh FDI into the country: Egypt has been pushing to lure investments into the country from across the world, but particularly from allies in the GCC, who pledged over USD 22 bn in support of our finances.

BANKING

Banque Misr to open representative office in Kenya

Banque Misr is entering Kenya: Banque Misr is set to open a representative office in Kenya after receiving regulatory approval from the Central Bank of Kenya, according to a statement (pdf) from the central bank yesterday. The move will play a “catalytic role in strengthening the long-standing trade relationship between Egypt and Kenya,” the central bank said.

It’s not allowed to do actual banking, though: Representative offices are not allowed to provide banking services and can only act as marketing and liaison offices for their parent banks.

It will be doing banking in Somalia: The decision by the Kenyan central bank comes a few weeks after Somalia handed the state-owned bank a banking license, allowing it to become one of the first international banks to operate in the country.

Banque Misr’s international footprint: Banque Misr currently has branches in the UAE, France, Germany and Lebanon, and representative offices in Russia, China, Italy and Korea.

Appetite for Africa: CIB, Egypt’s largest private-sector bank, has a full bank license in Kenya and has opened a rep office in Ethiopia.

CAPITAL MARKETS

Edita launches new share buyback program

Edita announces share buybacks: Edita will buy back 5% of its shares over the next two months in a bid to support its share price, it said in a disclosure (pdf) to the bourse yesterday. The EGX-listed snackmaker said it would repurchase 36.2 mn shares, a program that would cost it almost EGP 295 mn at its current share price. Edita shares closed at EGP 8.14 yesterday.

What they said: Edita stock “is trading at a deep discount to fair value with huge upside potential,” IR director Menna Shams El Din told Enterprise. “We believe the best investment at the moment is investing in our company … We are bullish on the Egyptian snack food market, and we are focusing on regional expansion, with Morocco being the first milestone,” she added.

Edita has held up fairly well this year amid a heavy sell-off on the Egyptian stock market. The company’s share price has fallen less than 4% year-to-date, while the benchmark EGX 30 index has fallen 21%.

REMEMBER- Edita isn’t the only undervalued stock on the EGX right now. Last month the EGX 30 hit its lowest level since November 2016, triggered by a sell-off among foreign investors caused by worries over soaring global inflation, rising interest rates and a possible recession in the US.

Buybacks fuelled by rising profitability: Edita reported record revenues in 1Q 2022, helping the company deliver one of its most profitable opening quarters on record. This follows a strong 2021 for the company, which saw it post a 55% rise in net income EGP 471.9 mn. Edita is expected to report its 2Q earnings in the coming days.

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CONSTRUCTION

Orascom Construction’s new awards rise 55% y-o-y in 2Q 2022 thanks to high-speed rail contract

Orascom Construction (OC) saw new awards rise 55% y-o-y in 2Q 2022 to hit USD 1.8 bn, the company said in a statement (pdf), bringing new awards for the first half of the year to USD 2.4 bn. The company's total consolidated backlog now sits at c. USD 6.4 bn.

High-speed rail is big for OC: The contractor in May signed a contract along with Siemens Mobility and Arab Contractors for the second phase of the planned 2k-km high-speed rail line, in which OC’s share is worth USD 1.2 bn. Some 70% (or USD 1.26 bn) of the new awards in 2Q 2022 were for local projects, while the remaining 30% were for US-based projects, according to the release.

Shareholders approve dividend payout: OC will distribute USD 27 mn worth of dividends this month after shareholders yesterday approved plans to pay out USD 0.2313 per share on 24 August, the company said in a regulatory filing (pdf) yesterday. Investors with shares in OC on the Nasdaq Dubai will receive their dividends in USD, while those with shares in the EGX will receive them in EGP.

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LAST NIGHT’S TALK SHOWS

Divergent views on the causes of the current issues facing the Egyptian auto industry were on display on Al Hayah Al Youm last night, when Mohamed Sherdy spoke to YouTuber Essam Ghanayem and head of the car traders’ federation Osama Abou El Magd about the crisis in the sector (watch, runtime: 28:48). In a sometimes heated debate, the two car connoisseurs differed on whether the sources of the problems are at home — overpricing and import restrictions — or abroad, with global inflation and supply chain issues posing problems.

