Sunday, 22 January 2023

AM — Foreign investors eye Egyptian debt amid higher yields, weaker EGP



Good morning, folks, and a very warm welcome to the Year of the Rabbit. To our friends and readers celebrating the Lunar New Year, we wish you health and happiness.

We’re wishing particularly happy holidays to those choosing to spend them in Egypt: Cairo International Airport welcomed a group of Chinese tourists on board a Sichuan Airlines flight on Friday, the first Chinese-flagged flight to land in Egypt in years, the Civil Aviation Ministry said in a statement.

And more Chinese tourists could arrive soon: EgyptAir will resume flights to China in March after Beijing eased its covid-19 travel curbs, CEO Yehia Zakaria said during a presser on Friday, according to Al Shorouk. The flag carrier will operate 13 flights a week to cities including Beijing, Hangzhou, and Guangzhou, he said. Flights to and from China have been on a three-year hiatus due to the pandemic.

We have a holiday of our own this week: Thursday is a paid holiday for private sector employees to mark Police Day and the 25 January revolution, the Manpower Ministry confirmed in a statement on Friday, following an announcement by Prime Minister Moustafa Madbouly last week. We’re still waiting on similar announcements from the central bank and stock exchange.

EGP WATCH- The EGP slipped another 0.6% against the greenback on Thursday to 29.89 from 29.70 from the day before, according to the official central bank exchange rate. The EGP started the year at 24.70 to the greenback.

PRIVATIZATION WATCH- Prime Minister Moustafa Madbouly headed the first meeting of a committee formed to implement the state ownership policy document on Thursday, cabinet said in a statement. Attendees included everyone from the good folks at the Sovereign Fund of Egypt to the ministers of planning, finance, electricity, housing, agriculture, local development, industry, as well as the heads of GAFI and the military’s NSPO. The committee heard that the Cabinet’s Information and Decision Support Center is building a database of state-owned companies.

REMEMBER- Released in December, the final version of the privatization strategy charts how the government aims to more than double the private sector’s role in the economy to 65% and attract USD 40 bn in private investment by 2026. The government says it will reduce its involvement in a number of sectors via public share offerings, stake sales to strategic investors, and expanding public-private partnerships.

WATCH THIS SPACE- GAFI wants to make it easier to set up a new company: GAFI plans to launch in early April an electronic platform to make it easier to set up a business, CEO Hossam Heiba was quoted as saying by Al Borsa. The platform will provide investors with the services to establish companies, authenticate contracts at notary offices, and register using electronic signatures among other services.

AND- We’re through to the quarter-finals of the International Handball Federation’s 2023 World Championship: The national handball team came through the group stage on top after beating Belgium 33-28 on Thursday and Bahrain 26-22 on Friday. We have one last showdown in the group stage with Denmark tomorrow at 9:30 pm CLT, but the result won't affect our chances. Details of the final fixtures are yet to be announced.



We’re excited to unveil our next C-level event: The Enterprise FDI + Exports Forum, where we will take a deep dive into two of the most critical topics affecting our community.

Exports and foreign direct investment (FDI) have never been more important to our economy — or our businesses — than in the wake of the float of the EGP. We think we have a once-in-a-lifetime chance to build an export-led economy that makes us a magnet for FDI and all the benefits that will come with it for our nation.

The Enterprise FDI + Exports Forum asks a simple question: Where do we go from here?

The Enterprise FDI + Exports Forum is the latest in our series of must-attend, invitation-only gatherings for C-suite-level business leaders, where they can talk openly and honestly about important issues in key parts of the economy. The gathering, which will take place in May 2023, will focus on how to start making moves across continents, including:

  • What do we have to sell to global markets, including products and services? What should our priority industries be?
  • How can you break into an export market? How can you make your business a component of the global supply chain? Hear from directly from potential partners and buyers about what they’re looking for.
  • How to leverage big domestic trends — and turn them into even massive export opportunities.
  • How to climb the value-add ladder in a way that matches up with trends in key export markets.
  • How do you choose an export market? What countries should Egyptian businesses be looking at as export targets — and why?
  • What are foreign investors looking for? How can you pitch them on a JV — or on investing in your business?

