Monday, 13 February 2023

AM — State could offer strategics 20-30% of new company with hotel assets nationwide



Good morning, wonderful people, and a very happy Monday.

THE BIG STORY here at home this morning: Privatization is still getting top billing on news that the state could offer 20-30% of its new hotels company to strategic investors, while Public Enterprises Minister Mahmoud Esmat made an appearance at the House of Representatives to defend the liquidation of some failing public companies.

WATCH THIS SPACE- Following a quiet period after COP27, we now expect our hydrogen ambitions to return to center stage before Ramadan. The Madbouly government’s national hydrogen strategy is just about ready, two sources with first-hand knowledge of the process tell us. One source expects the government to release the highly anticipated strategy between the end of this month and early next, while another says it should wrap up some time in March.

REFRESHER- The strategy is a key milestone for developers who have signaled interest in the Sisi administration’s world-scale hydrogen program, which would demand the investment of some USD 40 bn in renewable energy alone to generate the 40 GW of power needed if every project now on the drawing board makes it to implementation. The state has inked framework agreements worth c. USD 85 bn for green hydrogen and ammonia plants.

THE BIG STORY ABROAD- All eyes are on the sky this morning after US fighter jets shot down another flying object over North American airspace. The international press is trying to figure out what the latest objects were (spoiler alert: probably not spaceships) and what the apparent sudden proliferation of UFOs — the first of which was a suspected Chinese spy balloon —- means for tensions between China and the US. The shootdown is the fourth in the past week. (WSJ | Financial Times | Bloomberg | New York Times | Reuters.)

It’s a big night / morning for the “other” football: The US football Super Bowl was ongoing as we got ready to hit “send” on this morning’s issue, with the Philadelphia Eagles leading Kansas City Chiefs 27-21 at the end of the third quarter.


SMART POLICY- Officials are on a three-front push this week to drum up strategic and portfolio investment from the Gulf:

The UAE and Saudi Arabia leg of the EGX roadshow kicks off today, Al Mal reports citing sources it says are in the know. Representatives of the bourse, the Financial Regulatory Authority and the central bank are visiting the two countries to drum up interest as the state gears up for a number of potential IPOs this year under its privatization program. EGX head Rami El Dokany will meet with unnamed foreign funds in Saudi Arabia, Dubai, and Abu Dhabi, and discuss potential dual listings on the EGX with unnamed Saudi and Emirati companies, according to Al Mal. The roadshow, which is being managed with the help of Al Ahly Pharos, kicked off in October.

President Abdel Fattah El Sisi yesterday landed in Abu Dhabi, where he held bilateral talks with UAE President Sheikh Mohammed bin Zayed Al Nahyan ahead of attending the World Government Summit in Dubai. Meanwhile, Planning Minister Hala El Said is leading a business delegation to several Gulf countries along with Sovereign Fund of Egypt (SFE) head Ayman Soliman to drum up interest in the state offering program.


The Egypt Petroleum Show (EGYPS) kicked off yesterday and continues through Wednesday. Here are the highlights from day one:

Three oil tenders in 2023: The state is planning to offer three international gas and oil exploration tenders this year, Oil Minister Tarek El Molla said during his opening statement on the first day of the three-day Egypt Petroleum Show (EGYPS), (watch, runtime: 7:43.) The ministry kicked off an international oil and gas tender for 12 exploration blocks in the Mediterranean and Nile Delta at the end of last year as it works to boost output for export.

Ramping up exploration: “An ambitious plan has been developed with international partners until 2025 to drill over 300 exploration wells,” El Molla added.

El Molla sat down with his Israeli counterpart Israel Katz to discuss joint efforts to boost gas exports to Europe, marking Katz’ first visit to Egypt, according to a statement from the Oil Ministry. El Molla praised the potential of the US-brokered maritime demarcation between Israel and Lebanon to open up more gas discoveries in the region. The pair also discussed Chevron’s role in boosting output from both countries.

REMEMBER- El Molla and Katz are scheduled for a meeting with EU Energy Commissioner Kadri Simson on advancing an agreement to increase gas exports to Europe signed in June between Egypt, Israel and the EU

DATA POINT- Oil demand is set to surpass pre-pandemic levels this year to reach 102 mn barrels a day, Reuters reports, citing a speech by OPEC Secretary General Haitham Al Ghais during EGYPS yesterday. Al Ghais said demand is forecast to grow further to 110 mn barrels per day by 2025.