Removing restrictions on imports of used cars could offer the industry some reprieve, Ghanayem suggested — a view that would be hotly contested by licensed distributors, particularly those that have invested 100s of mns in assembly facilities. Ghanayem didn’t explain how the idea would make it possible for banks to somehow find FX for importers who want to bring in used vehicles. Another short-term solution would be removing restrictions on Egyptian expats abroad to ship their cars into the country — a restriction that sends car demand surging, especially during the peak summer season when expats return home, Ghanayem said, adding that this issue could compound the current car shortage in the country.

Ask a distributor and they’ll tell you the problem is simple: They can get letters of credit open for imports of spare parts and tires — but cars are another story. L/Cs for fully assembled vehicles (completely built up, or CBU units, in industry-speak) are just about impossible to obtain. Most are having more success with L/Cs for assembly kits (or completely knocked-down — CKD to insiders), albeit at much lower volumes than they want. Distributors have comparatively better access to L/Cs for spare parts and tire imports.

Why CKD and no CBU? CKD assembly lines employ thousands of people. Cars that are imported fully assembled don’t support nearly as many jobs.

Background: Car sales have been falling on a monthly basis as the automotive sector is being buffeted by a multitude of headwinds, including a lack of financing for imports, rising inflation, component shortages and the EGP devaluation in March.

President Abdel Fattah El Sisi wants the government to hurry up developing the textiles industry and focus on getting the world’s largest spinning and weaving factory in Mahalla Al Kobra up and running by next year. This came during a meeting with Prime Minister Moustafa Madbouly and Public Enterprises Minister Hisham Tawfik yesterday, which got coverage on Masaa DMC (watch, runtime: 6:25) and Al Hayah Al Youm (watch, runtime: 2:35).

The talking heads were also concerned about the possibility of a global crisis erupting between the US and China due to US House Speaker Nancy Pelosi’s visit to Taiwan, which we have more on in this morning’s What We’re Tracking Today section, above. Sada El Balad (watch, runtime: 11:38), Ala Mas’ouleety (watch, runtime: 4:42) and Masaa DMC (watch, runtime: 22:26) all covered the developing story and its potential ramifications.

EGYPT IN THE NEWS

It’s a mixed bag in the foreign press this morning: Imprisoned activist Alaa Abdel Fattah is the subject of a New York Times opinion piece while energy industry publication Power Technology asks whether Egypt’s blend of natural gas and renewables can provide a blueprint for other countries looking to transition to cleaner energy sources. Meanwhile, The National covers the Supreme Court’s ruling that a man who reneges on the qaema — the list of items a bride’s family buys for the marital home — will not be found by the court to have acted dishonorably.

ALSO ON OUR RADAR

Record Suez Canal revenues in July: Revenues at the Suez Canal reached a record high of USD 704 mn in July, Suez Canal Authority Chairman Osama Rabie said yesterday. This is 32% higher than July 2021. The strong revenues were backed by a rise in tonnage transiting the canal, which hit a record 125.1 mn tons during the month, he said.

Conditions have been kind to the canal of late: Suez Canal revenues jumped 20% to a record USD 7 bn last fiscal year thanks to a global surge in oil prices and freight rates, as well as the crisis in Ukraine making the canal more attractive than other routes.

IN REAL ESTATE- EGX-listed MNHD reports EGP 400 mn at Elect, its new development at Taj City, since sales opened on 26 July 2022. That represents c. 50% of the development’s first phase, the company said in a statement (pdf). Taj City is a 3.5 mn sqm mixed-use development in New Cairo. “More than 43% of MNHD’s land bank at Taj City was unlaunched at the close of Q1 2022, leaving significant room for profitable residential and commercial development at the strategically located project,” the company said.