Think of the Enterprise FDI + Exports Forum as a hands-on lab for how to turn the float of the EGP into something that will turbocharge your company.

COMING IN MAY — stay tuned for updates.

Want to partner with us on the conference? Ping a note to Moustafa Taalab, our head of commercial, here.


The Senate is back in session today and tomorrow to discuss this year’s tourism promotion strategy, taxing teachers on their private tutoring income, and legislation to boost exports.

  • The Senate’s Financial and Economic Committee will debate amendments to the 2017 investment law that would boost export-led industries, as well as ways to remove obstacles to upping meds and pharma exports across the African continent.
  • Tourism Minister Ahmed Issa will explain how the government plans to more than double tourist revenues and the number of visitors to Egypt. We’re hoping to attract as many as 30 mn tourists to the country by 2028, Tourism Minister Ahmed Issa said last week. The government plans to launch a new tourism strategy later this quarter to bring more people to the country.

AND TOMORROW- Time to tax private tutors? Senators are set to discuss the possibility of imposing a 10% income tax on teachers who provide private tutoring, with the proceeds to be spent on improving public schools. Education Minister Reda Hegazy will also deliver a statement on education reform.

Hani Sonbol, CEO of the International Islamic Trade Finance Corporation (ITFC), is in Cairo, Al Mal reports. Sonbol will meet with government ministers to discuss the organization’s work in Egypt.


El Sisi heads to India on Tuesday: President Abdel Fattah El Sisi will lead a delegation including ministers and other officials on a three-day visit from Tuesday, 24 January to Thursday, 26 January at the invitation of Indian Prime Minister Narendra Modi, according to an Indian Foreign Ministry statement. El Sisi will hold bilateral meetings with Indian officials, meet with representatives of the local business community, and be honored as “chief guest” at celebrations to mark the 74th anniversary of Indian independence, the statement reads.

THE BIG STORY ABROAD- More goodies have been unearthed in the ongoing Easter Egg hunt that is the US Justice Department’s search for classified documents President Joe Biden has left places. The Financial Times, Reuters, AP News, the Wall Street Journal, the Washington Post, and the New York Times are all splashing the news.

In the business press, it’s going to be a busy — and likely brutal — week for tech earnings: US equity investors are entering the week with gritted teeth as Microsoft and Tesla headline a flurry of major earnings releases that will help reveal the state of the economy as many gird for a recession this year. In the tech sector at least, a recent wave of job cuts at major firms means hopes are not high. Bloomberg and the WSJ have more.

Having over-hired when times were good, tech giants are now slashing jobs hard and fast: At least 200k people have lost their jobs at US-based tech giants since the start of the year, including:

  • Amazon — 18k
  • Google — 12k
  • Meta — 11k
  • Microsoft — 10k
  • Salesforce — 8k
  • Twitter — 4k


We, for one, will welcome our new robot overlords: Tyrell Corp Boston Dynamics over the weekend showed off the latest moves of its humanoid robot. Terrifying, yes. But that 360° backflip? (watch, runtime: 1:20)

AND- Add “getting a Wharton MBA” to the growing list of things AI sensation ChatGPT can do at least as well as you.


European Investment Bank President Werner Hoyer met International Cooperation Minister Rania Al Mashat to discuss next steps in the lender’s role as “main development partner” for the government’s landmark Nexus on Water, Food and Energy (NWFE) climate program, according to a cabinet statement. The pair met on the sidelines of the World Economic Forum in Davos, which wrapped last week.

REMEMBER- The government managed to secure some USD 10.3 bn worth of climate funding agreements at COP27 for NWFE, which seeks to implement some USD 15 bn worth of projects to turbocharge the country’s green transition, including an energy project worth USD 10 bn and eight food security, agriculture, and irrigation and water projects.

