Sunday, 29 January 2023

AM — CBE’s Monetary Policy Committee to raise interest rates by 100-200 bps this week –Enterprise poll



Good morning, wonderful people, and welcome back. We hope our Egypt-based readers made the best of the long weekend and are feeling energized as we head into the last week of January.

Next stop: Ramadan. The holy month begins on or about Thursday, 23 March, meaning we have 52 days to go. Our next public holiday here in Egypt will be the observance of Coptic Easter and Sham El Nessim in the final week of Ramadan.

BUT FIRST- **TAKE OUR 2022 ENTERPRISE READER SURVEY and get a chance to have lunch with us: Give us your thoughts on how 2022 panned out for your business and industry, and what you’re expecting in the year ahead in our Enterprise Reader Survey.

We’re asking you to share your expectations on the EGP / USD rate in 2023, how you’re managing expenses amid the rising cost of living, where you see your industry as a whole heading, and whether you expect to make fresh investments — among a few other questions we ask our community on a regular basis. As is our custom, we’ll be sharing the results with all of you in a few weeks’ time to help you shape your view of the year.

You can take the Reader Survey here — it won’t take more than a few minutes to complete.

Want to have lunch with us? Leave your name, email, mobile number, and where you work in the box for “Is there anything else you want to tell us. We’ll be inviting eight participating readers to breakfast at one of or favourite restaurants.

THE BIG STORY here at home: It’s the “unofficial economist” edition — and the experts are feeling largely positive about the direction our policymakers are taking. Analysts we spoke to are expecting the central bank to hike interest rates when it meets at the end of the week; analysts Reuters spoke to think growth will beat the government’s forecasts this year; and analysts at S&P Global are maintaining our B credit rating with a stable outlook.

IN MORE GOOD NEWS- The backlog of goods at ports has been cleared, Prime Minister Moustafa Madbouly said over the weekend. More on all those stories below.


Blinken in Cairo: US Secretary of State Anthony Blinken is in Cairo today and tomorrow to hold talks on regional security before heading to Tel Aviv and Ramallah later in the week, the State Department said Thursday. Blinken will sit down with President Abdel Fattah El Sisi, Foreign Minister Sameh Shoukry and other Egyptian officials to discuss the situation in Palestine as well as efforts to end the political crises in Libya and Sudan.

Blinken’s arrival in the region comes amid escalating violence in the West Bank: Violence between Palestinians and Israelis has escalated in the wake of Israel’s new hard-right government coming to power earlier this month. On Thursday, the Israeli military killed nine Palestinians in Jenin refugee camp and a day later a Palestinian gunman killed seven people outside an East Jerusalem synagogue. Two Israelis were wounded in a second attack yesterday. Egypt’s Foreign Ministry condemned the attack in East Jerusalem in a statement yesterday.

El Sisi visits Armenia for the first time: President Abdel Fattah El Sisi landed in the Armenian capital of Yerevan yesterday, marking the first visit by an Egyptian president since Armenia gained independence from the Soviet Union, according to a statement by Ittihadiya. The visit is part of an ongoing tour that also saw El Sisi visit India and Azerbaijan in recent days. El Sisi is set to meet with his Armenian counterpart Vahagn Khachaturyan, Pan Armenian reports citing a senior official at the Armenian presidential office.


WATCH THIS SPACE #1- The government will in two weeks reveal the details of the state-owned firms it plans to offer on the EGX this year, PM Moustafa Madbouly told reporters (watch, runtime: 9:25), as the state looks to revive its privatization program.

Who could it be? The government is ready to list four companies — Banque du Caire, Misr Life Ins, Egyptian Drilling Company, and Egyptian Linear Alkylbenzene Company (ELAB) — on the EGX, local media reported several weeks ago citing the bourse’s annual report. Eight more listings are reportedly in the pipeline.

WATCH THIS SPACE #2- NBE + BM to withdraw their CDs later this week: The report came a day after the National Bank of Egypt and Banque Misr announced they would be pulling their 25% one-year CDs at the end of the month. CIB, QNB Al Ahli and Banque du Caire also launched high-interest CDs of their own as defensive measures to protect deposits. Expect all of the banks to pull their CDs from the market at the same time.