OTHER THINGS we’re keeping an eye on this morning:

  • Red Sea jet ski ban: The Red Sea Governorate has banned the use of jet skis on safety grounds and could impound vehicles that are used. The ban was first issued in 2010 but had enforced until now, according to a government statement. The ban comes just days after a jet ski accident near Marina on the Mediterranean coast killed one and injured two.
  • Palestinian singer and composer Nai Barghouti said Monday that she was denied entry to Egypt for unknown reasons, forcing her to cancel a series of concerts in Cairo and Alexandria. (Statement)

PLANET FINANCE

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Emerging markets are turning to syndicated loans after being effectively shut out of bond markets due to heightened commodity prices and rising borrowing costs, the Wall Street Journal reports. More than a dozen governments in Africa and the Middle East took out syndicated loans worth about USD 13 bn during the first half of the year, according to a Standard Chartered analysis of Dealogic data, nearly double the figure in the same period last year.

Illustrating the tightening conditions: Not a single emerging-market government turned to the foreign-currency debt markets in July, according to Tellimer. This is “the most significant drought in financing since the ‘taper tantrum’ of 2013,” when rising US rates caused an exodus of capital from emerging markets, the WSJ writes.


EARNINGS WATCH-

#1- BP reported its highest earnings in 14 years in 2Q 2022. The oil supermajor increased dividends by 10% after net earnings tripled y-o-y to USD 8.5 bn during the quarter, according to its earnings (pdf) released yesterday. The growth was driven by strong refining margins and “exceptional” performance in its secretive oil trading business.

#2- Uber just became cashflow positive for the first time ever: The ride-hailing giant posted free cashflow of USD 382 mn in 2Q 2022 on the back of a post-pandemic rebound in travel and commuting, according to its earnings release. That’s more than triple the sum analysts had expected, the Financial Times writes. Uber shares jumped almost 19% on the news.

Up

EGX30

9,442

+0.2% (YTD: -21.0%)

Up

USD (CBE)

Buy 18.98

Sell 19.09

Up

USD at CIB

Buy 19.01

Sell 19.07

None

Interest rates CBE

11.25% deposit

12.25% lending

Down

Tadawul

12,311

-0.2% (YTD: +9.1%)

Up

ADX

9,895

+1.2% (YTD: +16.6%)

Down

DFM

3,348

-0.9% (YTD: +4.8%)

Down

S&P 500

4,091

-0.7% (YTD: -14.2%)

Down

FTSE 100

7,409

-0.1% (YTD: +0.3%)

Down

Euro Stoxx 50

3,685

-0.6% (YTD: -14.3%)

Down

Brent crude

USD 99.83

-0.2%

Down

Natural gas (Nymex)

USD 7.71

-7.0%

Up

Gold

USD 1,789.70

+0.1%

Up

BTC

USD 23,084

+0.4% (YTD: -50.2%)

THE CLOSING BELL-

The EGX30 rose 0.2% at today’s close on turnover of EGP 343,84 mn (57.7% below the 90-day average). Foreign investors were net sellers. The index is down 21% YTD.

In the green: QNB Alahli (+10.1%), Ibnsina Pharma (+7.1%) and Qalaa Holdings (+5.6%).

In the red: CIB (-2.1%), Cleopatra Hospitals (-1.9%) and Telecom Egypt (-1.3%).

Asian shares posted tentative gains this morning as “investors monitor Pelosi’s visit to Taiwan,” with only Australia’s ASX slipping into the red as of dispatch time. Major European benchmarks look set to come under selling pressure at the opening bell today, as will shares in Toronto. Futures suggest the Dow, S&P and Nasdaq should all open in the green later today.

DIPLOMACY

Shoukry + John Kerry talk climate: Foreign minister and COP27 President Sameh Shoukry spoke with US Presidential Climate Envoy John Kerry over the phone yesterday about climate issues, the Foreign Ministry said. The two sides discussed last month’s Petersberg Climate Dialogue as well as Egypt’s updated nationally determined contributions (NDCs).

ALSO- Greek and Egyptian naval forces carried out joint drills in the Mediterranean yesterday, a military spokesperson said in a statement.

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PROJECT PROFILE- Darah Provincial Capitals Development Project: At the end of 2020, the government announced the start of a new initiative called Darah, which aims to generate more housing and improve the quality of services and infrastructure in often forgotten capital cities in governorates outside of Cairo. Led by the cabinet-affiliated Urban Development Fund, Darah sets out to embark on a housing construction spree across the country expected to cost some EGP 120 bn in its initial phase, our sources tell us.

