Monday, 3 October 2022

AM — Saudi sovereign fund acquires a third of local electronics player BTECH



Good morning, wonderful people, and happy Monday. On an otherwise very quiet day on the domestic front, Saudi’s sovereign wealth fund steals the show with another major acquisition here in Egypt.

THE RUNDOWN- KSA’s Public Investment Fund (PIF) has acquired 34% of consumer electronics and household appliances retailer BTECH from impact investor DPI in a transaction that proves you can generate earnings in Egypt as a foreign investor even when the FX rate moves against you. We have an exclusive interview with BTECH CEO Mahmoud Khattab in this morning’s Coffee With column, below.

How well did our friends at DPI do on the transaction? As you’ll read below, BTECH is a very different company today than it was when DPI invested back in 2016. It not only has the widest brick-and-mortar footprint in its segment, it’s now an e-commerce powerhouse (having built up from zero) and a fast-rising consumer finance player. Yes, we saw devaluation during DPI’s six-year holding period. The greenback was changing hands at EGP 8.80 in the official market on the July 2016 day that DPI announced its investment. Today’s FX rate: 19.59. But in the same period, BTECH’s net income is up 10x and revenues have grown 5x. That means DPI has generated superior returns in USD terms, regardless of whether you’re valuing it based on a multiple of revenue, EBITDA or net income.

WATCH THIS SPACE- Are we lining up investment from Kuwait? President Abdel Fattah El Sisi received a delegation of Kuwaiti investors headed by the president of the Kuwaiti chamber of commerce yesterday, Ittihadiya said in a statement. The investors were reportedly interested in renewable energy, tourism, real estate, industry, and healthcare, the statement read. El Sisi made a televised appearance to welcome the delegation (watch, runtime: 3:35). There’s been speculation in recent months that Kuwait could send inflows our way, following in the footsteps of its Gulf neighbors who have pledged some USD 22 bn in investment to help shore up our economy amid global headwinds.

PSA- It’s official: We’re heading into a long weekend. Both the public and private sector will take this Thursday, 6 October, off in observance of Armed Forces Day, the cabinet said yesterday in a statement. And for those who usually work Saturdays, this coming Saturday, 8 October, is also an official holiday to mark the Prophet Muhammad’s birthday.

FROM THE HOUSE- House Economic Committee gets new head: Accountant and businessman Mohamed Soliman will replace Ahmed Samir as chair of the House Economic Committee for the new legislative cycle, House Speaker Hanafi Gebali announced yesterday. Samir stepped down after he was appointed trade and industry minister in August. Soliman is a prominent figure in the pro-government Mostaqbal Watan party, which controls 316 of the 596 seats in the House. This comes one day after MPs returned from summer recess to kick off a new legislative season.

Need to get up to speed on the House? We have a rundown on the most business-relevant bills before lawmakers this season.

The heads of other business-relevant committees will remain unchanged: We have the who’s who of parliamentary committee heads.

The House meets for its next session on Sunday, 16 October.

Gov’t, CBE send further signals they’re working together on imports + the FX logjam: President Abdel Fattah El Sisi yesterday met with Prime Minister Moustafa Madbouly and Central Bank of Egypt (CBE) Governor Hassan Abdalla, according to an Ittihadiya statement, in the latest sign of significant (but not untoward) policy coordination between the executive branch, government and the central bank to help the country squeeze through the current economic bottleneck. El Sisi asked the central bank to work on new initiatives to attract foreign investments to Egypt. The president also asked the CBE to follow up on imports, a week after saying he expects the government to solve import challenges facing manufacturers within two months.


Eight Austrian water companies are here to talk investment: Headed by Austria’s ambassador to Egypt and the VP of the Austrian Chamber of Commerce, a delegation will meet with government officials and local business leaders on 3-5 October to discuss investment in Egypt’s water, wastewater and desalination projects, the Austrian embassy in Cairo said (pdf) over the weekend.


The IMF will release its latest economic outlook on Wednesday, and the chances are it’s not going to be pretty as tightening financial conditions, an energy crisis in Europe and rising geopolitical tensions over Ukraine weigh on the global economy. The Fund and the World Bank will hold their annual meetings in Washington, DC, next week, from 10-16 October.


The global business press is leading this morning with plans by OPEC+ to cut oil output by more than 1 mn barrels per day. The cartel could announce the move to prop up falling oil prices at its meeting on Wednesday, Reuters reports, citing OPEC sources.