WATCH THIS SPACE #3- New high-yield CDs on the block? Our friends at Mashreq Bank have reportedly received the central bank’s blessing to issue one-year certificates of deposits (CDs), Al Mal reports citing unnamed banking sources it says have knowledge of the matter. The savings products will reportedly offer a 22.5% return with interest to be paid out monthly. The bank will also issue three-year CDs offering buyers a one-time payment of 19% on maturity, or opt for payments monthly (18.75%), quarterly (18.80%) or semi-annually (18.90%), the news outlet reports.

DATA POINT- Some 40.2 mn Egyptians have been fully vaccinated against covid-19, while reported infections grew to 100 in the third week of January, up from 79 the previous week, according to Health Ministry figures released last week. The government is expecting 1 mn doses of the Pfizer vaccine to arrive in the next two weeks, the statement says, adding that another 2 mn will follow.

AND- The national handball team narrowly missed out on their shot to bring home the World Men’s Handball Championship, losing 22-26 to hosts Sweden in the quarter-finals in Stockholm last Wednesday. After a 34-35 loss to Germany on Friday in the playoffs for 5th-8th place, the Pharaohs will face Hungary this afternoon at 4:30pm CLT for their final match, which will determine if they finish the tournament in 7th or 8th place.


It’s interest rate week here at home… The Central Bank of Egypt (CBE) is likely to hike interest rates when it meets on Thursday, 2 February as inflation continues to run high, according to our latest interest rate poll. Get the full story in our Economy section, below.

…And in the US: Expectations are high that the Federal Reserve will continue to slow the pace of its interest rate hikes when it holds its two-day policy meeting on Tuesday and Wednesday. The market is pricing in a 93% chance that the central bank raises rates by 25 bps this week — down from 50 bps in its December meeting — after a gauge of consumer prices last week showed inflation continuing to slow last month.

Light at the end of the tunnel? Economists are now projecting the Fed to call time on its tightening cycle later this quarter after making two 25-bps hikes at its January/February and March meetings, according to a Reuters poll.

EBRD + EU + GCF are holding a green finance event on Tuesday: The European Bank for Reconstruction and Development, the EU, the Green Economic Financing Facility, and the Green Climate Fund will hold a green finance event on Tuesday, 31 January at the Nile Ritz Carlton Hotel.


The House of Representatives is back in session this week, with discussion and votes set on issues related to tourism, tax, and transport.

TODAY- Draft bill regulating tourism chambers up for a vote: The House will begin discussions ahead of a vote on a draft law that will remove responsibility for forming and regulating chambers of tourism from the Tourism Ministry and place it instead in the hands of the Egyptian Federation of Chambers of Tourism. The bill aims to make tourism chambers more democratic and independent and reinforce their role in promoting the industry, according to a report by the House Tourism and Aviation Committee.

AND- MPs will also discuss and vote on joining two multilateral agreements: one offering administrative assistance on tax matters, and the other to join the BRICS economic group’s New Development Bank.

TOMORROW- Transport Minister Kamel El Wazir is in the hot seat, facing questions in the House on railway and metro upgrades, ports, and maritime transport, as well as what some reps are characterizing as his “excessive borrowing policies” and the high cost of our new Spanish Talgo passenger trains.



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.


There’s still no word on when we’ll hear from the government’s fuel pricing committee: We’re still waiting for an announcement on when the committee will meet to decide on fuel prices for the current quarter. The committee usually meets at the beginning of every quarter to decide on fuel prices for the coming three months. The government has increased prices at the pump by 23-28% since April 2021, and decided on a rare fuel oil price hike last July.

Expect more hikes: The government has committed to changing local fuel prices in line with movements in the global markets under the USD 3 bn loan agreement with the IMF.

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


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CBE to hike interest rates this week -poll

The Central Bank of Egypt (CBE) is likely to hike interest rates when it meets on Thursday as inflation continues to run high, according to our interest rate poll. Four of the seven analysts and economists we surveyed see the Monetary Policy Committee raising rates later this week. Those predicting a hike are evenly split: Two expect a 100-basis-point hike and two are calling for a 200-bps hike.