MORE ON CLIMATE FINANCE OUT OF DAVOS- ESG is getting far too personal for Mr. Fink. BlackRock CEO Larry Fink wants those on all sides of the ESG debate to put down the pitchforks, saying at a Bloomberg event in Davos that the “narrative” around socially and environmentally responsible investing “is ugly, the narrative is creating this huge polarization… It’s hard because it’s not business any more, they’re doing it in a personal way.” BlackRock has found itself between a rock and a hard place trying to appease those on both ends of the US political spectrum over environmental standards, Bloomberg reports. The giant asset manager is trying to “change the narrative” on ESG and green investments to focus on “the concept of hope,” Fink said.


The Cairo International Book Fair will open its doors to the public at the International Exhibition Center in New Cairo this Thursday, 26 January. The event runs until 6 February.

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


*** It’s What’s Next day: We have our weekly deep-dive into what makes and shapes pre-listed companies and startups in Egypt, the UAE and KSA, touching on investment trends, future sector insights and growth journeys.

In today’s issue: Why some Egyptian startups prefer to set up shop abroad.


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Higher yields + a weaker EGP have foreign investors looking at Egypt

Higher yields + weaker EGP could bring foreign investors back to the market: Foreign investors who sold out of Egypt last year are once again looking at Egypt’s debt market on the back of a cheaper EGP and record yield, Bloomberg writes. The spread between most EGP treasury bills and other emerging-market debt last week widened to its highest on record, while authorities’ commitment to a flexible exchange rate has removed some of the currency risk and made EGP more attractive to foreign investors, the business newswire reports.

Inflows have picked up this month after the central bank allowed the currency to depreciate further against the greenback. Some USD 925 mn entered Egypt’s foreign exchange market in the three days following the devaluation on 11 January, which saw the EGP fall to a record low of 32.20 against the greenback during trading before rebounding.The EGP has continued to slip slightly against the USD in the days since and closed last Thursday at some 29.89 against the USD, according to the official central bank rate.

Conditions are improving: “After holding an underweight position for much of 2022, I finally see the conditions for re-entering the local market,” an analyst at Columbia Threadneedle Investments told Bloomberg. Columbia Threadneedle believes that the EGP is up to 25% undervalued when measured by its real effective exchange rate. “It does feel like we are closer to the end of the FX devaluation process now than the beginning,” said a fund manager at Fidelity International. “We can expect demand to resume, especially in an environment where global inflation, global yields and the USD are all now pushing lower.”

More to be done? “With inflation spiking to close to 30% in the coming months and no FX anchor given the change in regime, we still think the CBE has to show more mettle,” a London-based portfolio manager at FIM Partners said. The central bank has raised interest rates 800 bps over the last year, pushing its key rate to 16.25% — its highest level since early 2019. Others say the EGP still has further to fall against the greenback before they are ready to re-enter the market, with Deutsche Bank among those predicting the EGP to weaken further to USD 33 before it stabilizes.

The state has been trying to bring investors back to the country to quell a foreign-currency shortage. Investors pulled some USD 22 bn from EGP-denominated debt between March and September last year on the back of the war in Ukraine, tightening financial conditions, and soaring inflation, which pushed real interest rates deep into negative territory.

FX shortage in the rear-view mirror? President Abdel Fattah El Sisi presented the USD shortage as a thing of the past over the weekend in a speech (watch, runtime: 3:42) aimed at reassuring the public amid soaring prices. “We had an issue securing USDs over the past couple of months … but at the moment we have no issues related to the USD,” El Sisi said, defending his government’s record on the economy. “Things are hard but thankfully we have them under control and we will be able to surpass them and move forward together,” he said.


GB Capital sells a 45% stake in GB Lease to Chimera Investments

It’s official: Chimera to acquire 45% of GB Lease: GB Capital has finalized an agreement to indirectly sell 45% of its leasing business, GB Lease, to our friends at Chimera Investments for EGP 855 mn, parent company GB Auto said in an EGX disclosure (pdf) Thursday. This comes two weeks after GB Auto’s board greenlit the stake sale to the Abu Dhabi-based investment firm. GB Capital will a controling 55% stake in the company, which the transaction values at EGP 1.9 bn according to our math.

