Sunday, 4 September 2022

AM — Of FX, privatization and green investment…

TL;DR

WHAT WE’RE TRACKING TODAY

Good morning, friends, and welcome to the first full week of September. With just a month left in 3Q, the themes this morning are pretty typical of the year to date: The foreign exchange crunch, investment in green energy ahead of COP 27, and the fate of the privatization program. It’s the trifecta of 2022.

Before we get started: Happy labor (labour) day to all of our readers in the United States and Canada. We hope you’re enjoying the last weekend of summer.

And an apology: We’re sorry to have missed our customary 6am CLT deadline this morning. We’ve resolved the technical glitch for email and are working to fix it on web. We expect to be on time tomorrow. Sorry, folks…

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Tell us how you’re feeling about your business and the wider economy and we’ll be back with the results just in time to give you a sense of what everyone else is thinking heading into budget season.

How has 2022 been for your business? And how do you feel about what’s left of the year? Are you investing? Do you plan to hire new staff (or make cuts to your existing staff) now or in 2023? What’s the USD / EGP rate you expect to use for your 2023 budget? Where do you see your industry as a whole heading?

Make your voice heard in our Fall Reader Survey. It won’t take more than a few minutes to complete.

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WATCH THIS SPACE #1- The privatization programme is still a “priority”: That was the key messaging coming from the government following a meeting between Prime Minister Moustafa Madbouly and the heads of the EGX and Financial Regulatory Authority on Thursday to discuss the government’s plans to divest stakes in companies it owns. In an interview with Bloomberg Asharq on Thursday, Finance Minister Mohamed Maait said that the government would announce more details about its privatization plans this week but offered no further details.

The privatization programme has been hit by yet more delays this year due to the market turbulence at home and abroad, which has caused state-owned Banque du Caire and privately held Aman to postpone their plans to debut on the EGX. The privatization program also includes plans to divest assets through direct sales to strategic partners, while other companies (such as military-owned filling station chain Wataniya and bottled water maker Safi) could see stakes sold to strategics ahead of offerings of equity on the EGX.

Clarity on plans to sell state assets will likely be important to the IMF: With talks now in the crunch phase after Sri Lanka and Pakistan lined up facilities last week, Fund officials will likely want to see clarity on privatization as one of the conditions to granting another loan to Egypt. Since launching back in 2018, the current iteration of the state’s stake sale program has seen only the IPO of payments giant e-Finance and the sale of secondary stakes in Eastern Company and Abu Qir Fertilizers.


WATCH THIS SPACE #2- Some of Egypt’s biggest climate projects could be in line for financing from the US, the EU + international lenders: Climate projects in Egypt’s energy, food and water sectors — some of which were recently shortlisted during climate finance roundtables — will receive backing from the US, the European UNion and other international lenders, according to an Environment Ministry statement. The projects were shortlisted as part of our Nexus of Water, Food and Energy (NWFE) program, which aims to connect national projects with climate financing. International Cooperation Minister Rania Al Mashat and Electricity Minister Mohamed Shaker discussed in a meeting yesterday energy projects listed under NWFE, according to a statement by the ministry.

The climate finance agreements with our American and European friends will be announced during COP27 in November, Environment Minister Yasmine Fouad said on Thursday during a sit-down with US climate envoy John Kerry on the sidelines of the G20’s climate-focused meeting in Indonesia. The European Bank of Reconstruction and Development (EBRD) and other unnamed donors could pitch in to a USD 10 bn project to replace 17 fossil-fuel fired power plants with solar and wind power, Fouad said. We’ll have to wait until COP for the full details.


WATCH THIS SPACE #3- Green hydrogen regs are coming: The Egyptian Electric Utility and Consumer Protection Regulatory Agency (Egyptera) plans to announce a regulatory framework governing investments in green hydrogen projects next month, Al Borsa reported yesterday, citing unnamed sources. Officials have held talks with an unnamed foreign advisory firm to help draft regs and model contracts that would be signed with prospective investors.

REMEMBER- Dozens of firms have pledged USD bns of investment for green hydrogen and green fuel projects here. The latest round of MoUs came last week when seven regional and European firms signed up to explore building facilities with a combined annual capacity of more than 5.5 mn tons.