Looking ahead: Six of the seven experts we surveyed expect rates to rise a total of 100-250 bps over the course of 2023.

Where rates currently stand: The overnight deposit rate currently stands at 16.25% and overnight lending rate at 17.25%, while the main operation and disc. rates are at 16.75%. The CBE raised rates by 800 bps last year, including a higher-than-expected jumbo rate hike of 300 bps in December — its biggest rate hike since 2016, before floating the EGP. The move came to curb inflation, which hit a fresh five-year high of 21.3% last month. It also preceded the latest devaluation of the EGP, which is now trading at around 29.94 to the greenback after starting the year at 24.70.

The consensus is that inflation has not yet peaked. All six of the analysts we spoke to expect inflation to continue rising in the coming months and to remain elevated over the course of 2023. Economist Mona Bedeir expects inflation to peak in 1Q 2023 at 24.7% on average, while HC Securities banking and macro analyst Heba Monir is predicting prices to peak in July at 23.5% before retreating to 18.2% in December 2023. Prime Securities’ head of Research Amr El Alfy thinks inflation will remain “in the double digit range until it begins to decline during the last quarter of this year.” Price hikes will be driven by the EGP depreciation and its ongoing impact on imports, expected fuel price increases, seasonal factors including Ramadan, and a potential hike to household electricity bills at the end of the fiscal year in June, those we spoke to said.

Meaning the central bank is likely to keep tightening past February: The majority of the analysts we spoke to predicted further tightening this year beyond next week’s meeting, with most predicting hikes of 200 bps or more over the course of the year — including HC’s Monir, who was one of two analysts to predict that the MPC will leave rates on hold this week. “We have penciled in a further 250 bps of increases this year and the risks lie to the upside,” Capital Economics MENA economist James Swanston said, without making a prediction about the February meeting. Prime’s El Alfy sees the CBE going for two consecutive 100-bps increases in February and March in a bid to get a handle on inflation.


#1- The carry trade. Recent USD inflows into the local market following the latest devaluation show that the “carry trade is becoming more attractive to foreign investors,” said HC’s Monir. That said, the latest issued 12-month T-bills offer only a 0.57% real yield, she added, “solidifying our view of a needed increase in policy rates until the end of the year.” Al Ahly Pharos economist Esraa Ahmed agreed, saying that “inflationary pressures accompanied by the weakening FX and the commitment to an IMF-backed program will induce the government and the CBE to try to shrink the negative territory of real interest rates.”

#2- FX liquidity + the EGP / USD rate. Several of those we spoke with struck a positive tone on the stability of the EGP, noting that the inflows triggered by our IMF agreement (including from Gulf investors), the latest devaluation, and the introduction of 25% certificates of deposit are working to ease a shortage of hard currency. But much can still happen: “Potential movements [in interest rates] are highly related to the USD liquidity availability in the coming period as a response to the recent EGP depreciation,” Al Ahly Pharos’ Ahmed told us. Bedeir said that “given the scale of FX backlogs and pent-up demand for the USD, it is necessary to respond proactively and firmly to the pressures on USD-EGP rate.”

#3- How the Fed moves. “Despite the recent recovery in global risk aversion, Egypt's monetary policy remains contingent on the [US Federal Reserve’s] policy cycle and the global risk environment,” said Bedeir. “Clarity from the Fed on its approach, as well as the impact on the USD and global liquidity conditions, will be crucial issues to monitor,” she added. “Looser financial conditions and a weaker USD would permit Egypt to loosen its present tightening posture, which we do not anticipate before the end of the first half of 2023.”

WATCH THIS SPACE- The Fed is widely expected to continue to slow the pace of its interest rate hikes with a smaller 25-bps increase when it meets on Tuesday and Wednesday.


Economy to grow 4.8% this fiscal year -Reuters poll

The economy could grow more than the gov’t thinks this fiscal year: The economy will grow at a 4.8% clip in FY 2022-2023, according to a Reuters poll of economists. That’s down from 6.6% last year, but above government forecasts. The Madbouly government is currently predicting GDP growth to come in at 4.0% this year, down from its previous forecast for 5.0% growth. Preliminary figures released in November indicated that the economy grew by 4.4% during 1Q.