The project aims to bring residents better services to discourage cross-governorate migration: The Darah initiative aims to provide older provincial cities with services comparable to those found in more newly developed cities so that residents seeking better standards of living elsewhere in the country might reconsider moving, head of the Urban Development Fund Khaled Siddiq tells us. “We want to put an end to internal migration,” Sidiq says. “We're focused on offering better services to people from across the socioeconomic spectrum.”

Lots of new housing will be in store too: Constructing new housing units and residential communities is one of the primary objectives of the new project, which will see some local private sector involvement in their development, says Siddiq. Some 500k houses will be constructed by local firms throughout the capital cities of all 27 governorates in the form of residential communities or compounds, many of which will come equipped with parks, parking lots and green landscaping. The project will also focus on restoring the facades of older residential buildings and upgrading dilapidated buildings — which could help attract more private sector investment to these cities.

The Urban Development Fund will be the acting real estate developer that will ensure commercial services are brought into these cities alongside retail spaces, offices, and public utilities. New roads to help connect these new locations to the rest of the country’s road network are expected to be made available and will be constructed by the Armed Forces Engineering Authority.

So what’s the timeline on Darah? The project is divided into three distinct phases that will see development work undertaken in all 27 governorates in its final form. The first phase of the initiative, which will see infrastructure and housing development projects executed in 13 governorates including Suez, Fayoum, Dakahlia, Qena, Sohag, Minya, Sharqia, Menoufia, Kafr El Sheikh, and Damietta, is currently about 60% ready and is set to reach completion by September, Siddiq tells us. Some 35 housing projects spanning 1.5k feddans are already underway in these 13 initial governorates where units are expected to cost somewhere between EGP 10k and 20k per sqm, Al Ahram reports Siddiq as saying.

Second phase coming: The second phase of the initiative will kick off soon after the completion of the first phase, and is expected to see public infrastructure works in more governorates completed by June of 2023. So far no word has been mentioned yet about the start of the third and final phase of the initiative.

The project is slated to cost some EGP 120 bn in its first phase and will be partially financed through a EGP 53 bn loan, the terms of which the Urban Development Fund is currently negotiating with nine local banks, Siddiq tells us. The fund has so far reached an agreement with one state-owned bank. The total cost of the project could run up to some EGP 262 bn and could cover an area spanning 140k feddans.

Urban redevelopment initiatives have picked up steam in recent years across the country: The government’s Darah project is part of a network of restoration and redevelopment projects announced in recent years in Cairo like the Fustat Garden development, the Magra El Oyoun development project and the Old Cairo redevelopment project. Though these projects skew towards heritage restoration and are major tourist attractions, they remain part of the same drive to reshape the face of urban areas across the country.


Your top infrastructure stories for the week:

  • The UK’s DFI is planning to invest USD 6 bn in Africa over the next five years, has become an anchor investor in a USD 500 mn African infrastructure fund, and plans to open an Egyptian office.
  • El Sisi wants high-speed rail to launch ahead of time: The government wants to inaugurate the first line of the 660-km Ain Sokhna-Marsa Matrouh phase of the national high-speed rail link on 7 November.
  • Egypt will host the region’s largest polyethylene complex: President Abdel Fattah El Sisi has ordered the construction of an industrial polyethylene complex to produce plastics for the local market.
  • Train fare hikes: Metro and train fares will rise by up to 25% later this month, Transport Minister Kamel El Wazir said this week.

CALENDAR

OUR CALENDAR APPEARS in two sections:

  • Events with specific dates or months are right here up top
  • Events happening in a quarter or other range of time with no specific date / month appear at the bottom of the calendar.

AUGUST

Late July-14 August: 2Q2022 earnings season.

August: Work to extend the capacity of the Egypt-Sudan electricity interconnection to 600 MW to be completed.

August: Sharm El Sheikh will host the African Sumo Championship.

2-4 August (Tuesday-Thursday): First regional climate roundtable, Addis Ababa, Ethiopia.

2 August (Tuesday): The government hosts public consultations on its state ownership policy document with textiles players.

3 August (Wednesday): Deadline for Beltone shareholders to respond to Chimera MTO.

3 August (Wednesday): National Dialogue board of trustees meets to discuss economic agenda.

3 August (Wednesday): OPEC+ meeting.

4 August (Thursday): The government hosts public consultations on its state ownership policy document with experts and think tanks.