Refresher: GB Capital in September said it had entered talks with Chimera regarding a potential sale. The GB Auto subsidiary has been considering a partial selldown of its leasing business for over a year to bring in a strategic partner, during which time the company received proposals from several companies.

This isn’t the first time the two companies have partnered: In November, GB Auto sold Chimera a 7.5% stake in Netherlands-based MNT Investments as part of a larger agreement that would see Chimera purchase a 21.7% stake in the tech-enabled lender, which focuses on Egypt’s large unbanked population.

Advisors: Arqaam Capital acted as sell-side advisor to GB Capital, while Matouk Bassiouny & Hennawy acted as legal counsel. Adsero-Ragy Soliman and Partners acted as buy-side counsel to Chimera.


Flush after exits, B Investments targets healthcare, food sectors

EGX-listed private equity firm B Investments intends to invest EGP 2 bn in the healthcare and food sectors in 2023, Chairman Hazem Barakat reportedly told Bloomberg Asharq. The company hopes to close an acquisition of a healthcare company in 1Q 2023, while the transaction in the food sector is expected to be completed in 2Q, he is quoted as saying.

Exits are funding the acquisitions: B Investments will reportedly fund the new investments with some of the proceeds of its exit from TotalEnergies Egypt and Giza Systems. The company is selling down its 44.7% stake in Giza Systems to a subsidiary of Saudi Telecom (STC) for USD 128 mn, and last month agreed to offload its 6.4% stake in TotalEnergies Egypt to TotalEnergies Marketing Afique (TEMA) for USD 27.6 mn.



Swvl hit with a second Nasdaq delisting notice, will unwind Volt Lines acquisition

Swvl can’t catch a break: Cairo-born mass transport app Swvl received its second delisting warning from the Nasdaq after the market value of its listed securities dipped below the benchmark USD 50 mn, it said in a disclosure last week. The company has until 10 July to raise its market value to more than USD 50 mn for 10 consecutive days or else it will be delisted from the Nasdaq. This would require the company to more than double its current market cap, which as of Friday’s close stood at almost USD 22.9 mn.

This is the second delisting warning Swvl has received in recent months following a tough start to life as a public company. The company has traded below USD 1.00 a share since mid-September, triggering a warning from the Nasdaq in November that it would be delisted from the bourse if it failed to bring its shares above USD 1.00 for a 10-day stretch before 1 May.

Swvl’s share price has collapsed by more than 98% since its IPO last April when it was taken public via a SPAC merger that originally valued the company at USD 1.5 bn. The company debuted on the tech-heavy exchange at USD 10.00 a share and is currently trading at just USD 0.17.

It’s not just market volatility: Despite solid revenue growth, Swvl’s losses doubled during the first six months of 2022 due to rising expenses and costs relating to its Nasdaq listing, and in July the company was forecasting losses to double to USD 90 mn for the year. The company is yet to publish its 3Q financials.

Swvl is considering all of its options: Swvl said last month that it had formed a strategic committee “to explore and evaluate potential strategic alternatives.” The company said it was considering “corporate sale, merger or other business combination, a sale of all or a portion of the company’s assets, strategic investment, new debt or equity financings or other significant transactions.”

Cut costs wherever possible: Swvl was forced into making large-scale layoffs last year in a bid to steady the ship. It has reduced headcount by more than 50%, cut back on executive pay and closed some of its less profitable routes. It has also recently shuttered its operations in Pakistan, Pakistani media reported late last year.

Volte face: Swvl will unwind its acquisition of Turkish mobility business Volt Lines, which it completed last year, it said in last week’s filing. The former Volt Lines shareholders who traded their shares for Swvl shares “are not obligated to retransfer or cancel the tranche of their Swvl shares already received,” the disclosure said. Representatives from Swvl and Volt Lines didn’t respond to requests for comment when we reached out yesterday.

