Good morning, friends. The big stories this morning reflect the twin narratives of 2023. On the one hand: The Institute of International Finance is out with a paper suggesting that it’s high time we move to a flexible exchange rate. On the other, we have signs that investment is picking up: There is more Chinese interest in opening up shop here — and word that an Emirati developer has pulled the trigger on a development in New Cairo with an investment cost of more than USD 1 bn.

Those narratives mesh nicely with one of the big themes of a briefing call we had yesterday ahead of next week’s Enterprise Finance Forum. Two Egyptian leaders at large international businesses made a strong case for optimism about Omm El Donia as they described how their companies are now deploying more money and more people here. Why? We have plenty of talented people, a great geographical location, and a massive domestic market.

Yeah, but haven’t those been our selling points forever? They have indeed.

So, what’s different? Even at the official rate, Egypt has become very attractively priced. “More cost competitive than India,” one said yesterday — and it’s far from the first time we’ve heard that.

Want to hear their argument in detail? You’ll have to attend the opening session of day two of our Enterprise Finance Forum, which takes place next Monday and Tuesday. (Details below, if you’ve not already accepted your invitation or asked to receive one.)

WATCH THIS SPACE-

China is looking to expand its presence in Egypt in a big way: Some 10-15 Chinese companies have shown interest in establishing a specialized industrial zone for chemicals with investments worth USD 7.5-12 bn in CNY across the next 3-4 years, General Authority For Investment (GAFI) CEO Hossam Heiba told Al M al TV in an interview on Sunday (watch, runtime: 48:50).

TEDA 3x? Tianjin Economic-Technological Development Area, which established the TEDA industrial zone in Ain Sokhna in 2008, wants to acquire a land plot 3x the size of the current zone, Heiba added. TEDA Egypt is currently working on the second 6 square-km phase of the TEDA zone, which will expand its total size to 7.3 sq-km.

Chinese currency for Chinese investments: Authorities could allow Chinese companies to make local investments in CNY, according to Heiba, who told Al Mal that there is agreement between the GAFI and the Central Bank of Egypt to increase the use of the currency in Egypt. Talks are ongoing for the China Development Bank to set up a branch in Egypt, a move that would enable Chinese companies to access CNY in Egypt to fund local investments, he added.

Background: Chinese interest here comes as a growing number of manufacturers (Chinese and foreign alike) pivot to a “China +1” strategy, moving into other geographies to reduce supply chain and geopolitical risk. HSBC Egypt CEO Todd Wilcox highlighted recent GAFI roadshows to China put on by HSBC, the takeaway from which, he wrote yesterday, was that investors “highly … regard the future that exists for them in Egypt.” You can read Todd’s column here.

PSA #1 – There are only two days left for Egyptians living abroad to settle unfulfilled military service obligations by paying a fee in FX. Folks looking to settle their national service obligation will need to deposit USD 5k / EUR 5k into a Banque Misr account at the bank’s Abu Dhabi branch by Wednesday, 13 September. Head here for more information.

PSA #2 – Niqab school ban: The Education Ministry has imposed a ban on female students wearing the niqab in schools from the beginning of the next term, according to a decision picked up by state media. The decision doesn’t refer to the niqab specifically but instructs female students not to wear head coverings that obscure their faces.

PSA #3- Storm Daniel to make landfall in Egypt: You may want to ready your umbrellas if you’re on the north coast today as the lingering impact of Storm Daniel brings low-to-medium rain, according to the Egyptian Meteorological Authority. Our favorite weather app suggests Cairo will get off with little more than cloudy skies this afternoon, with gusts of wind and a chance of showers, though there remains a risk of blowing sand throughout the day. The capital city will see daytime highs of around 33-34°C before dropping to 25°C tonight, according to the latest forecast.

We look set to get off lightly: Authorities in eastern Libya say that more than 2k people have died after Storm Daniel caused floods in the coastal town of Derna. A spokesperson for the Libyan National Army said that the storm had caused dams above the village to collapse, “sweeping whole neighborhoods” into the sea. As many as 5-6k people are thought to be missing. (Associated Press | Reuters | Wall Street Journal | The National)

SIX DAYS TO GO until we see some of you at the Enterprise Finance Forum, which takes place 18-19 September (Monday and Tuesday) at the St. Regis Hotel on the Nile Corniche. This flagship forum is the latest in our must-attend series of invitation-only events, where CEOs, bankers, investors, founders, and corporate leaders will meet to discuss the trends shaping the future of banking, finance, NBFIs, and fintech — and of their clients.

What to expect: Join Sherif El Behery (CEO and managing director, MDI), Mohamed Mounir (deputy CEO, ValU), Tarek Shahin (chief investment officer, CI Asset Management), Himanshu Shrimali (co-founder and CEO, Menthum), Amro Abou esh (founder, Maseera), Kamel Saleh (CEO, Grant Thornton Egypt) and many others for talks on everything from where the talent in our industry can be found, whether NBFIs are a bubble and the state of finance’s professional services firms.

Tap or click here to view the FULL AGENDA with SPEAKERS.

There will be plenty of parking available at the venue for all those attending.

** We are honored to count some of the region’s most important financial institutions as

our partners for this special event. The Enterprise Finance Forum could not take place without the support of our partners including Banque Misr, Al Baraka Bank, FAB Misr, HSBC, Mashreq, CI Capital, Global Corp, Visa, Hassan Allam Utilities, the IFC, and Post for Investment.

HAPPENING TODAY-

EFG Hermes’ Saudi Forum concludes today: It’s the second and final day of the EFG Hermes Saudi Forum (pdf ) in London, which brings together more than 50 companies from the KSA with major institutional investors from across the world.