Consensus among international players is that growth come in at about 4.5% this year: The World Bank is expecting our economy to grow 4.5% for the current fiscal year, while the IMF and Fitch are both predicting 4.4% growth tempered by inflation, a slowdown in public investments and a belated recovery for the tourism sector.

Erring on the side of caution: The government unveiled its most recent forecast in a letter of intent (pdf) sent to the IMF to secure its USD 3 bn loan. “Uncertainty surrounding the growth forecast is particularly large at this juncture and risks are skewed to the downside given the challenging external environment, namely tighter financial conditions, and high food and energy prices,” it wrote.

Speaking for the downside risk: Callee Davis, economist at Oxford Economics Africa, tells Reuters she believes growth will weaken to just 1.4% this year and 3.0% over the medium term on lower receipts from the privatization program and a slowdown in state spending on infrastructure projects.

Medium-term growth below gov’t / IMF forecasts: The Reuters poll returned median growth forecasts of 4.5%, 5.3%, and 5.4% during the next three fiscal years. This is lower than the IMF’s projections for 5.3%, 5.7%, and 5.9% growth,and below the government’s medium-term forecast for 5.5-6% growth.

A surprise strengthening of the exchange rate? The economists Reuters polled see the currency strengthening to 26.24 to the greenback by the end of the current fiscal year in June, from 29.94 currently. The EGP will then weaken again to 28.50 during the following year, according to the survey.


S&P Global affirms Egypt’s rating on exchange rate flexibility amid IMF, GCC support

S&P Global Ratings has affirmed Egypt’s B credit rating with a stable outlook, saying it expects fresh financial support from the IMF and the GCC will help us meet our external funding needs. The rating agency believes that Egypt will be able to rely on lenders to satisfy its FX needs — sitting at roughly USD 17 bn for FY 2022-2023 — thanks to the Madbouly government’s commitment to reform and the country’s solid growth prospects. The stable outlook also assumes that inflation will progressively subside and that the Central Bank of Egypt will remain committed to maintaining a flexible exchange rate.

FDI is expected to do the heavy lifting: The majority of the country’s foreign currency inflows will come through FDI, according to S&P, which estimates that Egypt will pull in close to USD 10 bn in FDI during the current fiscal year, up from USD 8.9 bn the year before. This is in addition to USD 6 bn in fresh external borrowing. The rating agency breaks our FX financing requirement down to USD 13 bn in current account deficit and USD 4 bn in sovereign debt principal payments.

Injections of more than USD 13.7 bn to cover our external funding gap: The rating agency anticipates that gross government external borrowing will amount to USD 10 bn during FY 2022-2023 with the bulk coming from multilateral and bilateral lenders. By the end of June, we are expected to have secured USD 3.7 bn in net external loans from the international bond market, including Eurobonds. S&P expects our GCC allies to cover the remainder in our external gap. The UAE, Saudi Arabia and Qatar have together pledged more than USD 22 bn to help us weather the implications of the war in Ukraine.

BUT- The rating agency will consider downgrading Egypt’s rating over the next 12 months if we fall short of funding targets or our external position comes under further pressure.

Thumbs up for the float: “The ongoing exchange-rate adjustment suggests that Egypt is committed to implementing the conditionality of the IMF program,” the rating agency writes. Following the most recent depreciation of the EGP against the greenback, it expects “confidence in the currency’s short-term price to improve, and for the private sector, banks and businesses to increase trade in USD.”

Where’s economic growth coming from? Construction and energy sectors will drive growth, alongside IT and communications, wholesale and retail, agriculture, and health. S&P sees the economy growing 4% in the short term.

The current account deficit will narrow by 20% to USD 13 bn in FY 2022-2023, down from USD 17 bn, while remaining unchanged as a share of GDP due to the devaluation of the EGP. The rating agency expects “import prices to moderate, while export volumes and remittances from Egyptians living abroad remain robust.”

The budget deficit will remain high at roughly 7% of GDP over the next three years, the rating agency wrote, raising its forecast by a full percentage point from its last report in October.