Oil near 2022 lows: Brent Crude climbed 2.5% overnight on the news to USD 81.47 / barrel, but was well above USD 100 / barrel from March through July of this year. Oil has sagged below USD 90 / barrel for the first time since the start of the war in Ukraine on fears of a global recession and a strengthening USD.

The news won’t be welcomed by the US, Canada or Europe who are all eager to bring oil prices down to curb soaring domestic inflation as they continue to try to hurt Russia’s oil exports. Gulf producers gave into demands by Western powers and ramped up production over the summer, but in a shock move OPEC+ indicated last month that it would begin to curb supply starting October.

Europe is bracing for a cold winter: The continent is likely to suffer a colder winter with less rain and wind than expected, stepping up energy demand and making it harder to generate power from renewable sources amid a sweeping shortage of hydrocarbons, the Financial Times reports, citing the European weather forecasting agency.

A SURPRISE DISPATCH FROM THE DEPT. OF GOOD NEWS- VC firm 83North said yesterday it has reached a USD 400 mn close for its latest fund, a raise which comes as limited partners around the world pull back from the asset class amid economic uncertainty and a sell–off in public tech stocks. The Israeli-British firm has secured additional funding from existing partners, bringing its total capital under management to more than USD 2.2 bn, it said, adding it will deploy the money in companies across Europe, Israel and the US.


COUNTDOWN TO COP (35 days to go)-

The UK’s King Charles III will not be attending COP27 in Sharm El Sheikh in November, Buckingham Palace confirmed, according to the BBC. The palace had reached an agreement with the British government that Charles would not attend after seeking the “advice” of PM Liz Truss, palace officials said, responding to reports that Truss had “ordered” the king — who has long campaigned for environmental causes — not to attend. Reuters and Bloomberg also had coverage. There’s speculation in some corners of the UK press corps is that Buckingham Palace leaked the news to lash back at Truss.

Our friend Hussein Abaza, CIB’s CEO and managing director, has joined the advisory board of the Glasgow Financial Alliance for Net Zero (GFANZ), which aims to decarbonize the assets of financial institutions. (Statement)

Meet COP’s younger sibling, COY17: Sharm El Sheikh will host the 17th UN Climate Change Conference of Youth (COY17) just before COP27, from 2-4 November. Youts can apply here through 10 October to attend.

The two-day Arab Climate Forum kicked off yesterday: The gathering, opened by Environment Minister Yasmine Fouadaims to bring Arab governments together to coordinate positions and present a united front on climate change ahead of COP27, according to a statement.


UPCOMING NEWS TRIGGERS- Here are some data points and news triggers to be on the lookout for in this month:

  • PMI: We’ll know how Egypt’s private sector fared in September when S&P Global drops its latest PMI release tomorrow (Tuesday, 4 October). The downturn in activity looked to be easing in August when businesses told the survey that demand and output were rising on the back of slowing inflation.
  • Foreign reserves: The Central Bank of Egypt (CBE) should be out with September’s foreign reserves figures later this week. Reserves remained flat at around USD 33.1 bn in August, having fallen 20% since March due to headwinds caused by the war in Ukraine and tightening financial conditions.
  • Inflation to notch new highs? Analysts are expecting inflation to have continued rising in September due to the weakening EGP after reaching highs not seen since November 2018 in August. We’ll find out when Capmas and the CBE release the figures next week.

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


*** It’s Blackboard day: We have our weekly look at the business of education in Egypt, from pre-K through the highest reaches of higher ed.

In today’s issue: A fresh report from the World Bank says we need to invest more heavily in our public education system.

ICYMI- Missed this week’s Inside Industry? In our weekly vertical exploring all things industry and manufacturing, we looked at how import restrictions have led to a shift in consumer behavior as customers move to buy more local products for their availability and more affordable price points.


