Good morning, friends, and HAPPY FRIDAY. We hope that you had a productive week and have plans in place to escape the weekend heat.

Do you have a Mozart in your midst? If you want to make sure, or would like your small humans to dabble with music, then we have the guide for you. As promised, we have a selection of venues all around Cairo for you to take your young ones to experience music, play an instrument or properly sing.

Enterprise Weekend comes out each Friday at 9:00am CLT. We’ll be back on Sunday at 6am with EnterpriseAM. Until then: Enjoy the weekend.

LAST WEEK IN 3 MINS-

Besides some material updates on the macroeconomic front, the two big themes of the news cycle this past week were M&A and energy.

BUT- Privatization also made an important appearance in the news, with a very encouraging development in the state privatization program.

PRIVATIZATION-

State-owned tobacco manufacturer Eastern Company is getting a new majority shareholder, after Emirati investment firm Global Investment Holding agreed to purchase a 30% stake in the company as part of the government’s privatization efforts. The transaction will see Global Investment Holding acquire the shares for USD 625 mn, and will help secure USD 150 mn to help Eastern purchase manufacturing inputs. The agreement comes after Eastern’s parent company, the Chemical Industries Holding Company, had last month said it would only be willing to part with 15.3% of the company under the state’s asset sale program.

ALSO FROM THE PRIVATIZATION WORLD- State-owned Banque du Caire is reportedly looking to bring on a strategic investor and is looking to finalize an agreement sometime during 2024, Banque Misr chief Mohamed El Etreby said. However, it remains unclear what the transaction would mean for the bank’s long-awaited IPO.

ECONOMY-

What’s happening with our IMF review? It remains unclear whether we’re on track for IMF officials to come into town in a week’s time for their review of our USD 3 bn loan program, with a Finance Ministry official confirming to us that the Fund has yet to confirm a date for the visit, which is scheduled for 15 September. The first review was originally supposed to take place in mid-March but was postponed after we fell short on meeting several key conditions of the loan agreement.

Meanwhile, the contraction in Egypt’s non-oil private sector stabilized in August, with the monthly purchasing managers’ index reading coming in at the same level as July’s reading, suggesting some level of stabilization in economic conditions. Although August’s PMI reading was the highest level since August 2021, it also marked the 33rd consecutive month that business activity has been in decline.

PLUS- Egypt’s net foreign liabilities narrowed by USD 800 mn in July, driven by a slight easing in FX liquidity in the banking sector. The country’s net foreign asset position improved to negative USD 26.3 bn from negative USD 27.1 bn in June.

AND THEN THERE WAS QUITE A BIT OF ENERGY NEWS-

Israel, Cyprus, and Greece are about to make big decisions about the future of East Med gas, with the three countries agreeing to form a deeper energy partnership to export Israeli gas to Europe and connect their energy grids, amid new momentum to set up a gas pipeline connecting Israel and Europe.

This comes as one energy giant doubles down on Egypt, while another exits stage left: Italian energy giant Eni and its partners will invest USD 7.7 bn in their Egypt operations over the next four years, marking a massive step up in its spend on exploration. Meanwhile, London-based, Egypt-focused SDX Energy inked a heads of terms — a non-binding letter of intent — to sell its entire Egypt portfolio to an unnamed “large multinational operator,” as the company looks to focus more on its operations in Morocco.

ZOOMING OUT- The government purchased fresh hedging contracts covering 35% of its estimated oil imports for the current fiscal year that ends in June 2024, as the oil market has jumped more than 20% since the start of the fiscal year. The contract locks in crude purchases at around USD 75-80 / bbl. Egypt’s FY 2023-24 budget penciled in a USD 85 / bbl price for crude, and expects the country to import around 100 mn bbl this year.

PLUS SOME M&A-

Sanlam and Allianz move forward with their pan-African merger: South African non-banking financial services firm Sanlam and global ins. provider Allianz have received regulatory approvals to merge the bulk of their African operations, creating the largest pan-African non-banking financial services business on the continent. The companies first revealed the merger plans in May 2022.