The big question: How many of these MoUs get turned into contracts. Egypt is positioning itself as the region’s premier energy hub, and Europe is more energy-hungry than ever. But with the United States about to offer producer subsidies and rising interest rates set to drive up investment costs…

** CORRECTION- We incorrectly reported last week that the Financial Regulatory Authority was holding consultations to introduce a carbon offset tax. The statement released by the regulator actually refers to the long-standing plans to set up a local carbon market, allowing companies to buy and sell carbon credits. We have since corrected the story on our website.

HAPPENING TODAY-

Some companies are about to get a three-year real holiday from real estate taxes: Small and micro-sized businesses as well as companies in some 19 strategic industries involved in national projects will pay zero real estate taxes for the next three years, after cabinet ratified the measure, according to the Official Gazette last week. The tax break is retroactive to the start of this year. The measure was first announced as part of the EGP 130 bn economic support package unveiled by the Madbouly government in the spring and is expected to cost the government some EGP 3.75 bn.

HAPPENING TOMORROW-

PMI data: S&P Global will publish August’s data measuring activity in Egypt’s non-oil private sector. The contraction in the private sector continued apace in July as high inflation weighed on output and demand.

The board overseeing the National Dialogue will hold its next meeting, choosing rapporteurs for all of the committees and subcommittees of the social, political and economic tracks. It will also work on topics of discussion for the dialogue.

Palestinian President Mahmoud Abbas will be in Cairo ahead of an Egyptian-Palestinian summit on Tuesday, the country’s foreign ministry said in a statement. The two sides will discuss the situation in Palestine and the possibility of releasing Palestinian prisoners in Israeli custody. Egypt played a key role in brokering last month’s ceasefire following clashes between Israel and Gaza militants.

OPEC+ meets to set output policy amid a wave of uncertainty in the markets that has resulted in the longest streak of monthly drops in crude prices since the pandemic, Bloomberg reports. Most analysts and traders surveyed by the business newswire expect the oil cartel to keep output steady. Brent crude futures are currently trading at around USD 93 a barrel — down nearly a quarter on their June peak.

THE BIG STORY ABROAD-

Energy war between Russia and Western countries escalates: Russia’s state-owned firm Gazprom has indefinitely suspended gas flows through the key Nord Stream 1 pipeline to Europe, hours after G7 nations said they would proceed with plans to impose a price cap on Russian oil exports. The pipeline was under maintenance for a “technical failure” and was set to become operational yesterday before Gazprom said it would not turn the taps back on because of an oil leak. The energy crisis in Europe has been hitting headlines since Gazprom cut capacity on Nord Stream 1 to just 20% of its normal capacity, triggering an unprecedented surge in gas prices on the continent. The story is everywhere — on both sides of the pond and in both the business and the mainstream press: Reuters | FT | DW | BBC | CNN | AP.

Also getting attention:

  • Farewell, Gorby: Thousands of Russians said farewell to the last Soviet president, Mikhail Gorbachev, whose funeral was held in Moscow yesterday following his death last week at the age of 91. Unsurprisingly, the event is being framed in the global media by the current war in Ukraine, with much of the Western press disapprovingly noting that President Vladimir Putin didn’t show up to the funeral. (Reuters | AP | NYT)
  • Houston, we had another problem: NASA was forced to call off the launch of its Artemis I rocket for a second time in a week due to technical issues. (Reuters | AP | CNN | Bloomberg | WSJ)

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THE ROAD TO COP27-

US climate envoy John Kerry will be in town later this week for the Egypt-International Cooperation Forum (Egypt-ICF), which runs 7-9 September at Almasa Convention Center in the new administrative capital. The three-day event will bring together global policymakers, ministers, development partners and other participants ahead of COP27 to discuss climate action and green transition, food security, and others with a focus on Africa. Check the full agenda here (pdf).

Kerry will “continue ongoing discussions with government and private sector counterparts on accelerating global climate cooperation ahead of the COP27,” according to a statement from the State Department. He will then head to Glasgow to “engage business and NGO leaders on efforts to enhance global climate action and accelerate the clean energy transition.”