Somabay Golf Open Tournament 6-8 October: The Somabay Golf Open in Partnership with the Cascades Golf Resort Spa and Thalasso is just around the corner. This event has been a permanent fixture of the Egyptian Golf Calendar for over 20 years and is a great weekend of friendly competition that brings together players from across Egypt and the Region. The event features a practice round and two days of competition, a lavish welcome reception, and gala dinner. Room rates start from EGP 6,250 per person. For booking inquiries, contact +20 (0)100 340 0300 or


BTECH’s Mahmoud Khattab on how his journey with DPI and how he’ll grow the business now that Saudi’s PIF has bought in

EXCLUSIVE- Saudi Arabia’s sovereign wealth fund has acquired a 34% stake in consumer electronics and household appliances retailer BTECH from Africa-focused investment firm DPI for an undisclosed sum, according to a statement (pdf) out this morning. The Public Investment Fund (PIF)’s wholly owned Egypt arm, Saudi Egyptian Investment Company (SEIC), will appoint two members to BTECH’s board, insiders tell us. The tie-up with PIF will “accelerate [BTECH’s] innovative growth strategy, its digitization efforts, while scaling new business verticals and existing core operations,” the statement reads.

ESSENTIAL BACKGROUND- African Development Partners II, a fund advised by impact investor DPI, acquired the stake in BTECH back in July 2016 in a transaction said at the time to be worth about USD 35 mn. The remaining 66% of BTECH was (and remains) owned by BT Holding, a vehicle owned by the founding Khattab family.

ADVISORS- Arqaam Capital was sell-side M&A advisor, with White & Case providing international counsel to DPI alongside local counsel Matouk Bassiouny & Hennawy and Zulficar and Partners. Our friends at EFG Hermes were buy-side M&A advisors, with Adsero-Ragy Soliman and Partners acting as local legal counsel and Akin Gump doing international legal duties for PIF. PWC were sell-side financial advisors.

So not a great investment, right? After all: Is there an industry on this planet worse than selling consumer electronics and household goods in physical stores? RadioShack, Future Shop, CompUSA and Computer Land (to say nothing of countless local mom ‘n pop shops) brought the pages of Byte magazine to life for a generation of nerds-in-training. Egyptians planned stopovers in Heathrow to snap up the BlackBerry Bold 9900 from Dixons. As dinosaurs once ruled the earth, so these brands dominated consumer electronics retail around the world. And now, like the dinosaurs, they are no more — closed, liquidated, rolled into onetime competitors, or limping along as shadows of their former selves thanks to ecommerce. What more can you expect from an industry notorious for its low-single-digit net margins?

But two consumer electronics retailers are thriving: Apple, with its ubiquitous stores … and BTECH.

“Wait, Enterprise, BTECH?” you ask. Yes — this is a smart play by PIF. The home-grown chain is on track to deliver revenues of c. EGP 11 bn in 2022 — up 30% from last year. During DPI’s six-year holding period, BTech grew its top line 5x and its bottom line 10x. It had just under 70 stores when the DPI investment closed in the summer of 2016 — it has 143 today and will open 10 more stores before the end of this year. And from a base of zero when DPI entered the company, some 20% of BTECH’s sales are now online.

DPI’s exit carries one big message for foreign investors: You can make a killing here in Egypt if you pick the right target — devaluation be damned.

We sat down over the weekend with BTECH CEO Mahmoud Khattab to talk about how far BTECH has come — and how very much further it has to go before he can sleep. Edited excerpts from our talk are below.


  • Revenues grew 5x and the bottom line 10x during DPI’s holding period — and the company will grow its top line 30% this year. E-commerce now accounts for for 20% of its top line;
  • BTECH has no plans to expand outside Egypt just yet — it sees too much potential here;
  • Launching its MiniCash BNPL service as a standalone brand is “under discussion”;
  • A project with McKinsey (one of the consultant’s largest in Egypt) is laying the foundation for a complete re-think of its digital operations;
  • Khattab thinks retail doesn’t get enough respect as a creator of meaningful employment.

ENTERPRISE: Your press release on the transaction talks about how working with the PIF is going to help you accelerate your growth. What do they bring to the table?

MAHMOUD KHATTAB: It’s simple: We believe in teaming up with best partners — on everything. Whether that’s your employees, the independent directors on your board, or your shareholders. That’s why we’re working with McKinsey on a three-year engagement that is, I believe, the biggest project they have in the country and their biggest in the region on household appliances and electronics.

DPI were great partners who brought a lot of added value to the table. It’s great to have someone sitting by your side, helping you reach places you can’t go on your own. When it was time for DPI to exit, we had multiple offers from potential acquirers. But in going with PIF, it’s not about a capital injection or a partner with deep pockets. It’s about someone who can help us be more aggressive — it’s about more than the retail expansion. It’s about fintech. It’s about logistics. It’s about best practices around the world. It’s about all of the stuff on the back end that we’re going to need to grow — that’s the PIF’s value add.