^^ EGYPS also made Last Night’s Talk Shows (below).


MPs are back at it today. Their comparatively workaday agenda includes:

  • A vote on a draft tourism bill that would strip the power to form and regulate tourism chambers from the tourism minister and place it in the hands of the Egyptian Tourism Federation (ETF). MPs yesterday greenlit some 60 articles of the bill, which they approved in principle last month;
  • Debate and a vote on a bill that will allow the oil minister to contract two companies — state-owned EGAS and Cheiron Energy — to explore for oil and gas west of the Burullus offshore gas field in the Mediterranean;
  • Beware, book pirates: The Legislative and Constitutional Affairs Committee will discuss amendments to the 2002 law regulating intellectual property rights to crackdown on book piracy.

AND TOMORROW- Youth and Sports Minister Ashraf Sobhy will be in the hot seat to answer questions from MPs on youth centers, sporting clubs, stadiums and Egypt’s preparations for the Paris 2024 Olympic and Paralympic Games. The ministry is preparing a study aimed at boosting the sports sector’s contribution to the GDP, Sobhy told Asharq Business in an interview yesterday (watch, runtime: 2:40.)

MEANWHILE- No longer OOO: “Holiday is over, back to work,” dairy giant Juhayna’s Seif Thabet wrote on his Linkedin page over the weekend. The post was accompanied by shots of Seif with Juhayna employees.

Missed this week’s Inside Industry? In our weekly vertical exploring all things industry and manufacturing, we looked at how the government’s plans to set indicative pricing for strategic commodities could impact manufacturers.



We’re excited to unveil our next C-level event: The Enterprise Exports & FDI 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.


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: EGX-listed education stocks are living up to their defensive reputation.


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The state’s new hotel company is ready to go to market — but is a 30% stake enough?

A new state-owned company that will own a portfolio of seven five-star properties nationwide could offer as much as 20-30% of its shares to private investors as part of the Madbouly government’s privatization program, Hapi Journal reports. The seven hotels are now owned by the state’s Holding Company for Tourism and Hotels (HOTAC) and are being transferred to a newly established holding company, HOTAC chief Adel Wali told the newspaper. The Sovereign Fund of Egypt is managing the transaction.

Two names confirmed: The seven hotels on offer include the Cairo Marriott Hotel in Zamalek and Marriott Mena House next to the pyramids complex, Wali is quoted as saying.

Other potential candidates: The other five names haven’t yet been confirmed, but former public enterprises minister Hisham Tawfik last year reportedly said Aswan’s Sofitel Legend Old Cataract and the Steigenberger Cecil Hotel in Alexandria would be included alongside the two Marriott hotels. All four locations are owned by HOTAC.

Who’s buying? A government source told Enterprise in January that most of the interest was coming from Gulf funds, adding that the government was reevaluating which hotels to include in the sale following the latest devaluation of the EGP. Saudi Arabia’s Public Investment Fund (PIF) has been named as one of the most eager potential investors.

WATCH THIS SPACE- Will strategic investors (foreign or domestic) have appetite for minority stakes? Most strategic investors have strong preferences for majority stakes (to ensure they can full consolidate the results of their new investment) with clear management control (to make sure they can drive performance improvements). This theme will run throughout the privatization program — doubly so when we’re talking about well-managed, well-governed companies that aren’t already listed on the EGX.

REFRESHER- PM Moustafa Madbouly last week unveiled the government’s plan to sell stakes in 32 state-owned companies — including unnamed hotels — through sales to strategic investors and offerings on the EGX. The plan runs from the current quarter through to the end of 1Q 2024, with at least 25% of the share sales — or eight transactions, for those of you keeping track at home — set to come within the first six months. The government first announced last year that it would merge seven or eight state-owned hotels into a single entity to be offered up as part of the privatization plans.


MPs still balk at the liquidation of state-owned ZombieCos

Public Enterprises Minister defends privatization plans + more overpopulation talk in the House: Public Enterprises Minister Mahmoud Esmat was in the hot seat in the House of Representatives yesterday, defending the liquidation of some unprofitable publicly owned companies — a long-running point of contention between the government and some opposition MPs. The House Health Committee also met to discuss the country’s rising population.