Watch this- As the clock ticks down towards the all-important COP27 climate conference, Narrative PR is hosting a series of web talks with the organizers, leaders and policymakers shaping the agenda in Sharm El Sheikh this November. In its latest talk (watch, runtime: 9:28), Econsult CEO and UNFCCC climate champion Sarah El Battouty and International Fine Arts Foundation for Development head Randa Fouad talk about the intersection between art and sustainability.

We’ve already heard from Environment Minister Yasmine Fouad on the themes and the physical setup of the summit and how COP27 gives Egypt a chance to move forward on partnerships in critical industries. UN climate envoy and IMF executive director Mahmoud Mohieldin also spoke about climate financing and Egypt’s massive renewable energy potential.

CIRCLE YOUR CALENDAR-

The German-Arab Chamber of Industry and Commerce will commemorate 70 years of German-Egyptian business and economic ties with a gala celebration on 15 September.

Our monthly list of data points to keep your eye on over the next few days and weeks:

  • Foreign reserves figures for August should be out during the first week of the month.
  • Inflation figures: Inflation data for August from Capmas will land on Saturday, 10 September. Expect the Central Bank of Egypt to follow up on Sunday, 11 September with its inflation report.
  • Interest rates: The Central Bank of Egypt’s Monetary Policy Committee meets on Thursday, 22 September to review interest rates.

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

** What’s Next, our weekly deep dive into the trends and companies that are shaping the future of the business community, is on hiatus this week. Look for it to return next Sunday.

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ECONOMY

A measure of relief coming for importers?

CBE, Trade Ministry mull fresh relief for importers: The Central Bank of Egypt and Trade and Industry Ministry could allow importers who are not able to retrieve a Form 4 customs document to pay six-month open letters of guarantee in exchange for the immediate release of their shipments, two unnamed governmental sources told Bloomberg Asharq. The people said that the two sides are currently discussing the move, which would be the latest in a series of measures designed to ease pressure on importers brought on by the central bank’s import restrictions introduced earlier this year to keep foreign currency in the country.

Form 4? Form 4 is an important customs document importers submit to banks to release their goods. The paper represents a pledge to pay, allowing the bank to provide either a letter of credit (L/C) or to finalize the process of documentary collection.

What this would mean for importers: Should the central bank and the Trade Ministry reach an agreement, goods still stuck in Egypt’s ports will be released with banks required to provide FX to pay for the shipments within six months, the business newswire said. Clearing the ports will likely take between two and three months, Alaa Ezz, secretary-general of Federation of Egyptian Chambers of Commerce (FEDCOC), told Kelma Akhira’s Lamees El Hadidi last night (watch, runtime: 6:52). The question then becomes: Where will the FX come from as ports are emptied?

The government announced a series of emergency measures last week designed to clear thousands of shipments that have been stuck at ports due to the restrictions, including speeding up customs clearance and waiving certain fines. This came amid speculation in the business community that the policymakers could move to make it easier for companies to access L/Cs and reintroduce documentary collection for some categories of imports.

ENERGY

Egypt + Greece plot 9.5 GW renewables project. Plus: Private sector solar tender coming?

Egypt and Greece are working on a plan to add 9.5 GW of renewable power generation capacity in Egypt for export to Greece, according to an Ittihadiya statement Thursday. The electricity would be generated by wind and solar plants and would be shipped across the Mediterranean via subsea cables, the statement said.

There’s a lot we don’t know: The statement was light on details, including who’s participating in the wind and solar plants, the cost of the project, and where the money will come from. That suggests the two sides have reached a political agreement that is now being fleshed out by technical and commercial experts on each side. Possibly the biggest unanswered question is where the energy will go: The 3 GW Greece-Egypt Interconnector (GREGY) and the 2 GW EuroAfrica Interconnector will not have the transmission capacity to handle 9.5 GW, raising the prospect that additional infrastructure will need to be built.

Both sides want this asap: This came during a meeting between President Abdel Fattah El Sisi and the CEO of Greek infrastructure investor Copelouzos Group last week, during which the president called on the two sides to accelerate work on the project. Copelouzos CEO Dimitris Copelouzos said he was looking into implementing the projects in Egypt amid “ongoing challenges faced by Europe in the energy field.”