E: So does PIF coming on board signal that you’re looking to grow outside Egypt?

MK: No. We don’t see ourselves growing outside Egypt for the time being. We’ve been here for 25 years. We’re number one in our industry by market share, by number of stores, by years in business. By any measurement. But we feel we’ve not even scratched the surface, and until we’re good with that, we’ll stay focused on Egypt. Only then will we look outside the borders of a country with 104 mn people.

E: You say you’re aggressive, but BTECH has been fairly quiet about telling its corporate story. What do you mean by “aggressive”?

MK: In the six years DPI was our partner, we grew the top line 5x and the bottom line 10x. We more than doubled the number of stores we have in the market and now comprehensively cover every governorate except for North and South Sinai and Wadi El Gedid. We were at zero when it came to e-commerce. Now it accounts for 20% of our revenues and we have a 23% market share of online sales in our segment. We just launched a new B2B platform. And even as we grow the online business, we’re going to be opening a new store just about every 10 days through to the end of the year. And we’re not content: We’re innovating as we do this. It’s about adding to your revenue mix and using today’s margins to invest in the future.

E: It’s difficult in any industry to grow your bottom line twice as fast as your revenues. What’s behind that?

MK: There’s definitely the impact of scale — the larger we get, the more we’re spreading infrastructure and other central costs out over the business. Scale gives us the chance to buy on better terms, which falls to the bottom line. And we’re very careful to take a balanced approach — we invest in the future, but we don’t do it at the expense of losses today.

Working on costs and optimizing our expenses all the time is very important — we’re always trying to bring down expenses, to improve our bottom line. I don’t believe in buying market share, in losing and hoping to be profitable in the future. If you’re not profitable today, you’re not going to be profitable tomorrow. It’s a mindset.

E: What’s the B2B platform you just mentioned?

MK: The idea is to serve small retail shops and distributors. We launched on 1 September and already have 5k dealers on the platform. The idea is that we’re giving superior service to smaller retailers through an online platform. From their mobile or laptop, they can check our stock, place an order, compare prices, and get products delivered to their stores the next day. Dealers can pay online or find alternatives if a product is out of stock. We see big growth potential in B2B.

E: You said the business will grow 30% this year despite all of the challenges the market is facing with imports and the slowdown in economic growth. What’s driving growth?

MK: It’s simple: We have more stores than anyone else. We’re all over Egypt, we’re very strong online, and we offer our own MiniCash consumer finance product, which enables about 42% of our sales, making us the market leader on consumer finance for household appliances and electronics. That’s about double the nearest competitor. We’re going after the B2B market. We’re adding stores. And we’re being judicious with costs as we do that — like with the rollout of our BTECH X line of smaller stores that we can roll out faster in areas including malls and Chillout shops with a knocked-down product lineup and then delivery for larger items.

We don’t sit around when market conditions are challenging. We enjoy the downtime to grow our market share and double down on growth plans so we’re in a better place when things swing back to normal.

E: Do you have plans to roll out MiniCash as a standalone brand? To finance purchases made at other retailers?

MK: All I can say is that it’s under discussion, but for now, we’re a closed loop — as it stands today, we only finance our own products and services.

E: Your announcement talks about “progressing your digital transformation.” What does that mean?

MK: Over the next three to four years, we’re going to invest more than EGP 1 bn in digital transformation. It will touch every single corner of the company. Not just the customer experience, but all of the back office, everything. It is one of the most important areas in which we’re working with McKinsey. We’re already taking steps: This past Saturday (1 October) we announced a change to our internal structure and appointed an executive vice president for B.Labs and digital. We’re going to be developing our own technology from the core on out.

E: You’ve been heard saying before that retail, as an industry, doesn’t get enough respect.

MK: BTECH will have 6k staff at the end of the year. We will have hired 900 new team members this year. As retailers, we are creators of jobs.

Look, I’m biased on manufacturing vs retail, but it’s all “industry, industry, industry” in the press. Everyone runs after the manufacturers — even though more than 34% of the workforce in Egypt works in retail. Nobody talks about trade and distribution. We’re not laying people off — we’re hiring year-round.

I challenge any manufacturer in Egypt to create jobs and support new households the way retail does. We are in 24 governorates. In 33 cities. And we don’t just hire people — we invest in them. Our team members have, on average, each had three training courses this year at the BTECH Academy. We’ve created a diploma program in retail management in partnership with the government and we’re going to roll out university-level retail and retail management programs with a couple of universities.