Volt Lines confirms Swvl breakup + Reverse stock split boosts Swvl share price

Volt Lines confirms Swvl breakup: Turkish mobility business Volt Lines’ management team is back in the driver’s seat after taking back control of the company from Swvl, it confirmed in a press release (pdf) on Thursday. The two sides agreed to terminate the USD 65 mn acquisition in December and go their separate ways less than a year after announcing the merger, the statement said. Swvl announced the unwinding in a filing earlier this month. Company representatives were not immediately available for a comment when Enterprise reached out yesterday.

It was a good eight-month run: The short duration of the acquisition saw the Turkish mobility company more than double its revenues and turn profitable, which will help it exercise its plans to expand overseas this year. “During our time with Swvl we had the chance to focus on the fundamentals which helped transform the Volt Lines business and thus more than double its value since the acquisition,” Volt Lines founder and CEO Ali Halabi said in the release. “Swvl and Volt Lines benefited a lot from each other, however the macro-economic climate made it very difficult for the [transaction] to conclude.”

It’s shaping up to be a tough year for Swvl: The company is facing delisting warnings from the Nasdaq after seeing its share price collapse as much as 98% since its IPO last April. The company has slashed more than half of its workforce, cut back on routes, and exited Pakistan in a bid to rein in costs

Reverse stock split has propped up its share price: Swvl’s share price jumped to USD 4.14 during trading on Thursday after the company announced a 1-for-25 reverse stock split following a second delisting warning, before falling back to close the week at USD 3.18. The “reverse share split will allow the company to regain compliance with the Nasdaq USD 1.00 minimum bid price requirement,” the company said in a statement announcing the move on Wednesday.

SOUND SMART- Reverse stock splits reduce the number of shares in circulation, boosting the share price. Swvl’s 1-for-25 reverse split merged 25 ordinary shares into a single share. The company has received warnings from Nasdaq to both bring its share price up above USD 1.00 for 10 consecutive days by 1 May 2023 and to raise its market cap above USD 50 mn by July, or face delisting.


Industrial investors to get 6-month grace period from late delivery penalties

Gov’t to give industrial investors some breathing room: The Madbouly cabinet approved giving the Industrial Development Authority (IDA) the power to cancel or discount penalties to industrial players that fail to deliver projects on time, it said in a statement following its weekly meeting. Projects delayed on the back of the pandemic will be given an additional 4.5 months before being being hit with penalties, while a six-month grace period will be applied to those that miss deadlines due to current economic challenges. Meanwhile, companies working on larger projects exceeding 50k square meters will be able to deliver them in stages providing they complete them within five years of receiving the land.

This is the latest in a list of measures designed to support the industrial sector in response to the economic crisis triggered by the war in Ukraine. The Madbouly cabinet announced in the wake of the latest currency devaluation earlier this month that it would continue offering subsidized loans at a slightly higher 11% rate to support companies in the industrial and agriculture sectors. It has also recently made it easier for firms to acquire on-stop golden licenses for new industrial and infrastructure projects.

Real estate players want similar treatment: Real estate developers recently called on the government to extend their deadlines by up to 12 months and waive late delivery fines to help them weather the current bout of inflation and exchange rate volatility.

Industry reps meet with Madbouly, Samir: Prime Minister Moustafa Madbouly and Trade and Industry Minister Ahmed Samir discusses industrial development last week with representatives of manufacturers, according to a cabinet statement. The two sides discussed accelerating the payment of export subsidies and the rollout of the new subsidized loans initiative to replace a program previously funded and administered by the Central Bank of Egypt, the statement said.

Samir talks localization with World Bank officials: Samir met with World Bank officials to discuss the ministry’s efforts to localize industrial production and boost exports, especially to African countries, according to a ministry statement. The government is aiming to increase exports to USD 100 bn a year by the middle of the decade, up from USD 43.9 bn in FY 2021-2022. The government has launched a national initiative to help accelerate the localization of industrial production and lower the country’s reliance on imported goods.