Copelouzos is a key player in the GREGY project: Work on GREGY has accelerated in recent months as the EU steps up its search for new energy supplies following Russia’s invasion of Ukraine. Renewable energy player Elica — a 50/50 joint venture between Copelouzos and Samaras Group — is applying to the EU for funding, with the European Investment Bank and a number of Greek banks possibly contributing money to the EUR 3.5 bn project.

We’ve been energy BFFs with Greece for a while: Egypt is looking into forging closer energy and electricity relations with Greece and other neighboring countries in the region, including a potential gas pipeline and the USD 4 bn EuroAfrica project to connect our grid with Greece and Cyprus later this decade.

PRIVATE SECTOR COULD BE OFFERED 300 MW OF SOLAR PROJECTS-

The Electricity Ministry plans to tender six solar projects in Aswan Governorate to local and international private sector firms in 4Q 2022, Al Mal reports, citing unidentified sources.

The details: The New and Renewable Energy Authority (NREA) is reportedly offering six plots of land to private sector partners under 25-year build, own, operate (BOO) contracts, according to the newspaper. The total investment costs are estimated at upwards of EGP 5 bn and the plants are set to produce a combined 300 MW of energy each year.

What we don’t know: Whether this means the government is looking to expand the 1.65 GW Benban park in Aswan, which was completed in 2019, to help it meet ambitious new renewables targets. The Benban park has made us a regional leader on solar, generating 1.9 GW of electricity annually — but we currently only have around 900 MW of fresh capacity currently set to come online by the end of the decade. That could soon change, as the electricity and environment ministries seek USD 10 bn in investments to decommission 17 “inefficient” fossil-fuel power plants and replace them with solar and wind power ahead of COP27 in November. The government is looking to have renewable energy account for 42% of our energy mix by 2030.

ECONOMY

The return of foreign money rests on outcome of IMF talks, devaluation plans, Bloomberg says

Still more from Bloomberg on our FX challenges: Protracted negotiations with the IMF over a new loan and risk of further devaluation are putting more pressure on the local debt market, Bloomberg writes — it’s the latest in a long string of stories from the business information service (and on its satellite channel) on the our current FX situation. Sales of EGP-denominated bonds are down y-o-y in 8M 2022 and local debt is among the six worst performers globally this quarter, Bloomberg says.

The pressure on local debt “likely accelerates [Egypt’s] need to agree a new funding program with the IMF,” Bloomberg quotes Paul Greer as saying. Gree is a London-based money manager at Fidelity International who is underweight on the EGP and EGP-denominated debt. Talks with the IMF have stretched for more than five months but are currently in the “final stages,” Prime Minister Moustafa Madbouly said recently. BNP Paribas is forecasting that negotiations could conclude by September or October.

Short-term deval pain for long-term portfolio gains: Further devaluation will push inflation higher, the business newswire says, but could be the only way to bring back investors in the long run. “Another 20% devaluation combined with a further 300-to-400-basis-point rate hikes and clarity on the policy outlook would get me interested in the local trade again,” said Gordon G. Bowers, a London-based analyst at Columbia Threadneedle Investments. Egypt’s real interest rate — once the highest in the world — has fallen to -2.35% on the back of years-high inflation, at a time when major economies are leading a global monetary tightening cycle that has pushed rates higher elsewhere.

The deval speculation continues: Since Hassan Abdalla was appointed governor of the central bank following Tarek Amer’s surprise resignation, speculation has been rife that the CBE will allow the local currency to depreciate gradually over the coming weeks and months, rather than going for a 2016-style shock devaluation. Whether it comes fast or slow, most market watchers are forecasting a double-digit depreciation by the end of the year, with BNP Paribas forecasting the currency to settle at EGP 23-24 to the USD. The currency is currently trading at EGP 19.26 to the greenback, having slipped more than 20% since the devaluation in March.

Dates to watch: Inflation data for August will be out at the start of next week. The figures will inform the central bank when it meets on 22 September to decide whether to raise interest rates once again, having already hiked rates by 300 bps since March in an attempt to check price hikes.