E: If you could change one thing about your business, what would it be?

MK: We’re too slow. We could grow faster if we change the way we do business. We need to get a handle on the scope and pace of change happening all around the world. 5x revenue growth and 10x profit growth are great, but they’re just the beginning. I want to keep this beast hungry all of the time — we want to always, always have the spirit of a startup, even now, 25 years down the road.



Surviving the squeeze: Cashflow controls for challenging conditions

By Sherif Zaki

Controlling cash flow is an essential part of managing a successful business and one of the strongest indicators of your ability to grow and thrive.

With disrupted supply chains, global conflict, higher energy prices, growing inflation, and a global recession being predicted by some, decisive and disciplined cashflow management is also an indicator of survival.

Businesses across the region are being challenged by macro factors beyond their control — albeit not as severely as in many other parts of the world. For example, borrowing costs and repayments on variable rate loans are soaring, as medium- term financial plans, which were written during the era of ultra-low interest rates, now need to be reconsidered.

It’s at times like these that managing cash flow has never been so important. There are steps businesses can take to rationalize liquidity and remain solvent, even when supply chains become fractured and client payments stall.

A clear view of cashflow

Bringing in digital solutions to give real-time visibility to data on day-to-day transaction management or clear cash forecasting, for example, is increasingly being seen as cost-effective in the long run.

A 2018 survey found greater satisfaction with cash forecasting among those who use automated solutions compared to those who primarily use spreadsheets.

Managing your liquidity on the go is one of the ways to exercise control over banking operations — even while operating from different countries. And keeping a digital finger on the pulse of receivables, payments, and accounts balances in various geographies can empower better business decisions.

Real-time visibility of the liquidity position of a company can enable improvements in cash management, since businesses can put idle deposits to use by investing surplus liquidity.

Supply chain financing

Suppliers who have relationships with larger buyers can benefit from supply chain financing as it allows them to benefit from the credit standing of these large companies. Usually, bigger suppliers have greater bargaining power, giving them access to cheaper credit at preferable terms.

With supply chain financing, smaller suppliers can obtain credit at more favorable terms since banks will take into account their buyer’s profile and credit standing while providing the finance. Suppliers can get cheaper funding without leveraging banking lines while buyers benefit from cost efficiencies such as not having to issue letters of credit — a saving which passes through the supply chain. Buyers will also mitigate the risk of suppliers’ inability to perform due to lack of adequate working capital funding.

If the supplier and the buyer are on the same platform, the invoices from the supplier to the buyer can be linked directly, and updated information is easily available. This also reduces paperwork and allows for better inventory planning.

Case studies show a significant reduction in the accounts payable workload and better supplier relationships.

Letting go of the receivables delay

The speed at which a business can receive money from clients can be a crucial differentiator. Businesses today seek solutions that allow them to provide flexibility to their customers to pay how they want — digitally.

Receivables solutions from banks can manage both collection and payments on a business’s behalf. A purchase processing solution can address cashflow challenges by ensuring a business is paid by customers quickly rather than waiting, essentially leaving the bank to do the waiting and allowing the business more liquidity, more quickly to meet other costs.

Making payments seamless

Whether it is government taxes, payments to port authorities to clear shipments, salaries, vendor payments or utility payments, businesses are building efficiencies into their payment processes so that they can be handled seamlessly.

With digital solutions, payments can continue unhindered even when the authorized signatory is traveling and check signing is a challenge. A digitized payments process allows greater control and, using app-based solutions, businesses can make payments using their smartphones.

Commercial cards

We’re seeing commercial card use increase across the Middle East. They can be used for anything from vendor payments to customs clearing fees and offer a no-interest period.

Virtual card and account solutions are also increasing in popularity since they eliminate the need to issue cheques and purchase orders.

They also provide visibility of all transactions, with relevant details such as value, date, merchant, origin of transaction, as well as level three data such as invoice numbers.

Bringing it all together

The road ahead may be challenging for different businesses around the region, especially those with international customers, suppliers or partners. Taking greater control and being proactive is often the difference between thriving and surviving amid uncertainty.

Taking control will help businesses track and manage payments, forecast and analyze cashflow through and monitor trade transactions instantly. Getting a clear picture of a business’ real-time balances on desktop or mobile devices is what empowers business owners to manage their company’s finances more effectively and efficiently wherever they are.