CIRA sees higher revenues in 1Q 2022-2023 but rising rates hit net income

CIRA Education reports higher revenues, lower bottomline in 1Q 2022-2023: EGX-listed education services provider CIRA Education reported EGP 104.7 mn in adjusted net income in 1Q 2022-2023, down 3% y-o-y, according to the company’s earnings release (pdf). Revenues, meanwhile, jumped 25% to EGP 536.1 mn on rising student enrollment rates. It reported double-digit growth of enrollment at its two universities and 6% across its 25 K-12 schools. The company’s fiscal year begins on September 1, in line with the academic year.

Enrollment growth was boosted by new academic institutions: CIRA Education opened the Futures Language School in Qena in September and officially launched BUA with 7 new faculties. As a result, overall student capacity grew 36% y-o-y at its higher education institutions and 3% at its schools in 1Q 2022-2023.

Costs were driven up by depreciation + higher borrowing costs: High levels of depreciation were spurred by new and ongoing projects, particularly BUA, the release says. Rising interest rates, meanwhile, caused net interest expenses to more than double from a year earlier.

CIRA Education on weathering the economic storm: “Our growing margins amid significant inflationary and currency pressures is attributed to a greater level of economies of scale, which enabled us to absorb double-digit growth in costs during the same period,” said CEO Mohamed El Kalla.



Imports and India were the big business stories on last night’s talk shows. Prime Minister Moustafa Madbouly announced that the imports backlog at ports has been cleared, and President Abdel Fattah El Sisi’s tour to India, Azerbaijan, and today Armenia got top billing from the talking heads. S&P Global’s affirmation of our credit rating and Reuters’ optimistic poll on economic growth (we have more on both above in the newswell, under Economy) also got coverage. (Ala Mas’ouleety, watch, runtime: 5:28 | Masa’a DMC, watch, runtime: 5:24)

The backlog of imported goods at our ports has been cleared, Prime Minister Moustafa Madbouly told reporters yesterday (watch, runtime: 9:25). “We’re back to levels before February [2022] … before the crisis began. Average goods at ports nationwide amount to the traditional average [in the] days and months before the crisis,” Madbouly said. Factories nationwide are now operating at full capacity and have reserves of raw materials sufficient for one to two months, Madbouly added.

The end of the backlog should herald a gradual decline in prices, Cabinet Spokesperson Nader Saad said in a phone call to Masaa DMC (watch, runtime: 4:50.) The PM’s statements on the end of the backlog also got coverage from Ala Mas’ouleety (watch, runtime: 6:37).

President Abdel Fattah El Sisi yesterday landed in Armenia, making him the first Egyptian leader to visit the country since its independence from the Soviet Union. El Sisi arrived in the capital Yerevan following visits to India and Azerbaijan (more on that in our Diplomacy section, above.) The trip got coverage from Ala Ma’ouleety (watch, runtime: 12:48), Masa’a DMC (watch, runtime: 6:01), Kelma Akhira (watch, runtime: 1:25), and Al Hayah Al Youm (watch, runtime: 1:46.)


Archaeologists discover oldest mummy yet

Archaeological mission uncovers our oldest mummy yet: A number of tombs dating back to the fifth and sixth dynasties were uncovered by the Supreme Council of Antiquities’ excavation team working in Saqqara, the Tourism Ministry said over the weekend. Among the discoveries was a mummy dating back over 4k years, which could be the oldest and most complete mummy ever found in Egypt, according to Zahi Hawass, dig director and former antiquities minister. (AP | Reuters | BBC | CNN | USA Today | Business Insider)

This marks our second notable discovery in a handful of days: Egyptian archaeologists last week discovered a “complete city from the Roman era” in the city of Luxor. CNN had the news.


EgyptAir not for sale + small-scale solar projects get a break


EgyptAir isn’t up for sale: The government has no plans to sell the national flag carrier, the cabinet said in a statement in response to rumors circulating on social media and some media outlets last week.


More solar producers exempted from integration fees: The Egyptian Electric Utility and Consumer Protection Regulatory Agency (Egyptera) will exempt solar projects producing up to 10 MW of power from paying integration fees, raising the ceiling from 500 KW, Al Mal reported.