This is the second acquisition to fall through in recent months: Swvl and UK startup Zeelo called off a planned merger in July, citing turmoil in the financial markets.

Swvl went on an acquisition spree last year: The company acquired mobility platform Shotl, a Spanish firm that operates in 10 countries including Brazil and Japan. In November 2021 it took a controlling stake in South American transit company Viapool and last year entered Central Europe with its acquisition of German company Door2Door.


Ex-Beltone execs launch SME finance outfit Invia

Former Beltone Financial executives are launching new fintech startup Invia, which will provide financial services to informal small businesses that have limited access to financing, the National reports.

Behind the company: Yehia Ashour (LinkedIn), former CEO and co-founder of Beltone’s SME unit; Ahmed Zeinhom (LinkedIn), Beltone SME’s former chief investment officer; and Omar Aboulmagd (LinkedIn), Beltone SME’s former investment director.

What they said: “We want to localize the value chain and develop the companies that will make this country less dependent on imports,” Ashour told the newspaper. “With the economic conditions in Egypt, specifically, the solution we need is to make the small businesses bigger, and especially the small manufacturing businesses.”

Funding on the way: Invia is currently raising a pre-seed round which the National says will be announced in the coming months.

REMEMBER- Beltone is adjusting to new ownership. Employees at Beltone SME reportedly resigned en masse late last year, while top execs departed other branches of Beltone Financial. The company is now recruiting talent at multiple levels after Abu Dhabi-based Chimera brought in a new CEO and chairman at Beltone Financial and appointed two new non-executive board members. Chimera acquired a 56% stake in the company in October, replacing Orascom Financial Holding as Beltone Financial’s controlling shareholder.


Mohamed Mahran (LinkedIn) has been appointed executive chairman and managing director of Misr Ins. Holding (MIH) after Basel El Hini submitted his resignation as MD and non-exec chair of the state-owned company, the Public Enterprises Ministry said (pdf) over the weekend. Mahran has some 35 years of experience in the ins. industry and has been the managing director of Allianz Egypt for more than a decade.The ministry also appointed Assem Ragab (LinkedIn) as the company’s non-executive chairman. Ragab, the Mubarak-era head of GAFI, has been vice chairman of QNB Al Ahli since May 2022.

Kelma Akhira’s Lamees El Hadidy had high praise for El Hini’s accomplishments during his tenure at MIH (watch, runtime: 5:08). He was appointed in 2018. Catch our interviews with him here and here — he’s one of the good guys.



It was a quiet night on the airwaves last night, with the pundits praising the Bank of Russia’s move last week to approve the EGP as a trade currency, as well as the arrival of the first flight to Egypt from China in years.

Moscow’s inclusion of the EGP as a currency of trade will make it easier for us to import from Russia without putting any pressure on our USD reserves, Amr Al Samdouni, secretary-general of the Federation of Egyptian Chamber of Commerce’s international transport and logistics division, told Salet El Tahrir in a phone call (watch, runtime: 7:43.) Importers will now be able to open letters of credit in EGP to release shipments coming from Russia, Al Samdouni clarified.

Can we do the same with China? Market watcher Hany Aboul Fotouh was also keen on the agreement, calling for a similar pact with China (watch, runtime: 7:01.) This was echoed by Yomn El Hamaky, economics professor at Ain Shams University, who called on the Egyptian and Chinese central banks to agree on mechanisms to activate an already existing agreement that allows for trade in local currencies in a phone call to Al Hadath Al Youm (watch, runtime: 8:31.)

Price wars in the tourism sector? A yearslong pricing war between local tourism companies has decreased quality in the sector and spooked potential visitors, Egyptian Tourism Federation member Ali Ghoneim told Al Hadath Al Youm in a phone call (watch, runtime: 9:35.) Ghoneim was invited to speak as part of a segment on the return of Chinese tourists to the local market after Beijing lifted strict covid restrictions (more on that in What We’re Tracking Today, above.)