Sherif Zaki (LinkedIn) is the head of global payment solutions at HSBC Egypt.



Tragedy strikes on the first day of the academic year: One schoolgirl died and 15 others were injured after a staircase collapsed at a secondary school in Kerdasa, Giza, according to an Education Ministry statement. Education Ministry Spokesman Shady Zalata hit the airwaves to discuss the incident, holding phone-ins with Kelma Akhira (watch, runtime: 7:48), El Hekaya (watch, runtime: 1:44), and Ala Mas’ouleety (watch, runtime: 11:02). Zalata said the cause of the accident is still unknown and authorities are investigating.

Is wheat stuck at ports due to a lack of FX? Some 700k tons of wheat worth around USD 250 mn is stuck at our ports due to a lack of the needed USD to get it released, Karim Abu Ghaly, a member of the Federation of Egyptian Industries’ cereals chamber, told El Hekaya (watch, runtime: 1:57 | 1:51). Essential commodities including wheat should be exempt from import restrictions that since March have caused a buildup of foreign goods at our ports, and which the central bank has only recently begun to ease.

A fresh batch of pre-trial detainees are set to receive a presidential pardon, Mohamed Abdel Aziz, a member of the presidential pardons committee, tells Al Hayah Al Youm (watch, runtime: 5:51).


The return of the Rosetta stone? Campaigners are confident they will be able to repatriate the Rosetta Stone from the UK following the launch of a formal petition led by Dr Zahi Hawass, according to CBS News. The Rosetta Stone has garnered attention over the past weeks, with Deutsche Welle giving it a feature on the 200th anniversary of its discovery.

The Biden administration is sending aid to the Pacific that had been earmarked for Egypt: The USD 130 mn in US military aid the Biden administration withheld on human rights grounds will be redeployed to pay for new climate initiatives for island nations in the Pacific, the Associated Press reports.


Thanaweya amma students may soon get a second chance at improving their grades: The Education Ministry is looking into ways to allow students to repeat the entire academic year if they’re not happy with their grades, Masrawy quoted Education Minister Reda Hegazy as saying. The ministry is proposing to amend the Education Act to allow high school students to repeat the entire school year if they want to improve their total grades to increase their chances of admission into the college of their choice. Students are currently not permitted to retake final exams unless they have failed.

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

  • Staff at inspection points for customs will work seven days a week for the coming two weeks to help fast-track import inspection and alleviate some of the economic disruption caused by import restrictions. (Al Mal)
  • Scrap metal export ban extended: The Trade and Industry Ministry has extended its ban on exports of salvaged and scrap metals for another six months to help manufacturers cope with price hikes and shortages of raw materials. (Al Mal)
  • Egyptians for Housing and Development has denied reports that it has received an offer from a Saudi firm for a 25% stake in the company, but said it is exploring a strategic partnership with an unnamed large Saudi development company for a potential venture with the New Urban Communities Authority (NUCA). (Statement, pdf)
  • The General Authority for Land and Dry Ports will receive technical proposals from companies interested in managing and operating the Damietta Dry Port this month. (Al Borsa)
  • Japanese subway operator Tokyo Metro has “expressed a strong interest” in managing and operating the Cairo Metro Line 4 in partnership with Mitsubishi. (Transport Ministry statement)


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Emerging-market bond funds have seen a record USD 70 bn of outflows so far this year, with investors pulling USD 4.2 bn in the past week alone, the Financial Times reports citing JPMorgan’s analysis of EPFR Global data. Emerging markets are up against a continuing surge in interest rates in developed markets and a stronger greenback, making investors pull away from funds holding both local and foreign currency bonds. JPMorgan raised its 2022 forecast for EM bond outflows from USD 55 bn to USD 80 bn, and while some analysts see promise in today’s deeply discounted valuations, one JPMorgan strategist tells FT that outflows are expected to continue for the rest of the year amid slowing global growth and trade.

Fertiglobe approves 1H 2022 dividends: Shareholders of MENA fertilizer firm Fertiglobe — a joint venture between Adnoc and the Sawiris-owned OCI — have agreed to pay out USD 750 mn (AED 2.75 bn) in dividends for the first half of 2022, the company said in a statement (pdf) following its general assembly meeting. Dividends of AED 0.33 per share will be distributed later this month to shareholders on record as of 10 October 2022.

US investors are eyeing UK and European assets as prices tumble: A strengthening USD is expected to prop up an ailing US M&A market as investors snap up cheaper assets in the UK and Europe, the Financial Times reports.