State-owned companies need private money to turn them around, MPs said. “The problem with public enterprise companies is that they need huge investments to get out of their chronic financial, technical and management problems,” Esmat said. Many state-owned companies are overstaffed, have dilapidated machinery, high debt levels, and lack of working capital, he said. Public firms in the pharma, automotive, fertilizers, and petrochem industries need “huge investments … to be upgraded and streamlined,” a problem that the new state ownership policy attempts to address by attracting fresh investment from the private sector, he said.

MPs point to two cases where they think fresh investment will make a difference: El Mahalla Spinning and Weaving Company will hit its full production capacity in the second half of 2023 after some EUR 540 mn was invested to upgrade its operations. “We are also working hard to put the Talkha fertilizers company in operation after a two-year suspension and in partnership with the private sector,” Esmat said.

OUR QUESTION- What do you do with chronic lossmakers in which no private investor will ever take a stake?

Most MPs are fine with partial privatization — but some still can’t stomach liquidation of loss-making state firms: There is “agreement among MPs” that the ministry should stop closing and liquidating state-owned firms, said Rep. Moataz Mahmoud, who heads the House Industrial committee. “We support that these companies reach partnerships with the private sector as a new policy for upgrading performance and injecting investments,” he said. “But at the same time we reject the ministry resorting to the option of liquidating or closing any of the affiliated companies.”

OUR TAKE- If it cannot find a willing private-sector buyer, the Madbouly government needs to hold the line and close down moribund companies that continually deliver losses. Yes, that will mean the loss of jobs — but reskilling programs for those unable to find new work are a vastly better investment of public funds than Nasserist corporate welfare.

Some opposition MPs have long signaled dissatisfaction with the Public Enterprise Ministry for liquidating loss-making companies. They were hoping for a change of heart on the liquidation of financially moribund El Nasr Coke and Chemicals after Mahmoud Esmat last August took the reins of the ministry from Hisham Tawfik, who had been repeatedly criticized over his stance on privatization and liquidation as he worked to streamline the ministry’s portfolio.

MEANWHILE- MPs also called for more clarity on the state ownership policy, which lays out the government’s privatization roadmap.


Legislation is not the solution to overpopulation: It would be “quite difficult” to pass laws in Egypt aimed at curbing population as seen in countries including China, Singapore and Vietnam, National Population Council head Tarek Tawfik told the House Health Committee yesterday. Our population is expected to reach 157 mn people in 2050 and 205 mn by 2100, he added.

REMEMBER- The government is reportedly looking at introducing incentives for families who commit to having no more than two children in a bid to control a population surge. Egypt’s population has now surpassed 104.4 mn, increasing by 1.6 mn in 2022 alone, according to data by official statistics agency CAPMAS.

FAST FACT- We’re one among the eight nations that will deliver more than half of world’s projected increase in population through 2050, according to UN forecasts released last year.


Moody’s downgrades five banks’ deposit ratings on sovereign credit risk

Moody’s has downgraded the long-term deposit ratings of five Egyptian banks on the back of its downgrade last week of the country’s sovereign credit rating. The National Bank of Egypt (NBE), Banque Misr, Banque du Caire (BdC) and CIB have all seen their ratings downgraded to B3 from B2, the ratings agency said, while the Bank of Alexandria’s (Alexbank) rating moves to B2 from B1. The baseline credit rating on all five banks was downgraded to B3 from B2. The agency’s outlook on the banks’ deposit ratings was changed to stable from negative.

Why these banks? The sovereign overhang: The agency said the downgrade was the result of last week’s downward adjustment to the country’s credit rating, citing the “high interlinkages between [Egypt’s] weakened creditworthiness and the banks’ balance sheets.” All five banks have high exposure to sovereign debt, ranging between 25%-43% of their total assets — meaning that their standalone credit profiles and ratings are “effectively constrained by the rating of the government,” Moody’s said. Alexbank’s rating remains a notch above the other four banks thanks to support from Italian bank Intesa Sanpaolo, which owns an 80% stake in the bank.

A “weakened operating environment” is also at play: Moody’s predicts that the banks’ performance will come under pressure as “the combination of foreign currency liquidity pressures, high interest rates and inflation will dampen consumer confidence, compromising borrowers' repayment capacity and increasing funding costs for the banks.”