Beltone’s Cash acquisition is nearing completion: Beltone Financial Holding inked a share purchase agreement to acquire 100% of Minya-based microfinance provider Cash after completing due diligence on the company. Beltone is waiting on the approval of the Financial Regulatory Authority before finalizing the acquisition

Another supermarket chain in distress: Awlad Ragab plans to liquidate EGP 850 mn-worth of assets by the end of 2023 to avoid default, with eight branches, a factory, and a warehouse all on the liquidation docket as the supermarket chain looks to repay part of its dues to banks, leasing companies, and suppliers. The indebted supermarket chain has been looking to restructure since January, when owner Mahmoud Ragab revealed that the company has accumulated over EGP 2.2 bn in outstanding debt. This comes a few months after supermarket chain Alfa Market began closing branches to sell off assets and repay debts.

FOLLOWED BY A SMATTERING OF INVESTMENT + DEBT-

#1- BUE gets a big FDI ticket: Pan-African private equity firm AfricInvest is investing USD 40 mn (EGP 1.2 bn) in the British University in Egypt through a capital increase, marking “one of Egypt’s largest foreign direct investments in education to date.” The founding Khamis family will remain the majority shareholder of the university.

#2- Our second ADEX loan in a month: Abu Dhabi Exports Office (ADEX) — the export finance arm of the Abu Dhabi Fund for Development — is set to extend a USD 100 mn revolving loan to the National Bank of Egypt (NBE) to fund imports from the UAE. The financing agreement seeks to boost Emirati exports to Egypt.

#3- Yanmu Logistics Park — a joint venture between HAU Logistics and Kuwait-based global supply chain and infrastructure player Agility — lined up a EGP 1.5 bn, 10-year loan from CIB to help fund its first logistics park east of Cairo. Yanmu will build logistics parks and warehouses across Egypt.

WHAT’S HAPPENING NEXT WEEK-

We’re set to start off the week with Capmas and the Central Bank of Egypt publishing inflation data for August on Sunday. Annual inflation has been accelerating for the past several months, hitting an all-time high of 36.5% y-o-y in July.

PSA- The deadline for Egyptian men to settle outstanding military service in FX is set for next Wednesday, 13 September. The Foreign Ministry provided a WhatsApp number (+20 12 7563 8989) and email (info@tagneedinit.gov.eg) for enquiries. More details here.

AND- We’ll be keeping our eyes peeled on any updates on the IMF’s pending review of our USD 3 bn loan program. We recap the latest in Last Week in Three Minutes, above.

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

YOUR MOST CLICKED LINKS-

  • Our take on the 2024 budget conversation with your boss, clients, CFO, CEO or Board was a hilarious hit. (YouTube)
  • Published progress reports on the state ownership policy and IPO program from the Cabinet’s Information and Decision Support Center (IDSC) were eagerly read. (IDSC report)
  • It seems that our readers have a sweet tooth for Fou. (Fou by Farah’s website)
  • Philip Morris involvement in Global Investments Holding as indirect shareholders got some attention. (DIFC website)
  • More details about the progress reports, state ownership policy and IPO program pulled in readers. (I DSC report)

AROUND THE WORLD IN SEVEN DAYS-

Antony Blinken, Biden’s secretary of state, is rallying the troops in Ukraine. He shared that a new installment of US war assistance valued at USD 1 bn will be on its way along with support for the nation’s air defenses.

Surging oil prices were a focus as pledges by Saudi Arabia and Russia made on Tuesday to maintain supply cuts sent prices soaring.

We lost Mohamed Al Fayed early last week , the former owner of Harrods and the Ritz Carlton in Paris. The b’naire is listed by Forbes as the fourth-richest Egyptian with a net worth of more than USD 2 bn.

☀️ THE WEATHER THIS WEEKEND- Yep, summer definitely isn’t over: Stay cool and hydrated today — and don’t skimp on sunscreen — because we’re in for a daytime high of 42°C before the evening brings us a more tolerable 25°C nighttime low. The mercury will drop a few degrees tomorrow, peaking at 38°C during the day and falling to 25°C at night.

HAPPENING THIS WEEKEND-

There are a couple of days left of Animatex, which wraps up tomorrow at AUC Tahrir Cultural Center.

The Elite Stand Up Comedy show is also happening tomorrow at The Marquee, Cairo Festival City.

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