Down EGX30 9,687 -1.4% (YTD: -18.9%)
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The EGX30 fell 1.4% at yesterday’s close on turnover of EGP 724.08 mn (24% below the 90-day average). Local investors were net buyers. The index is down 18.9% YTD.

In the green: Juhayna (+0.4%), Elsewedy Electric (+0.4%) and e-Finance (+0.3%).

In the red: Madinet Nasr Housing (-4.5%), Rameda (-3.3%) and Palm Hills Development (-3.2%).

Asian markets are firmly in the red in early trading this morning and futures suggest major stock indices on both sides of the Atlantic will open down later on today, Markets are struggling to shake weeks of negative sentiment on the back of global interest rate rises and recession fears.


Kuwaiti election hands more seats to opposition candidates

Opposition candidates make gains in Kuwait election: Thursday’s parliamentary election in Kuwait returned a greater share of the vote to opposition candidates, upping pressure on the government which was hoping to defuse a standoff and press on with economic reforms, Reuters reports. Most pro-government lawmakers lost their seats to candidates from the Shi’ite bloc and the Islamic Constitutional Movement, the local branch of the Muslim Brotherhood. Crown Prince Sheikh Meshal Al Ahmad Al Sabah accepted the government's resignation yesterday, state news agency KUNA reported.

Also worth knowing this morning:

  • Lebanese political factions can’t agree on a new president: Lebanon’s parliament failed to elect a successor to replace President Michel Aoun, whose term ends on 31 October, raising the possibility that the country will be left without a head of state as it struggles through its worst financial crisis in decades. (Reuters)
  • Israel and Lebanon could soon redraw their maritime borders after Israel granted preliminary approval to a US-mediated agreement that could see the two countries set up a profitsharing agreement for offshore gas exploration. (Reuters)

Egypt isn’t spending enough on education, leading to a shortage of teachers + classroom space, World Bank says: A “historic trend” of insufficient public spending on education has led to a shortage of teachers and classroom infrastructure, putting public education in Egypt under significant strain, according to a new report by the World Bank. Public schools have been experiencing a shortage of teachers due to a hiring freeze at a time when the number of elementary school students has been steadily rising. Similarly, classroom construction has lagged behind demand. The World Bank’s Egypt Public Expenditure Review for Human Development gives an overview of the current situation in Egypt’s pre-university education, explains how we got here and gives recommendations on how to move towards a more efficient spending and development structure.

Lay of the land: Egypt has the largest number of students in the Middle East and North Africa region, and most of them are in the primary stage, according to the report. There are currently more than 24 mn students in pre-college programs, almost 90% of whom are in public schools. Nearly half of the students in the system are in primary education. Almost 1 mn teachers work in the education field, and more than 40% of them teach at the primary level, the report says. Non-teaching staff, which includes school management, supervisors, and maintenance crews, add another 500k people to the system.

Student enrollment is highest during the primary years and decreases during the secondary years: Almost all of the children in the primary age group are enrolled, as are 91% of the children in the preparatory age group. Enrollment, on the other hand, is lowest at both ends of the system. The pre-primary net enrollment rate is currently at 21% — one of the lowest rates in the region, the report says. The enrollment rate drops again after the preparatory level to reach 60% in secondary education.

The teacher shortage and overcrowded classrooms are weighing on educational quality, according to the report, which used two metrics to assess our quality of education: The student-teacher ratio, and the student-classroom ratio. These two factors indicate teacher workload and the level of attention provided to students. The average student-teacher ratio in public primary school is currently 32, and drops to 17 in secondary school. The ideal student-teacher ratio does not have a set, universally accepted number, but some experts agree that an ideal student-teacher ratio is 18:1. This ratio enables teachers to promote a positive learning environment that offers specialized assistance and student achievement tends to improve with smaller classes and lower student-teacher ratios.

Why is there a shortage in the first place? Government schools have been facing a substantial shortage of teachers, which former education minister Tarek Shawki previously put at as many as 250k. K-12 teachers in Egypt face a variety of challenges, including low pay and a lack of necessary qualifications, according to research (pdf).

As for the student-classroom ratio, there’s an average of 56 students per classroom at primary school, which is a demanding environment for both teachers and students. The average student-classroom ratio drops to 34 at secondary schools, the report says. Students in smaller classes — especially those who start in smaller settings in the early grades — display more notable long-term gains in comparison to those in larger classes.