IN CONTEXT- Moody’s last week downgraded Egypt’s credit rating for the first time since 2013 to B3 from B2, due to “reduced external buffers and shock absorption capacity” amid the FX crunch. The agency also changed its outlook to stable from negative.

REMEMBER- BdC is this year set to finally go ahead with its long-awaited IPO, which has been repeatedly delayed for years due to poor market conditions, under the state’s privatization program. Alexbank, in which the state owns the remaining 20% stake not held by Intesa Sanpaolo, was earlier this year said to be part of the Madbouly government’s sale program, but did not appear on the final list of companies included in the rebooted program.


Raya’s Aman Financial Services issues EGP 400 mn in securitized bonds

Aman taps securitized market: Raya Holding’s non-banking financial services outfit Aman Financial Services issued EGP 403 mn in securitized bonds, kicking off an EGP 5 bn securitization program, it said in a statement to the EGX (pdf).

About the issuance: The issuance came in three tranches with tenors of 13, 36, and 56 months and ratings of Prime 1, AA, and A from Middle East Rating Services (MERIS). It was made by Raya’s securitization arm on behalf of Aman Financial Services and will help finance the company’s expansion plans in the first half of the year, Raya Holdings Chief Investment Officer Ahmed Nour Eldin confirmed to Enterprise last week.

Advisors: CI Capital acted as financial advisor and issuance arranger while CIB and the National Bank of Egypt were underwriters. Dreny and Partners acted as legal advisor and UHY Egypt acted as auditor.

The securitization market is picking up as 2023 progresses: Nearly EGP 5.8 bn worth of bonds have been sold so far in 2023, according to data tracked by Enterprise. Among other firms planning issuances for this quarter are EFG Hermes’ ValU and Contact Financial Holding. Companies raised EGP 45.4 bn from securitized bond issuances in 2022, almost three times the EGP 15.8 bn sold the year prior.


CIB net income up 17% in 4Q 2022

CIB’s net income rose 17% y–o-y to EGP 3.95 bn in 4Q 2022, according to its latest earnings release (pdf). The bank recorded revenues of nearly EGP 9.8 bn, up 41% on the same period last year.

Full-year results: The EGX bellwether saw net income rise 21% y-o-y to EGP 16.1 bn in FY 2022. Revenues were up 23% y-o-y to EGP 32.9 bn, backed by a comparable rise in net interest income. The bank’s loan portfolio grew by more than a third over the course of 2022 to reach EGP 222 bn. Deposits were also up by almost a third y-o-y to EGP 530 bn, led by an 18% rise in local currency deposits. Both CIB’s loan and deposit portfolios were significantly boosted by the impact of the EGP devaluation on the bank’s balance as expressed in local currency, it said.

What they said: “Ending a year packed with extraordinary global and local challenges, CIB achieved another milestone in 2022, delivering record financial performance, while maintaining pioneer solvency. This came as management wittingly capitalized on the bank’s solid grounding and agile balance sheet structure, which came in largely accommodating for the unforeseen dynamics on most fronts,” the release reads.



The aftermath of the deadly twin earthquakes that struck Turkey and Syria continued to lead coverage on the talks shows yesterday, one week after the disaster struck. Kelma Akhira spoke with Tawfik Hasaba, head of the Syrian ambulance service, who said search and rescue efforts continue in the hope of finding more survivors under the rubble (watch, runtime: 7:14.)

Some 235 shelters have been set up in Aleppo to accommodate 13k families, Hasaba said. Masa’a DMC also took note of the rising death toll on the back of the massive quakes (watch, runtime: 5:24).

More than 34k people are now confirmed to have died in the quake across Turkey and Syria, with most of the fatalities in Turkey, CNN reports.

The Egypt Petroleum Show (EGYPS) also got coverage, with attention focused on televised statements from President Abdel Fattah El Sisi on how discoveries by East Mediterranean Gas Forum (EMGF) countries can help alleviate the gas crunch in Europe. “More discoveries in Lebanon or Israel or Egypt or others would help reduce pressure [over gas] on the back of the Russian-Ukrainian crisis,” he said. Masa’a DMC and Al Hayah Al Youm noted the news (watch, runtime: 2:28 | watch, runtime: 1:25.) Ala Mas’ouleety took note of the three international gas and oil exploration tenders the Oil Ministry plans to run this year, per statements out of EGYPS from Oil Minister Tarek El Molla (watch, runtime: 6:47.)