7 August (Sunday): The government hosts public consultations on its state ownership policy document with pre-K and K12 education players.

9 August (Tuesday): The government hosts public consultations on its state ownership policy document with higher education players.

11 August (Sunday): The government hosts public consultations on its state ownership policy document with experts and think tanks.

14 August (Sunday): Conference of Egyptian entities abroad.

14 August (Sunday): Retail portion of Ghazl El Mahalla IPO ends.

14 August (Sunday): The government hosts public consultations on its state ownership policy document with finance and ins. players.

16 August (Tuesday): The government hosts public consultations on its state ownership policy document with wood manufacturers.

16 August (Tuesday): MNHD’s general assembly meeting to decide whether to allow SODIC to go ahead with due diligence on its takeover bid.

18 August (Thursday): The government hosts public consultations on its state ownership policy document with experts and think tanks.

18 August (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

23 August (Tuesday): The government hosts public consultations on its state ownership policy document with chemical producers.

25 August (Thursday): Second regional climate roundtable, Bangkok, Thailand.

25 August (Thursday): The government hosts public consultations on its state ownership policy document with experts and think tanks.

25-27 August (Thursday-Saturday): Jackson Hole Economic Symposium.

28 August (Sunday): The government hosts public consultations on its state ownership policy document with mining and petroleum refining players.

30 August (Tuesday): The government hosts public consultations on its state ownership policy document with minerals players.

31 August (Wednesday): Late tax payment deadline.

SEPTEMBER

September: Naval Power, Egypt’s first naval defense expo

September: Central Bank of Egypt’s Innovation and Financial Technology Center to launch incubator for 25 fintech startups.

September: Egyptian-German Joint Economic Committee.

September: A delegation from Germany’s Aldi will visit Egypt to look at potential investments.

September: Government to launch an international promotional campaign for Egyptian tourism.

September: Egypt will host the second edition of the Egypt-International Cooperation Forum (ICF).

1 September (Thursday): The government hosts public consultations on its state ownership policy document with experts and think tanks.

1-2 September (Thursday-Friday): Third regional climate roundtable, Santiago, Chile.

4 September (Sunday): The government hosts public consultations on its state ownership policy document with electricity players.

6 September (Tuesday): The government hosts public consultations on its state ownership policy document with building and construction players.

6-9 September (Tuesday-Friday): Gate Travel Expo 2022, El Qubba Palace, Cairo.

7-9 September (Wednesday-Friday): African Finance Ministers to meet in Cairo to coordinate an African-led position during COP27.

8 September (Thursday): European Central Bank monetary policy meeting.

8 September (Thursday): The government hosts public consultations on its state ownership policy document with experts and think tanks.

11 September (Sunday): The government hosts public consultations on its state ownership policy document with accommodation and food services players.

13 September (Tuesday): The government hosts public consultations on its state ownership policy document with sports industry players.

11-13 September (Tuesday-Thursday): Environment and Development Forum (EDF), InterContinental City Stars, Cairo.

15 September (Thursday): The government hosts public consultations on its state ownership policy document with water and sewage utilities players.

15 September (Thursday): Fourth regional climate roundtable, Beirut, Lebanon.

18 September (Sunday): Deadline for brokerage firms, asset managers and financial advisors to register with the Egyptian Securities Federation.

20 September (Tuesday): Fifth regional climate roundtable, Geneva, Switzerland.

20-21 September (Tuesday-Wednesday): Federal Reserve interest rate meeting.

22 September (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

26–27 September (Monday-Tuesday): The Africa Women Innovation and Entrepreneurship Forum (AWIEF) at the Cairo Marriott Hotel.

OCTOBER

October: Air Sphinx, EgyptAir’s low-cost subsidiary to commence operations.

October: Fuel pricing committee meets to decide quarterly fuel prices.

1 October (Saturday): Use of Nafeza becomes compulsory for air freight.

1 October (Saturday): 2022- 2023 academic year begins for public universities.

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

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

10-16 October (Monday-Sunday): World Bank and IMF annual meetings chaired by CBE Governor Tarek Amer, Washington, DC.