REMEMBER- Government officials have made it clear that Egypt plans to cut its reliance on hot money in favor of foreign direct investment (FDI) and export growth. Gulf states have pledged more than USD 22 bn in fresh investment and central bank deposits in a bid to support our economy through the global rough patch, and the government is pushing ahead with plans to attract USD 40 bn in private investment by selling off state-owned assets over the next four years. We’re also rationing electricity in a bid to collect more hard currency through natural gas exports.

COMMODITIES

Another Russian wheat shipment secured

State grain buyer GASC has secured 120k tons of Russian wheat directly from suppliers for delivery in November at USD 340 per ton, traders told Agricensus. The buy marks GASC’s second direct purchase from Russia in as many weeks, as the state appears to pivot away from public tenders after war in Ukraine stirred up volatility in the global wheat markets.

Have tenders been put out to pasture? The authority has so far secured 2.85 mn tons of wheat on the international markets for the current fiscal year — with some 55% purchased through direct tenders, according to Agricensus data. GASC had historically procured its wheat through international tenders, but cabinet in May gave the authority the go-ahead to purchase wheat directly as it looked to diversify supply amid a tight market. We’ve gone three months now without a successful tender, after the last tender in mid-July was canceled due to higher-than-expected prices.

Private purchases offer upsides: In volatile times for the global wheat markets, private purchases offer “better prices and conditions compared to when there are global tenders,” Supply Minister Ali El Moselhy told Reuters at a press conference last week. Direct purchases mean the government can be lighter on its feet, buying in smaller quantities when the price is right and without disclosing what it paid, traders and consultants told the newswire. “Any time prices are falling suppliers can offer that lower price to GASC, without having to wait for the tender day,” one trader was cited as saying.

The grain markets are cooling: This latest purchase was some 7.6% cheaper per ton than our most recent direct purchase toward the end of August, when GASC bought 240k tons of Russian wheat — and 23% cheaper than our canceled July tender. After spiking as high as USD 429 per ton in May on the back of the war in Ukraine, Paris wheat futures for December are now trading at USD 318 a ton. The drop is in part thanks to a UN-negotiated amnesty for grain cargoes amid Moscow’s blockade of Ukrainian ports.

On the domestic front: The government procured around 4.2 mn tons of wheat from local farmers during this year’s harvest, which wrapped up in August, missing the ambitious 6 mn-ton target set after spiking food prices forced the state to increase its reliance on local production.

RICE PRODUCTION TO FALL THIS YEAR-

Local rice production is expected to fall to 4.5 mn tons this season from 4.8 mn tons last year amid planting restrictions aimed at conserving water, according to Bloomberg Asharq.

MANUFACTURING

Holy smokes

Shifting producer dynamics are shaking up the normally staid cigarette industry on this early September morning.

Eastern Company reportedly plans to raise prices of key brands by as much as EGP 1.50-2.00 per pack today, according to Bloomberg Asharq. The maker of Cleopatra and other popular brands last hiked prices barely six months ago, when it moved to charge EGP 0.50 to EGP 1.00 more per pack at the koushk.

Blame rising raw material prices and the FX situation, Eastern chief Hany Aman told the news service. The company has been hit with supply chain snags and rising production costs.

Retailers had expected Eastern to go for even larger price hikes, and Ibrahim Embaby, the head of the Federation of Egyptian Industries’ cigarettes division, said he believes the price of foreign tobacco brands will rise in the coming months.

MEANWHILE- Eastern appears set to wind down production of Philip Morris brands Marlboro, Merit and L&M, according to a report in Al Mal. The newspaper reports that United Tobacco Company, a unit of Philip Morris, will begin making the international brands after Eastern finishes its current stock of raw materials.

Background: United was the only bidder last year for the nation’s second license to make tobacco products. Eastern said in May of this year that it was acquiring a 24% stake in United as provided for under the terms of the tender for the license, which effectively ended EGX-listed Eastern’s absolute monopoly on the manufacturing of cigarettes. Eastern will have two seats on United’s board. Aman told El Hekaya last night (El Hekaya | watch, runtime: 6:11) that no “sovereign entity” owns a stake in United.