The international press is taking a breather from coverage of the economy, serving up a mixed bag of stories in recent days that spans the gamut from archaeology to slice of life coverage.

Oldest tomb in Luxor opens to visitors: The Middle Kingdom tomb of Meru has been restored and is now open to the public, Reuters reports. The 4k-year-old tomb is the oldest site open to the public in Luxor's West Bank. The Supreme Council of Antiquities and the Polish Centre for Mediterranean Archaeology at the University of Warsaw jointly restored the tomb, according to a Tourism Ministry statement.

Also making headlines:

  • Egypt again turns peace mediator between Palestinians and Israelis: Egypt’s efforts last week to prevent escalating violence in the West Bank and Jerusalem are getting coverage. (Reuters)
  • The news that several content creators have been charged with terrorism offenses for making a viral comic video about a visit to a local jail is still getting a mention. (WSJ)
  • From football to food banks: A former football coach cooks daily meals for impoverished families in Helwan amid rising inflation. (The National)
  • Building collapse in Damanhour: At least six people died and 27 injured after the explosion of a cooking gas cylinder caused a building in Damanhour to collapse on Friday. (Associated Press)

ELSEWHERE- Al Monitor looks at adoption laws, Business Insider has a rundown on the liberties Hollywood has taken in depicting ancient Egypt, and Israeli forces made a big bust of drugs allegedly on their way to Egypt, The Times of Israel reports.


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Three international companies have their sights set on developing Metro Line 1: Germany’s Siemens and French firms Alstom and Colas submitted separate offers late last year in a government tender to develop Cairo’s oldest metro line, Al Mal reports, citing sources it says are in the know. Italian consulting and transport firm Italferr is reportedly helping the National Authority for Tunnels evaluate the bidders.

About the redevelopment: The three firms are bidding for a contract to develop the line’s signaling, communication and central control systems, electromechanical and electrical works, and track, at an expected cost of USD 400 mn. The Line 1 project is being part-funded by the EU, the European Investment Bank, the European Bank for Reconstruction and Development, and the French government. Alstom has already secured a contract to supply the line with 55 new trains.


Closer cooperation between the EGX + Saudi’s Tadawul: The EGX signed an MoU with Tawadul Group focused on product collaboration, data and knowledge transfer, specialized marketing initiatives for companies eyeing listing, investor education, and ESG standards, according to a press release by Tadawul.


Qatari Diar is building out City Gate: Qatari Diar subsidiary East Gate Developments and contractor Consolidated Contractors Company signed an agreement to construct a new EGP 1.75 bn phase of its City Gate development in East Cairo, according to a statement (pdf). The residential project will be valued at over USD 12 bn once complete, Qatari Diar CEO Abdullah bin Hamad Al-Attiyah said during the signing ceremony in Doha.

REMEMBER- Qatari Diar has until 2031 to finish City Gate per a new deadline reportedly set by the New Urban Communities Authority (NUCA) in November to compensate the company, after its work had been suspended for years amid a legal dispute. East Gate began work on the EGP 1 bn first phase of the project last year and has reportedly secured a EGP 2 bn loan from the National Bank of Egypt and Banque Misr to finance the second phase.


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Will other emerging markets follow Egypt, Pakistan and Lebanon on the devaluation trail? Analysts now see Argentina, Nigeria, Malawi, Ethiopia and Bangladesh at risk of seeing their currencies tumble on the back of unsustainable debt burdens and FX shortages, Bloomberg reports. “Additional devaluations in some of the fragile frontier markets are very likely,” said Wells Fargo strategist Brendan McKenna. “As external buffers get depleted, their ability to defend pegs diminishes. Investors with exposure to these markets should think about hedging against devaluation risks,” he added.

Devals bring upsides and downsides: While devaluation could help bring in fresh capital and help in trade competitiveness, it could also further fuel inflation and debt repayments, Bloomberg notes. Tellimer strategist Hasnain Malik says investors should be on the lookout for routs in countries at risk. “Currency devaluation makes a number of equity markets in the smaller emerging and frontier universe untouchable,” he said, namechecking Egypt, Argentina, Ghana, Lebanon, Nigeria, Pakistan, Sri Lanka and Zimbabwe.