BACKGROUND- Integration fees? Last year Egyptera introduced integration fees on solar plants producing more than 500 KW of power to help cover the costs of connecting them to the national grid.

AND- Egypt to help develop Jordanian natgas infrastructure: The state-owned Jordanian Egyptian Fajr Natural Gas Company signed an agreement last week with the Aqaba Development Company (ADC) to build and operate a linking point and a station for the transport and supply of natural gas to the Quweira industrial zone in Jordan, ADC and the Egyptian Oil Ministry said in separate statements last week.


The Central Bank of Egypt offered three-year treasury bonds with variable interest rates for the first time on Tuesday, according to data published on the central bank’s website. The bonds will pay out interest quarterly at a rate 4.25% higher than the central bank’s corridor rate. The Finance Ministry agreed to double the size of the auction to more than EGP 2 bn after it was almost 6x oversubscribed.


New Saudi visas are causing headaches for truckers: Truckers carrying goods into Saudi Arabia have faced disruption in recent days after Saudi authorities changed visa rules, Al Mal reports. Visas now only allow holders to enter once in a three-month period, forcing drivers to wait for weeks before being able to re-enter the country and preventing them traveling on to Jordan and other countries in the Gulf. Egyptian officials are planning to discuss restoring the original visa rules with Saudi authorities next week, the newspaper reports, citing government sources.


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Are the 2020s set to be the decade of emerging markets? Morgan Stanley Investment Management last week said it is pulling money out of the US stock market and putting it into equities in developing economies. “Every decade, there is a new leader in the market. In the 2010s, it was US stocks and mega-cap tech … Leaders of this decade can clearly be emerging-market and international stocks,” the fund’s deputy CIO and head of EM macro research, Jitania Kandhari, told Bloomberg.

EM have certainly gotten off to a good start this year: EM stocks and bonds are seeing near-record inflows as investor optimism returns on the back of falling inflation and China reopening following three years of covid lockdowns, according to the Financial Times. Emerging equity and debt markets saw USD 1.1 bn of inflows a day last week, driven by Chinese inflows of around USD 800 mn, exceeding two-decade peaks.

EM have outperformed developed markets so far this year: The MSCI gauge of EM stocks has surged 8.6% in this month compared to US stocks rising 4.7%, according to Bloomberg. Estimates by the news outlet have emerging economies growing 4.1% this year and 4.4% in 2024, compared to 0.5% and 1.2% in the US. Meanwhile, JPMorgan is forecasting EM growth to be 1.4 percentage points higher than in developed markets, the FT says.

But: “The first and second quarters [of 2023] will see an uplift in China, there’s no doubt about that … but much of that is now priced in by markets . . . We may have seen the lion’s share of the rally in this cycle,” an EM bond fund manager told the salmon-colored paper.

Up EGX30 16,791 +2.1% (YTD: +15.0%)
None USD (CBE) Buy 29.86 Sell 29.94
None USD at CIB Buy 29.84 Sell 29.94
None Interest rates CBE 16.25% deposit 17.25% lending
Up Tadawul 10,822 +0.1% (YTD: +3.3%)
Down ADX 9,738 -2.6% (YTD: -4.6%)
Down DFM 3,329 -0.8% (YTD: -0.2%)
Up S&P 500 4,071 +0.3% (YTD: +6.0%)
Up FTSE 100 7,765 +0.1% (YTD: +4.2%)
Up Euro Stoxx 50 4,178 +0.1% (YTD: +10.1%)
Down Brent crude USD 86.66 -0.9%
Up Natural gas (Nymex) USD 2.85
Down Gold USD 1,945.60 -0.1%
Down BTC USD 23,009 -0.3% (YTD: +39.2%)


The EGX30 rose 2.1% at Wednesday’s close on turnover of EGP 2.55 bn (47.8% above the 90-day average). Egyptian investors were net sellers. The index is up 15.0% YTD.

In the green: Credit Agricole Egypt (+9.1%), Oriental Weavers (+6.5%) and Juhayna (+5.8%).

In the red: Eastern Company (-3.3%), e-Finance (-0.5%) and CIRA Education (-0.4%).