STARTUP WATCH

Edtech Emonovo raises undisclosed bridge round + Shezlong, SubsBase plan expansion

We’ve got a bunch of startup news for you this morning: Local edtech firm Emonovo has raised a fresh bridge round, and two Egyptian startups — mental health startup Shezlong and subscription management platform SubsBase — are heading to South Africa.

First up: Edtech Emonovo has raised a bridge round led by a number of regional and international angel investors and Flat6Labs, the company announced in a statement on Friday. The company did not disclose the size of the round.

About Emonovo: Known as Marj3 until a rebrand earlier this year, the startup helps match MENA students with universities worldwide. “The company currently works on helping students with the entire application process, starting from finding the right university…[to] accommodation, flights and pre-arrival preparations,” co-founder and CEO Sami Al Ahmad (LinkedIn) told Enterprise. Founded in 2016 by Al Ahmad, Abdo Samy (LinkedIn), and Ahmed Elgebaly (LinkedIn), Emonovo has now secured three rounds of funding, including a six-figure USD seed round led by US-based VC firm Expert Dojo and a pre-seed round from Flat6Labs.

The company will use the funds to develop its tech, onboard more universities and students to its matching service, and boost its recent rebrand and operations, the company said. “We [also] want to introduce an easy apply option, where students can use a single application to apply to all their desired universities,” Al Ahmad said.

SHEZLONG SETS UP SHOP IN SOUTH AFRICA-

Egyptian mental health startup Shezlong has launched its new platform Upright in South Africa as part of its international expansion plan, according to a press release (pdf). Upright will act as an extension of Shezlong to offer mental healthcare services, including e-mental healthcare, to help those underserved by South Africa's healthcare system.

Why South Africa? Because of the size of its market as well as the similarities between Egyptian and South African culture, Shezlong CEO Mohamed Alaa told us. An added bonus is that South Africa has the same time zone as us, which will help the startup manage its operations in the country, he said.

Plans in South Africa and beyond: The startup hopes to see Upright hit at least 50k sessions by the end of 2023, Alaa said. “Our vision is to become the leading online mental healthcare provider in Africa,” he said. “We are currently working on expanding to two other African countries by 1Q 2023 at the latest,” he added. The company is also working to expand into the GCC, he said, without disclosing further details.

More money on the horizon: The company is working on a series A round that could be in the seven-figure USD range, Alaa said. The startup has raised USD 1 mn in investments so far, along with an undisclosed bridge round in late 2021, he added. Investors who have provided Shezlong with financing include Asia Africa Investment Consulting, angel fund HIMangel, and investor Mohamed El Khamissy.

SUBSBASE LOOKS TO SOUTH AFRICA & BEYOND-

Egyptian subscription management platform SubsBase plans to expand into Nigeria and South Africa in the last quarter of the year, co-founder Sherif Aziz reportedly told Al Mal. The company also plans to expand into Saudi Arabia in early 2023, marking the second market in the Gulf for the platform which also operates in the UAE.

New funding round coming: SubsBase is in talks with an unnamed venture capital fund to close a new funding round in mid-2023, Aziz said. SubsBase raised last month USD 2.4 mn in a seed round led by Global Ventures, with the funding directed towards product innovation and development, recruiting talent and increasing the company’s regional presence.

** Aziz was recently featured in Founder of the Week in EnterprisePM: You can read the interview here.

CAPITAL MARKETS

EFG Hermes dominates the brokerage league table, again

EFG Hermes once again topped the EGX’s brokerage league table in August, with a market share of 28.2%, according to figures from the EGX (pdf). Rounding out the top five were Al Ahly Pharos (19.7%), CI Capital (6.6%), Beltone (2.9%), and Mubasher (2.5%). EFG has held the top spot every month bar one so far this year.

MOVES

CI Capital appoints head of corporate access and research distribution

Amr Amin (LinkedIn) has been appointed head of corporate access and research distribution at CI Capital, according to a LinkedIn post. Amin will work with CI Capital’s research team to “facilitate even greater investor access and exposure to corporates and vice versa.” Amin, who has over 10 years of sell-side equity research experience and over five years of experience in corporate communications, joins the firm after heading communications and investor relations at Elevate Capital. He also held posts at Beltone Financial and HC Securities and Investment.