Juhayna founding family released from prison: Reuters is reporting that the founder and former CEO of dairy foods giant Juhayna, Safwan Thabet, and his son Seif Thabet (who has long been active in the business and was CEO after his father’s arrest) have been released from prison. Safwan’s daughter Mariam Thabet also announced their release yesterday in a tweet. Safwan and Seif were detained within months of each other in late 2020 and early 2021 after being accused of joining and funding a terror organization. The family has consistently denied any wrongdoing. No official statement has yet been issued regarding the Thabets’ release and a prison source reportedly told Reuters that their case has not yet been closed.

Our economic crisis is getting yet more ink: Several outlets are out with new pieces on the economic crisis spurred by accelerating inflation and a currency crunch. Reuters looks at the impact of soaring prices on the public and the growing demand for charities, while Haaretz is running two pieces (here and here).

Also making headlines:

  • Salut, Ramses II: The sarcophagus of Ramses II will travel to the US, France and Australia as part of a five-month exhibition that starts in April. This will be the first time in 50 years that the artifact has gone on display in Paris. (The National)
  • The Washington Post is the latest to review awardwinning graphic novel Shubeik Lubeik by Egyptian author Deena Mohamed.



Magnom + Forbes to build tower in new capital: Magnom Properties, a unit of Saudi Arabia’s Rawabi Holding, signed a MoU with business magazine Forbes to build the zero-carbon Forbes International Tower in the new capital, Magnom said in a statement (pdf). The agreement was signed on the sidelines of the World Economic Forum in Davos last week.


Offers roll in for GASC’s first corn tender: The lowest offer in our first international corn tender was USD 336 per ton for 30k tons of Ukrainian corn on a cost and freight basis (C&F), traders said Thursday, Reuters reports. Suppliers offering corn from Argentina, Brazil, Romania, and the US also bid in the tender, which sought offers on a C&F or cost, ins. and freight (CIF) basis. The shipment will be delivered between 10-25 February. The International Islamic Trade Finance Corporation will finance the purchase and the corn will be used for feed.


No more long trips on ACID: The Finance Ministry has decided to stop granting importers extensions on the validity of their ACID numbers, a unique ID number that importers obtain through the digital Nafeza customs window at least 48 hours before their goods are shipped, according to Al Mal. ACIDs are usually valid for a six-month period and are sometimes extended for an additional six months.


NBE to finance Magic Land redevelopment: The National Bank of Egypt will finance two-thirds of Magic Land Al Hokair’s EGP 1.1 bn redevelopment of Magic Land, it said in a statement (pdf) last week. The state-owned bank agreed to lend the Al Hokair Group subsidiary EGP 723.5 mn over seven years for the project.


Lawyers strike in protest at colleagues' imprisonment: The Egyptian Bar Association announced an indefinite strike starting last Thursday in protest at the imprisonment of six colleagues last week, the association said in a statement. Last week, the Marsa Matrouh criminal court sentenced six lawyers to two years in prison after they clashed with court clerks, Masrawy reported. The news got attention from AFP.


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Global bond-sale bonanza rings in the year with a record start: Governments and companies issued USD 586 bn worth of bonds through to 18 January, making 2023 the busiest start to the year on record in the global bond market, Bloomberg reports. Issuers are taking advantage of a strong market rally which has seen bond prices rise 4.1% since the start of the year, the best performance since records began in 1999. Investors have re-entered the market in droves in response to slowing inflation and hopes that central banks will relax their aggressive monetary tightening policies.

A record week for EMs: Emerging-market equity and bond funds saw a record USD 12.7 bn in inflows last week as China’s relaxation of its covid-19 curbs continues to drive optimism, according to Bank of America figures picked up by Reuters.

Some notable forecasts for 2023: Bloomberg Intelligence forecasts 8% gains for emerging-market bonds this year, with bonds of longer maturities — led by real-estate investment trusts (REITs), natural gas and sovereign bonds — potentially notching higher returns. US investment-grade bonds are expected to return 10% in 2023, while investment-grade euro-denominated credit may advance 4.5%.