We need to build 117k classrooms in five years to relieve pressure on public schools and reduce class sizes to 45 students, the World Bank report says, assuming that the average annual growth in the number of students from 2017 to 2021 will hold steady until 2026. To maintain student-classroom ratios where they are, 50k classrooms must be built by 2026. If public spending falls short of the “business as usual scenario,” with only 10k classrooms built by 2026, class sizes will rise from 56 to 65.

Education accounts for 26.8% of the nearly 2.1 tn planned for spending next year, with some EGP 555.6 mn earmarked for investments and expenditure in education, higher education, and academic research — up nearly 22.8% from the current fiscal year. The government has put more focus on plugging teacher and classroom shortages and developing school infrastructure in its budget plans this year. Some EGP 4.5 bn has been earmarked for the construction of 25k classrooms, representing a 40% increase over classroom investments in the last fiscal year, while another EGP 1.8 bn will be spent to address the teacher shortage.

A revised budget process should add more public classrooms and teachers, as part of the ongoing basic education reforms being carried out by the Education Ministry, the report suggests. To manage the shortage ahead of the 2021-2022 school year, the Education Ministry resorted to hiring temporary teachers and distributing students across multiple shifts during the day, with a yet-to-be-discovered impact on education quality. The government decided to hire 30k new teachers per year starting this year, for a total of 150k new teachers over five years, with a focus on early grades.

The World Bank advises that we revise how we approach our education spending targets: The process for allocating funds in the education budget is heavily based on how much money was spent in the previous three years, the report found. This makes sector financing inefficient, because the number of students, the number of teachers required, and the progress of specific education strategies are not taken into account. A history-based approach makes it extremely difficult to match national education priorities and goals with adequate resources, the report says.

Investing more in primary education and training temporary teachers should be high up on the agenda, the report suggests. Demographic pressure will drive up student enrollment over the next five years, potentially necessitating the use of substitute teachers, the World Bank points out. Temporary teachers can be introduced gradually into the system, preserving teacher quality, and short-term contract teachers can be given specialized training before being hired on long-term contracts, the report suggests.

Your top education stories for the week:


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.


27 September-27 October (Tuesday-Thursday): The Egyptian Museum the Manial Palace Museum host a book fair.


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

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

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

5 October (Wednesday): OPEC+ meeting, Vienna.

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

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

10 October (Monday): The CEO Women Conference.

10-14 October (Monday-Friday): Gitex Global, Dubai International Convention and Exhibition Centre, Dubai, UAE.

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.

17 October (Monday): Fifth Egypt and UN-led regional climate roundtable ahead of COP27, Geneva, Switzerland.

18 October (Tuesday): The Egyptian-Swedish business forum, Stockholm, Sweden.

23-25 ​​October (Sunday-Tuesday): Egypt economic conference, Cairo, Egypt.

24 October (Monday): Empowering Sustainable Trade Flows with Factoring conference, St. Regis Cairo.

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

27-30 October (Thursday-Sunday): Cairo ICT, Egypt International Exhibition Center, New Cairo.

30 October – 1 November (Sunday – Tuesday): Egypt Energy, Egypt International Exhibition Centre (EIEC) in New Cairo.

Late October-14 November: 3Q2022 earnings season.

Late October: First Abu Dhabi Bank to complete full integration with Bank Audi’s Egyptian operations after merger.


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

1-2 November (Tuesday-Wednesday): Arab League annual summit, Algiers, Algeria.

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

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

3-5 November (Thursday-Saturday): Egypt is hosting the 17th UN Climate Change Conference of Youth (COY 17) in Sharm El Sheikh.

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.

9 November (Wednesday): Finance Ministry to host “Finance Day” at COP27.

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.


3 December (Saturday): Dior Men’s pre-fall collection show in Giza.

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: Egyptian Automotive Summit.

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


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): Use of Nafeza becomes compulsory for air freight.

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.


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.

23-27 February (Thursday-Monday): The eighth annual Business Women of Egypt’s Women for Success conference.

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

19-21 June (Monday-Wednesday) Egypt Infrastructure and Water Expo debuts at the Egypt International Exhibition Center.

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.


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

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


6 October (Friday): Armed Forces Day.

Late October-14 November: 3Q2023 earnings season.


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.

4Q 2022: Saudi Jamjoom Pharma to inaugurate its EGP 1 bn pharma factory in El Obour.

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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