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LAST NIGHT’S TALK SHOWS

Lamees El Hadidi and Amr Adib returned to our screens yesterday to serve up a night dominated by the economy.

The IMF’s loan conditions got a mention on Kelma Akhira, where Lamees El Hadidi was singing from the same hymn sheet as Finance Minister Mohamed Maait, telling the viewers that the IMF was not demanding bread subsidy reform or cutbacks to social security (watch, runtime: 3:54). She said the IMF wants to see low-interest loan initiatives handled by the Finance Ministry instead of the central bank and the state handling debt better to alleviate burden on the budget. The queen of late night talk also highlighted the IMF’s message in July on the necessity of a more flexible exchange rate, reducing the state’s involvement in the economy and boosting private sector development.

Nothing to see here, folks: Meanwhile, Ahmed Moussa and economist Medhat Nafea on Ala Mas’ouleety (watch, runtime: 6:32) and economic researcher Mohamed Shadi on Masaa DMC (watch, runtime: 3:51) tried their best to convince the country that everything is fine and well with the economy, emphasizing GDP growth and the stable unemployment rate. Meanwhile, Alaa Ezz, secretary-general of Federation of Egyptian Chambers of Commerce (FEDCOC), told El Hadidi that falling international commodity prices will begin to feed through to the Egyptian economy in the next two or three months (watch, runtime: 14:38).

New social protections: The expanded social safety net that was introduced 1 September to protect vulnerable people against price shocks got a mention on El Hekaya (watch, runtime: 2:48) and Kelma Akhira (watch, runtime: 1:52).

EGYPT IN THE NEWS

News on US investigators seizing a dozen looted artifacts worth over USD 13 mn from the New York Metropolitan Museum of Art leads the conversation in the international press this morning, with coverage from the New York Times, CNN and The Independent. The 27 artifacts, which also include 21 from Italy and six from Egypt, will be repatriated to their countries of origin in official ceremonies next week, according to the Manhattan district attorney’s office.

PLANET FINANCE

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Another bad week for US stocks: Wall Street suffered its third consecutive weekly loss as concerns about rising interest rates continued to spook investors. The S&P 500 declined 1.1% on Friday, taking its weekly loss to 3.3%, while the Nasdaq also fell 3.3% after losing 1.4% during the final session of the week. US stocks have been on their worst run of form since mid-June in recent days after Federal Reserve officials indicated they would not soften their stance on rising interest rates until inflation has fallen back significantly. The Financial Times and Bloomberg have more.

Aramco’s VC arm to ramp up investing this year: As part of the push to diversify the Saudi economy, Aramco's venture capital arm Wa’ed is looking to invest around USD 100 mn this year, CEO Fahad Alidi told Bloomberg, after investing about USD 50 mn across the previous nine years. Some 11 investments are already in the pipeline for the VC’s USD 200 mn fund in 2H 2022, he added. The company will reportedly diversify beyond fintech and e-commerce to fields like deeptech, space tech, the metaverse, and sustainability. In its first international venture, Wa’ed has made a USD 13 mn series A investment in Luxembourg-based satellite operator OQ Technology.

Russia’s big problem: How to slow a surging RUB. Moscow is mulling buying as much as USD 70 bn-worth of CNY and other “friendly” currencies this year as part of a plan to slow the surge of the RUB on the back of an influx of earnings from sales of oil and gas, Bloomberg reports, citing government documents it has seen. The rallying currency is undermining the competitiveness of Moscow’s exports and widening its trade deficit, leading officials to discuss snapping up CNY now before selling the holdings to fund investment in the long term, the business newswire says. Half of the Kremlin's USD 640 bn FX reserves have been frozen due to sanctions.