  • A bad year for the EBRD? The European Bank for Reconstruction and Development (EBRD) is bracing for record losses in 2022 triggered by its portfolio holdings in Russia and Belarus. (Reuters)
  • Startup winter continues as Shein valuation slashed in talks for new funding: Chinese fashion startup Shein’s negotiations to raise up to USD 3 bn from existing investors would reportedly slash its valuation by more than a third to USD 64 bn. (Financial Times)
  • More tech job cuts: Google parent Alphabet will let go of some 12k employees, following in the footsteps of Microsoft and Amazon which together began slashing their headcounts by 28k last week. Alphabet’s announcement takes total job cuts in the tech industry over the past year to over 200k. (Financial Times)
  • Aramco prepares for IPO of trading unit: Saudi Aramco has combined US refiner Motiva Trading with its trading arm in preparation for an IPO that could value the business at more than USD 30 bn. (Statement | Bloomberg)
  • Another crypto firm bites the dust: Crypto lender Genesis became the latest victim of the FTX collapse and the downturn in the crypto markets on Thursday when it filed for Chapter 11 bankruptcy. (Statement | Coindesk)




+0.5% (YTD: +10.1%)



Buy 29.77

Sell 29.87



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Sell 29.89


Interest rates CBE

16.25% deposit

17.25% lending




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Brent crude

USD 87.63



Natural gas (Nymex)

USD 3.17




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USD 22,752

+0.5% (YTD: +38.5%)


The EGX30 rose 0.5% at Thursday’s close on turnover of EGP 911.58 mn (46.5% above the 90-day average). Local investors were net sellers. The index is up 10.1% YTD.

In the green: Palm Hills Development (+9.2%), Heliopolis Housing (+6.7%) and Cleopatra Hospitals (+3.9%).

In the red: e-Finance (-4.2%), Orascom Construction (-2.0%) and EFG Hermes (-1.9%).


Why — and how — do Egyptian startups incorporate offshore? Many Egyptian startups, especially those that have raised USD mns in funding, are legally incorporated abroad. Where is no readily available data on the topic, but the trend is one our sources agree has been gaining traction, particularly amid the recent FX shortage. The decision to set up shop abroad is primarily led by investors, rather than startup founders themselves, and typically driven by regulatory and legislative factors, as well as payment facilitation, according to several sources we spoke with.

How does it work? Founders typically set up holding companies in other jurisdictions, with Delaware and the British Virgin Islands among the two most common. The offshore holding company then owns all of the company’s subsidiaries around the world, with each subsidiary paying taxes in its local jurisdiction.

The startups themselves operate in Egypt because operating expenses here are much cheaper, while being domiciled abroad makes it easier for other purposes. The holding company is there for investment and strategic purposes, while the main operations take place in Egypt — until, at least, the company gains traction in other markets.

What makes offshore structuring so attractive?

#1-Alternative investment vehicles: There are a multitude of alternative investment instruments popping up worldwide, but Egypt still lacks the regulatory frameworks for many of them, which makes it necessary for companies seeking these types of investments to have a legal presence in a different jurisdiction. “The option of registering your company in Egypt is fine when you start operating, but if you want to raise funding from international and regional VC investors, the only way to do that is to be a non-Egyptian company to be able to unlock more investment and other financial mechanisms during the funding rounds,” a cofounder of a SaaS startup, who requested to remain anonymous, tells Enterprise. What type of instruments? Our mind immediately goes to convertible notes, for starters.

#2- Shareholder agreements: While Egypt’s Investment Act does cover certain standards such as term sheets (which summarize the terms of a potential investment) and shareholders agreements, its approach to those instruments falls short of global standards.

What does that mean in practical terms? Let’s say all shareholders agree to a drag-along clause in a shareholder’s agreement, for example, which stipulates that majority shareholders can force minority shareholders to join a sale. In other jurisdictions, if a sale place, it would be implemented the way the agreement outlines: The minority shareholders simply must sell. In Egypt, minority shares are considered assets of the minority shareholder, who would need to approve the sale for it to go through, defying the agreement, senior partner at Levari Law Firm Mohamed Raslan notes. The nation’s investment, financial services, and tech regulators have been working since late spring of last year on changes to make SHA provisions including drag- and tag-clauses enforceable here in Egypt (here and here).