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

27 October (Thursday): European Central Bank monetary policy meeting.

Late October-14 November: 3Q2022 earnings season.

NOVEMBER

November: Cairo Water Week 2022.

1-2 November (Tuesday-Wednesday): Federal Reserve interest rate meeting.

3 November (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

3-5 November (Thursday-Saturday): Egypt Fashion Week.

4-6 November (Friday-Sunday): Autotech auto exhibition, Cairo International Exhibition and Convention Center.

6-18 November (Sunday-Friday): Egypt will host COP27 in Sharm El Sheikh.

7 November (Monday): The inauguration of the first line of the high-speed rail.

7-13 November (Mon-Sun): The International University Sports Federation (FISU) World University Squash Championships, New Giza.

21 November-18 December (Monday-Sunday): 2022 Fifa World Cup, Qatar.

DECEMBER

13-14 December (Tuesday-Wednesday): Federal Reserve interest rate meeting.

13-15 December (Tuesday-Thursday): US-Africa Leaders Summit.

15 December (Thursday): European Central Bank monetary policy meeting.

22 December (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

December: The Sixth of October dry port will begin operations.

JANUARY 2023

January: EGX-listed companies and non-bank lenders will submit ESG reports for the first time.

January: Fuel pricing committee meets to decide quarterly fuel prices.

7 January (Saturday): Coptic Christmas.

25 January (Wednesday): 25 January revolution anniversary / Police Day.

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

FEBRUARY 2023

11 February (Saturday): Second semester of 2022-2023 academic year begins for public universities.

13-15 February (Monday-Wednesday): The Egypt Petroleum Show (Egyps), Egypt International Exhibition Center, Cairo.

MARCH 2023

March: 4Q2022 earnings season.

23 March (Wednesday) — First day of Ramadan (TBC). Maghreb will be at 6:08pm CLT.

APRIL 2023

17 April (Monday): Sham El Nessim.

22 April (Saturday): Eid El Fitr (TBC).

25 April (Tuesday): Sinai Liberation Day.

27 April (Thursday): National holiday in observance of Sinai Liberation Day (TBC).

Late April – 15 May: 1Q2023 earnings season.

MAY 2023

1 May (Monday): Labor Day.

4 May (Thursday) National holiday in observance of Labor Day (TBC).

22-26 May (Monday-Friday): Egypt will host the African Development Bank (AfDB) annual meetings in Sharm El Sheikh.

JUNE 2023

28 June-2 July (Wednesday-Sunday): Eid El Adha (TBC).

30 June (Friday): June 30 Revolution Day.

JULY 2023

18 July (Tuesday): Islamic New Year.

20 July (Thursday): National holiday in observance of Islamic New Year (TBC).

23 July (Sunday): Revolution Day.

27 July (Thursday): National holiday in observance of Revolution Day.

Late July-14 August: 2Q2023 earnings season.

SEPTEMBER 2023

26 September (Tuesday): Prophet Muhammad’s birthday (TBC).

28 September (Thursday): National holiday in observance of Prophet Muhammad’s birthday (TBC).

OCTOBER 2023

6 October (Friday): Armed Forces Day.

Late October-14 November: 3Q2023 earnings season.

EVENTS WITH NO SET DATE

2H 2022: The inauguration of the Grand Egyptian Museum.

2H 2022: IEF-IGU Ministerial Gas Forum, Egypt. Date + location TBA.

2H 2022: The government will have vaccinated 70% of the population.

3Q 2022: Ayady’s consumer financing arm, The Egyptian Company for Consumer Finance Services, to release its first financing product.

3Q 2022: Swvl to close acquisition of Urbvan Mobility.

4Q 2022: Infinity + Africa Finance Corporation to close acquisition of Lekela Power.

End of 2022: Decent Life first phase scheduled for completion.

End of 2022: e-Aswaaq’s tourism platform will complete the roll out of its ticketing and online booking portal across Egypt.

2023: Egypt will host the Asian Infrastructure Investment Bank’s Annual Meeting of the Board of Governors in 2023.

1Q 2023: Adnoc Distribution’s acquisition of 50% of TotalEnergies Egypt to close.

**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 above between the actual holiday and its observance.

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