We’ll get our first look at the new-look iPhone when Apple holds its annual product event. Expect updated iPhones, two refreshed watches, and a switch away Lightning ports to USB-C (thanks, European Union, for making all of our cables redundant). You can watch the event here at 8pm CLT on Apple’s website or its Youtube channel.

PSA #4- It will likely be some time before you can get the new iPhone 15 models here in Egypt. Apple authorized resellers in Omm El Donia are still stuck moving small quantities of the iPhone 13 amid ongoing supply constraints thanks to (sing it with us, folks) the ongoing FX crunch.

Sahara expo: The Sahara agriculture exhibition concludes today at the Egypt International Exhibition Center (EIEC), showcasing agricultural machinery, water management systems, and post-harvest technologies.

Looking to do your master’s degree in the UK? Applications for the British government’s Chevening scholarship open today at 12pm GMT. The scholarship offers full financial support for students to pursue an eligible master’s degree at over 150 UK universities. The deadline for applications is 7 November. Apply here.

HAPPENING THIS WEEK-

#1- The Hydrogen Egypt Summit opens its doors at the Nile Ritz Carlton tomorrow. Local and global energy players will discuss how to realize Egypt’s potential to become a regional green hydrogen hub. The event runs through to Thursday.

#2- DEBT WATCH- Fresh securitizations from EFG Corp Solutions and Al Ahly Tamkeen this week? That’s according to an unconfirmed report from Al Borsa, which said this week that:

  • The EFG Finance unit will sell about EGP 800 mn worth of bonds;
  • Al Ahly Tamkeen, the microlending unit of the National Bank of Egypt, will take about EGP 700 mn of bonds to market.

AND- There are more planned later this month: Valu, Arabia Investments Holding’s UE Finance, and United Bank’s United Finance are reportedly planning to go back to the market in September.

  • Valu will look to sell EGP 1 bn of asset-backed securities before the end of the month, Al Mal quotes CIO Shokry Bidair as saying.
  • UE Finance will hold a EGP 1 bn issuance while United Finance will securitize EGP 700 mn of its leasing portfolio, according to Al Borsa.

#3- New capital requirements for FX bureaus in play: Friday is deadline day for FX bureaus to comply with the central bank’s strict new capital requirements. Under new rules aimed at curbing the resurgent parallel market, the central bank is raising the capital requirement for exchanges to EGP 25 mn from just EGP 5 mn currently.

#4- US to make decision on military aid by Thursday: The US State Department is set to decide whether to withhold a portion of Egypt’s annual USD 1.3 bn of military aid on human rights grounds by 14 September.

Remember: A number of Democratic lawmakers in the House and the Senate have called on the Biden administration in recent weeks to withhold a quarter of the USD 1.3 bn. This would be the third consecutive year that Egypt has had some of its military aid withheld: the Biden administration blocked Egypt from receiving USD 130 mn of aid in 2021, a figure that rose to USD 205 mn last year.

#5- The National Dialogue: The National Dialogue is holding a new round of closed-door meetings this week to draft a new batch of recommendations. The group sent its first batch of recommendations to the president for approval last month.

HAPPENING THIS MONTH-

B Investments to acquire OFH: We’re expecting B Investments to wrap up its acquisition of Orascom Financial Holding before the end of the month. The EGX-listed private equity firm will acquire OFH via a share swap transaction, which we learned in June should be completed by the end of 3Q.

Two weeks and counting? Al Borsa reported yesterday that the transaction is expected to wrap within the next two weeks, with BDO, the financial advisor on the transaction, preparing to file the paperwork with the Financial Regulatory Authority.

THE BIG STORIES ABROAD-

The aftermath of Saturday’s devastating earthquake in Morocco continues to occupy the global front pages this morning, with the death toll climbing above 2.8k four days after the quake hit. Attention has shifted towards the slow pace of aid efforts in the remote Atlas mountains where thousands of people remain missing and thousands more homeless. (Associated Press | Reuters | Bloomberg | New York Times | Washington Post | Wall Street Journal)

Also worth noting internationally:

  • US moves to ease tensions with Iran: The Biden administration will release USD 6 bn of frozen Iranian funds in exchange for the release of five US prisoners . (Associated Press | Reuters | Washington Post | Financial Times)
  • The Turkish SBF will have to wait 11k years before his next crypto trade: A Turkish court has handed an 11,000-year sentence to the head of collapsed crypto exchange Thodex for a range of crimes including fraud and money laundering. (Bloomberg)
  • Speaking of SBF: His lawyers are asking the court to grant him pretrial release because the prison internet isn’t good enough. The disgraced founder of imploded crypto exchange FTX was recently sent to jail to await his October trial due to evidence he tried to tamper with witnesses. (Fortune)

CIRCLE YOUR CALENDAR-

National Investment Forum in 1H 2024 : The government plans to hold an investment forum during the first half of 2024 aimed at attracting fresh investment into the economy, cabinet said yesterday, without disclosing a date.

EEC takes trade roadshow to Iraq this month: The Engineering Export Council of Egypt will lead a trade mission consisting of 22 Egyptian companies to Iraq at the end of this month, it said yesterday. The participating companies, which operate across various sectors of the engineering industry, will target securing export deals with the Iraqi market. The mission will visit Erbil and Baghdad between 23 to 29 September.

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

*** It’s Going Green day — your weekly briefing of all things green in Egypt: Enterprise’s green economy vertical focuses each Tuesday on the business of renewable energy and sustainable practices in Egypt, everything from solar and wind energy through to water, waste management, sustainable building practices and how you can make your business greener, whatever the sector.

In today’s issue: How will climate change impact Egypt’s energy infrastructure?

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