AND- Rising public debt in MENA is concerning the IMF: Public debt in some countries in the MENA region is of “concern,” Reuters quotes IMF head Kristalina Georgieva as saying during the Dubai-hosted Arab Fiscal Forum. “Public debt is a concern, especially in countries that are oil importers and that is an issue we will continue to be working on,” she said, adding that MENA inflation was “far too high still.” She stressed that countries in the region need “robust” fiscal frameworks and more resilience to respond to shocks, noting the impact of the devastation caused by last week’s earthquakes on the Turkish economy..

FINALLY- PIF-backed Chinese fund to raise USD 1 bn: Riyadh-based eWTP Arabia Capital, a venture capital fund backed by Saudi Arabia’s Public Investment Fund (PIF) and China’s Alibaba Group, is close to raising USD 1 bn to back tech startups in Asia and the Middle East, Bloomberg reports. The fund made a USD 400 mn raise in 2019 and has invested in 16 firms, five of which it plans to take public in Riyadh or the US next year.




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The EGX30 fell 1.9% at yesterday’s close on turnover of EGP 1.8 bn (3.6% below the 90-day average). Foreign investors were net sellers. The index is up 18.4% YTD.

In the green: e-finance (+3.2%), Ezz Steel (+3.1%) and Elsewedy Electric (+2.2%).

In the red: CIB (-4.7%), Abu Dhabi Islamic Bank (-4.3%) and Mopco (-3.7%).

Asian shares were down in early trading today and futures suggest most of Europe will follow suit, as will Wall Street and Bay Street later today.


Arab League condemns Israeli violence in Jerusalem, West Bank: President Abdel Fattah El Sisi, Jordanian King Abdullah II, Palestinian President Mahmoud Abbas, and representatives of other member states in the Arab league met in Cairo yesterday for talks on the escalating violence in the Israel-Palestine conflict, according to an Ittihadiya statement. The leaders reiterated the need to halt “unilateral” Israeli measures that they said undermine the two-state solution and the chances of achieving a just and comprehensive peace.

Jerusalem is “the backbone of the Palestinian cause,” El Sisi said at the meeting, joining King Abdullah II and other members in calling for a halt to any Israeli measures to change the status of the city’s holy sites. Jordan acts as the custodian of the Al-Aqsa Mosque, the third-holiest site in Islam and a flashpoint for tensions in the conflict, which have risen in recent months following a series of provocative moves by Israel’s new far-right government. Egypt has met with regional leaders and Palestinian factions in recent weeks in efforts to broker a halt to the violence.


Education shares have been on a tear this academic year, underscoring the relatively uncommon nature of private-sector education stocks in Egypt. They’re defensive, sure: Their product is an essential good that people need regardless of broader economic performance, which would suggest they generally do better than other sectors in a downturn. But the sector is also one heck of a growth play in good times: About 45% of our population is 19 or younger, and population growth is still coming in at about 1.7% per year (having peaked at about 2.3% per year in 2014).

In our last look at education shares last September, we found they showed mixed performance throughout the year, with one education player massively underperforming against the wider market. For the purpose of this analysis, we’ll assess how education players’ stocks performed on a YTD basis and from the beginning of the first quarter of their academic year (which runs from September-November) until now.

Which EGX-listed education players are there to speak of? There are a small handful of education stocks listed on the EGX, including industry leader CIRA Education, which operates K-12 schools Mavericks and Futures, as well as Badr University. The only other EGX-listed education players are CIRA subsidiary, Cairo for Educational Services (CAED); the Suez Canal Company for Technology Settling (SCTS), which owns and operates the Sixth of October University, and Taaleem Management Services.

Education shares doing better than they did in the same period a year ago: Most EGX-listed companies have shown strong returns when looking at the six-month period beginning in 1Q 2022-2023. The weakest performer among them still cranked out a positive (albeit very minor) return during the period since September. On a YTD basis, the same trend generally holds: The majority of the companies are up since the beginning of the year, with the exception of one player that has remained flat.