El Sisi talks investment, defense, food security with India’s Modi before heading to Azerbaijan

El Sisi in New Delhi: President Abdel Fattah El Sisi held wide-ranging talks with Indian Prime Minister Narendra Modi during his visit to India last week. The two leaders agreed to strengthen defense and security ties, work closer on health and food security, and deepen cooperation on science and tech, according to a joint statement following the talks. El Sisi also held talks with Indian Foreign Minister Subrahmanyam Jaishankar during his visit to New Delhi, which coincided with India’s Republic Day celebrations.

Indian economic zone incoming? No new investment or economic agreements have yet been announced out of the visit, though Modi pledged to encourage Indian companies to increase their involvement in Egypt and El Sisi said his government would consider establishing an economic zone for Indian firms in the Suez Canal Economic Zone. The two countries hope to increase the value of bilateral trade to USD 12 bn in the next five years, up from USD 7.3 bn in FY 2021-2022, according to the statement.

Talks with India’s biggest renewables player: El Sisi held talks with representatives from Indian renewable energy firm ReNew Power to discuss investments in renewable energy infrastructure. The company signed a framework agreement alongside Elsewedy Electric in November to construct a USD 8 bn green hydrogen plant that will produce 220k tons of hydrogen and 1.1 mn tons of ammonia a year.

Adani wants to invest: Gautam Adani, founder of Indian conglomerate Adani Group and Asia’s richest man, met with El Sisi to discuss investing in Egypt’s ports and airports, data centers, renewable energy projects and green hydrogen facilities, Ittihadiya said. Adani shares have come under pressure after a report by short seller HIndenburg Research, the Financial Times reports.

From New Delhi to Baku: El Sisi held talks with Azerbaijan’s president, Ilham Aliyev, in Baku yesterday and met with local business leaders, Ittihadiya said. Foreign Minister Sameh Shoukry and Planning Minister Hala El Said signed several MoUs on water security, trade and culture, according to the Azerbaijani presidency’s office.


Sudan says it is “aligned and in agreement” with Ethiopia on GERD

Sudan + Ethiopia align on GERD? Sudan and Ethiopia are “aligned and in agreement” over Addis Ababa’s Grand Ethiopian Renaissance Dam (GERD), Sudan’s de facto leader Abdel Fattah Al Burhan said Friday following talks with Ethiopian Prime Minister Abiy Ahmed in Khartoum, according to a statement picked by AFP. “Burhan emphasized… that Sudan and Ethiopia are aligned and in agreement on all issues regarding the Grand Ethiopian Renaissance Dam (GERD),” according to the country’s ruling sovereignty council, which Al Burhan chairs.

The GERD has been a constant source of tension between Ethiopia and Egypt, which views the dam as a threat to its water security. Talks between the three countries have been on ice for over a year after Ethiopia unilaterally began filling the dam without an agreement over when the reservoir will be filled or how it will be operated. Egypt has repeatedly tried to get the UN Security Council to intervene in the dispute but global powers have insisted that the three countries must continue to negotiate a settlement under the current format, led by the African Union.



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

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

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

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.

31 January (Tuesday): EBRD + EU + GCF will lay out their strategic plans to boost green finance in Egypt.

31 January-1 February (Tuesday-Wednesday): Federal Reserve interest rate meeting.


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

1 February (Wednesday): OPEC will hold a joint ministerial monitoring committee meeting.

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

5 February (Sunday): The Senate reconvenes.

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.

21-22 March (Tuesday-Wednesday): Federal Reserve interest rate meeting.

23 March (Thursday): 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.

21 April (Friday): 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.

2-3 May (Tuesday-Wednesday): Federal Reserve interest rate meeting.

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.

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

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.

25-26 July (Tuesday-Wednesday): Federal Reserve interest rate meeting.

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.


19-20 September (Tuesday-Wednesday): Federal Reserve interest rate 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.

31 October – 1 November (Tuesday-Wednesday): Federal Reserve interest rate meeting.


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


12-13 December (Tuesday-Wednesday): Federal Reserve interest rate 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.

1Q 2023: The Madbouly government will choose which state-owned hotels will be merged into a new hotels company ahead of an offering to foreign and Gulf investors.

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