And when it comes to a startup’s expansion, the legal aspects get even more difficult. “When I want to expand my holding company internationally and hire people in Europe, Saudi Arabia, and other countries, managing the legal structure of multiple companies from Egypt is very difficult,” founder and CEO of Egyptian loyalty platform Gameball Ahmed Khairy says. “It’s then easier to have the holding company set up abroad.”

#3- Taxation is more efficient abroad, notes Khairy, who says offshore structures make it easier for regional and international investors to minimize capital gains taxes when investors want to exit — they don’t need to pay capital gains tax if the company is registered in Delaware, for instance. But in Egypt, exits are subject to a 22.5% capital gains tax, Raslan tells us.

#4- It’s easier to accept payments, some say: For startups that offer subscription plans with recurring payments, it cab be challenging to collect in Egypt from clients outside this jurisdiction, Khairy says. “I needed a Delaware entity so that I could use [payment processing platform] Stripe to accept recurring payments from clients globally,” he tells us.

#5- Foreign exchange issues: Investors “shy away from foreign exchange volatility,” Khairy says. What’s more, recently imposed limits on international spending using Egyptian credit cards have caused issues for several startups — particularly those whose operations are mostly in Egypt and whose revenues are EGP-denominated. The panoply of tech service providers with which every business must deal — Amazon, Google, Microsoft, Meta, and more — all demand payment in USD. We’ll dive into this issue, and how startups are coping, in part 2 of this story.

Your top stories on future trends for the week:

  • Nine local green startups have been selected to join the UK-backed Climate Finance Accelerator (CFA) Egypt’s inaugural program.
  • Egyptian e-sport platform GBarena is set to acquire Tunisian gaming startup Galactech in a USD 15 mn share swap.
  • Dubai-based BNPL startup Tabby has been valued at USD 660 mn after it raised USD 58 mn in a series C funding round, making it one of the most valuable startups in the region.
  • Talabat MD Hadeer Shalaby shares her Morning Routine.



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

January: Infinity + Africa Finance Corporation to close acquisition of Lekela Power.

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

26 January-6 February (Thursday-Monday): Cairo International Book Fair, Egypt International Exhibition Center.

26 January (Thursday): President El Sisi will visit India as “chief guest” at celebrations to mark the 74th anniversary of Indian independence.

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

30 January-1 February (Monday-Wednesday): CI Capital’s Annual MENA Investor Conference 2023, Cairo, Egypt.

31 January (Tuesday): The IMF will release its World Economic Outlook Update.


1 February (Wednesday): Capricorn Energy will hold a vote on its merger with Israel’s NewMed.

2 February (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

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): Annual Business Women of Egypt’s Women for Success conference.


March: 4Q2022 earnings season.

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

30 March (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.


April: GAFI to launch the country’s first integrated electronic platform to facilitate setting up a business.

1 April (Saturday): Deadline for banks to establish sustainability units.

10-16 April (Monday-Sunday): IMF / World Bank Spring Meetings, Marrakesh, Morocco.

16 April (Sunday): Coptic Easter

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).

30 April (Sunday): Deadline for self-employed to register for e-invoicing.

30 April (Sunday): End of Mediterranean, Nile Delta oil + gas exploration tender.

Late April – 15 May: 1Q2023 earnings season.


1 May (Monday): Labor Day.

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

4 May (Thursday): IEF-IGU Ministerial Gas Forum, Cairo.

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

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


10 June (Saturday): Thanaweya Amma examinations begin.

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

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

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

30 June (Friday): June 30 Revolution Day.


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.


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


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

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.


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


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


2023: The inauguration of the Grand Egyptian Museum.

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.

1Q 2023: Egypt + Qatar to launch joint business forum.

1Q 2023: FRA to introduce new rules for short selling.

1Q 2023: Internal trade database to launch.

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