Down

EGX30

9,937

-0.6% (YTD: -16.8%)

Down

USD (CBE)

Buy 19.18

Sell 19.26

None

USD at CIB

Buy 19.20

Sell 19.26

None

Interest rates CBE

11.25% deposit

12.25% lending

Down

Tadawul

12,143

-1.2% (YTD: +7.6%)

Up

ADX

9,755

+0.3% (YTD: +14.9%)

Down

DFM

3,394

-0.6% (YTD: +6.2%)

Down

S&P 500

3,924

-1.1% (YTD: -17.7%)

Up

FTSE 100

7,281

+1.9% (YTD: -1.4%)

Up

Euro Stoxx 50

3,544

+2.5% (YTD: -17.5%)

Up

Brent crude

USD 93.02

+0.7%

Down

Natural gas (Nymex)

USD 8.79

-5.1%

Up

Gold

USD 1,722.60

+0.8%

Down

BTC

USD 19,807

-0.9% (YTD: -57.1%)

THE CLOSING BELL-

The EGX30 fell 0.6% at Thursday’s close on turnover of EGP 1.04 bn (16.4% above the 90-day average). Foreign investors were net sellers. The index is down 16.8% YTD.

In the green: Eastern Company (+2.6%), e-Finance (+2.1%) and Sidi Kerir Petrochemicals (+1.2%).

In the red: Mopco (-5.2%), Palm Hills Development (-4.0%) and Cleopatra Hospitals (-3.2%).

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.

SEPTEMBER

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).

4 September (Sunday): Industrial Development Authority’s deadline for companies interested in providing various services in the industrial zones in Qena and Sohag to submit a written expression of interest.

5 September (Monday): The National Dialogue board of trustees holds a meeting to set the agenda for the dialogue and choose rapporteurs for the involved committees.

5 September (Monday): OPEC+ meets to decide on production levels for October.

5-8 September (Monday-Thursday): Gastech 2022, Milan, Italy.

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

7-9 September (Wednesday-Friday): Second edition of Egypt-ICF at Almasa Convention Center at the New Administrative Capital + African Finance Ministers meeting to coordinate an African-led position during COP27.

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

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

14 September (Wednesday): Expedition Investments’ MTO for Domty expires.

15 September (Thursday): Deadline for B Investments to respond to Adnoc’s bid for TotalEnergies Egypt.

15 September (Thursday): Deadline to apply for the fifth phase of the export subsidy program.

15 September (Thursday): Egypt and UN-led regional climate roundtable ahead of COP27, Beirut, Lebanon.

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

19-22 September (Monday-Thursday): EFG Hermes One on One Conference, Dubai.

20 September (Tuesday): Fifth Egypt and UN-led regional climate roundtable ahead of COP27, Geneva, Switzerland.

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

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

22 September (Thursday): Deadline to submit prequalification applications for companies interested in submitting a proposal for sea water desalination projects

25-27 September (Sunday-Tuesday) A delegation of executives at Egyptian real estate companies visit Saudi Arabia to present developers with potential investments in Egypt’s real estate sector.

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

27-29 September (Tuesday-Thursday): Africa Renewables Investment Summit (ARIS), Cape Town, South Africa.

28-29 September (Wednesday-Thursday): The sixth edition of Arab Pensions and Social Ins. Conference in Sharm El Sheikh.

OCTOBER

October: House of Representatives reconvenes after summer recess

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): Start of 2022-2023 school year.

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

4-8 October (Tuesday-Saturday): The Chemical and Fertilizers Export Council of the Trade and Industry Ministry is organizing a trade mission to Kenya.

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, Washington, DC.

15 October (Saturday): Cairo Metro will launch a global tender for maintenance work on the power stations and overhead catenary system of Line 1.

16-19 October (Sunday-Wednesday): Cairo Water Week 2022, Nile Ritz Carlton, Cairo.

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

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.

December: Egypt to expand Sudan electricity link capacity to 300 MW.

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.

1 January (Sunday): Residential electricity bills are set to rise as per the government’s six-year roadmap (pdf) to restructure electricity prices by 2025.

7 January (Saturday): Coptic Christmas.

24 January-6 February: The 54th Cairo International Book Fair, Egypt International Exhibition Center

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.

4Q 2022: Electricity Ministry to tender six solar projects in Aswan Governorate.

4Q2022: Raya Holding subsidiary Aman and Qalaa Holdings’ Taqa Arabia to launch their fintech company.

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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