THE BENCHMARK: The EGX30 has returned a whopping 76.8% since September and is up 18.4% so far in 2023. The bourse rallied following October’s devaluation, making it one of the world’s best-performing indexes (in local-currency terms). Since the October devaluation, the bourse has soared more than 52.5%.

CIRA Education’s shares have risen some 28.7% since September and are up 6.9% YTD. The leading private sector education player’s shares have risen from EGP 11.23 per share at the beginning of the academic year in September to EGP 13.90. Taaleem’s stock has inched up 5.5% YTD and is up some 41.1% since September. SCTS is the sector’s worst-performing stock on a year-to-date basis but the best performer since September. The company’s stock is down 17.4% since 1 January, but has rallied 42.6% since September, hitting EGP 60.61 per share. CAED, which is much more illiquid, has remained flat YTD and has inched up a meager 0.5% since September to EGP 15.58.

Despite broadly doing well, education stocks haven’t done as well as the broader market — but that’s a function of their defensive nature, Beltone Financial Vice President of Research Aly Adel told Enterprise. “Education shares are known as ‘low-beta’ — their defensive nature limits both the upside and the downside in comparison to the wider market,” he explained. “So if the broader market rises by 10%, the stock doesn’t necessarily have to go up by the same amount.” But that also means the downside risk is more contained — if the overall market falls 10%, these defensive stocks are unlikely to be as affected, Adel said.

As for their earnings:

  • CIRA Education saw its revenues rise 25% y-o-y to EGP 536.1 mn in 1Q 2022-2023, but saw its adjusted net income dip 3% y-o-y to EGP 104.7 mn.
  • SCTS’ net income rose 43.9% y-o-y to EGP 411 mn during the quarter, according to an EGX disclosure.
  • CAED saw its net income inch up 2.8% y-o-y in 1Q 2022-2023 to 9.2 mn, according to a disclosure to the bourse.
  • Taaleem reported a 34% y-o-y increase in revenues to EGP 230 mn, while net income rose 50% y-o-y to EGP 108 mn, according to its earnings release (pdf).

Even with the devaluation, education providers should be able to maintain their margins: The EGP has lost nearly half of its value against the greenback over the past year and is down almost 20% since the start of the year, while inflation came in at 25.8% y-o-y in January. However, the impact of inflation and the EGP devaluation should have already begun to show on the companies’ performance. Although schools are still broadly limited to a 7% annual increase in tuition fees, “this should be sufficient to offset increased costs for the current year and next to maintain normal margins,” Adel said. Salaries are typically the biggest bulk of any education player’s costs, so while expat salaries could present an increased cost burden, “this will likely have a minimal impact on margins” and will mostly be offset by tuition fees and higher classroom utilization, Adel said.

So, what does the future hold for education stocks? Education companies have been performing well, with strong bottomline and topline figures for the first quarter of their fiscal year, which means the rest of the year’s performance is easy to predict based on relatively fixed student numbers and tuition income, Adel said. For education players, their main asset is in this visibility — unless there are major structural changes, it is unlikely there will be any surprises in the stock story. “The biggest advantage in the education sector is that companies can easily maintain growth and margins as long as they maintain good quality of education, which will ensure good return on investment,” he said.

Your top education stories for the week:

  • Teacher recruitment spree: The Education Ministry is looking to hire 30k primary school assistant teachers for the first, second and third grades to start in the 2023-2024 academic year.
  • Public schools and universities are back in session: The second semester of the 2022-2023 academic year kicked off at the start of this week.



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

12 February (Sunday): The House reconvenes.

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

13-15 (Monday-Wednesday): World Government Summit, Dubai.

19 February (Sunday): Senate reconvenes.

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


March: 4Q2022 earnings season.

March: Gov’t to launch the National Governance Index.

3 March (Friday): Journalists’ Syndicate midterm elections.

5 March (Sunday) Nahda Economic Forum, Intercontinental Cairo Semiramis.

6-9 March (Monday-Thursday): EFG Hermes One-on-One conference, Atlantis, Dubai.

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.

16-18 May (Tuesday-Thursday): Egypt will host its first conference on cybersecurity and defense intelligence systems (CDIS-Egypt).

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

20-21 May (Saturday-Sunday): eGlob Expo, St. Regis Almasa Hotel, Cairo.

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


7-10 (Wednesday-Saturday): The second edition of Africa Health Excon.

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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