Good morning, folks, and a happy new fiscal year. We kick off the first day of FY 2025-26 with good news — the economy grew at a 4.8% clip during 3Q FY 24-25, marking its strongest quarterly performance in three years, and we’re in for fresh investments from China.

PSA-

WEATHER- It’s another sunny day in Cairo, with a high of 37°C and a low of 25°C, according to our favorite weather app.

It’s a lot cooler in Alexandria, with a high of 31°C and a low of 22°C.

** DID YOU KNOW that we now cover Saudi Arabia and the UAE?

** Were you forwarded this email? Tap or click here to get your own copy delivered every weekday before 7am Cairo time — without charge.

WATCH THIS SPACE-

#1- The government is working to wrap up its fifth review with the International Monetary Fund (IMF) before the end of June July. Ongoing negotiations with the IMF should lead to the Fund and local authorities reaching a staff-level agreement on the fifth review of our USD 8 bn program by the end of July — and with it unlocking the USD 1.3 bn fifth installment of the Extended Fund Facility Arrangement — a government source told EnterpriseAM yesterday.

#2- The state is transferring assets to the Environment Ministry in preparation for a host of programs funded by the IMF’s USD 1.3 bn Resilience and Sustainability Facility, a government source told EnterpriseAM. The first transfer saw renewable project, power plant, and mass transit assets totalling EGP 1 bn being given to the ministry by the electricity, transport, and housing ministries.

The transfer of the assets will be followed by the Fund beginning to release tranches under the facility, which will be done in parallel with the launch of targeted projects. We’re still yet to get a clear picture of the timeline and size of the tranches.

An in-the-works asset registry will help the state issue sustainable sukuk and bonds secured by these assets, which will then be expanded into a risk mechanism for the program in cooperation with the IMF, we were told.

#3- The EGX may soon become a route to state investment incentives under a proposal in discussion with government bodies, EGX Executive Chairman Ahmed El Sheikh told Hapi Journal in an interview (watch, runtime: 34:42). Companies that list at least 20% of their shares and support Egypt’s FX position — by exporting or replacing imports — could qualify for benefits under the Investment Act, he said.

IN CONTEXT- Earlier this month, we reported that the EGX asked to delay the implementationof the stamp tax on EGX transactions as it works on incentives to offset its impact, including proposed amendments to tax, investment, and capital markets laws. These aim to boost listings, raise market cap, and improve liquidity.

The plan would make EGX listings a formal condition for incentives, similar to those granted based on location or sector, he added. It’s a bid to link going public with delivering macroeconomic value.

No new legislation is needed — just a tweak to the Investment Act’s executive regulations, now being coordinated with the General Authority for Investment and Freezones and the Investment Ministry, El Sheikh said.

MEANWHILE- A Nilex-listed fertilizer company is preparing to move to the EGX main market after acquiring unlisted firms, El Sheikh added. The merger will create a larger entity eligible for main market trading, pending completion of acquisition procedures and regulatory disclosures, he said. El Sheikh noted the company's capital could grow from EGP 40-50 mn to nearly EGP 1 bn post-merger, though no timeline was given for the move.

HAPPENING TODAY-

#1- Prime Minister Moustafa Madbouly is in Spain to talk development finance during the UN’s International Conference on Financingfor Development, which is taking place in Seville until 3 July, according to a cabinet statement. Madbouly is joined by Planning Minister Rania Al Mashat and Finance Minister Ahmed Kouchouk.

#2- El Khatib is in Prague to talk investment: Investment Minister Hassan El Khatib is in Prague, leading a delegation participating in the second Egyptian-Czech Joint Economic Committee — the first such gathering in nine years, according to a statement. El Khatib will also attend the Czech Business Forum, where some 42 Czech companies in auto, renewables, textiles, medical supplies, and chemicals will explore potential investments in Egypt. El Khatib's agenda also includes talks with Czech Industry and Trade Minister Lukáš Vlček and meetings with major Czech investors eyeing expansion in Egypt.

#3- Senate elections are upon us: The National Elections Authority is holding a presser today to announce the ins and outs of the upcoming senate elections.

#4- Attention, executives. AUC’s Onsi Sawiris School of Business is giving a taste of its Executive MBA program with an online session to “explore how leaders can drive transformation, adapt to change, and lead with clarity in uncertain times” at 7pm tonight, held by Imperial College Business School Associate Professor Namrata Malhotra. You can find the link to register for the webinar on the business school’s LinkedIn account.

NEWS TRIGGERS-

It’s the first day of July — here are the key news triggers to keep your eyes on this month:

  • Fingers crossed for the non-oil private sector moving back into the green. S&P Global will release its PMI report measuring non-oil private sector activity for June on Sunday, 7 July. There’s reason to be hopeful, with the S&P’s last report showing the country’s headline figure for May rising to just 0.5 percentage points shy of the 50.0 mark threshold separating contraction from growth.
  • Brics assemble. The annual Brics Summit is taking place on 6-7 July in Brazil’s Rio de Janeiro, marking the first time the bloc of nations has met since US President Donald Trump returned to the White House. Some of the Trump administration’s most punitive tariffs have been focused on Brics members; Trump even threatened tariffs of 100% or 150% if the bloc attempted to launch a common currency or undermine the USD’s status as the global reserve currency.
  • Three interest rate cuts in a row? The central bank’s Monetary Policy Committee (MPC) is holding its fourth policy meeting of the year on Thursday, 10 July to review rates. The MPC cut interest rates by 100 bps in its last meeting.
  • Is inflation still on the rise? The business community and policymakers will have their eyes on June’s inflation figures due on Thursday, 10 July after headline inflation ticked up for the third month running to 16.8% in May. Some analysts are already expecting inflation to rise again on the back of fuel price hikes.

CIRCLE YOUR CALENDAR-

FinMin to start paying back delayed export subsidies: The Finance Ministry will start paying back exporters 50% of their total overdue payments under the export subsidy program over a four-year period starting 7 August, Finance Minister Ahmed Kouchouk announced in a statement. The other half will come in the form of tax and custom breaks and utilities.

So far, 2.4k exporters are set to receive over EGP 25 bn in total, with disbursement arranged through four banks — the National Bank of Egypt, Banque Misr, Banque du Caire, and the Export Development Bank.

REMEMBER- Under the revamped export subsidy program, subsidy disbursements will be made in no more than 90 days and will be paid in full without tax deductions. The program, which would have an annual budget of EGP 45 bn, tailors support to each sector’s needs, starting with engineering and chemicals.

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

THE BIG STORY ABROAD-

All eyes are on the US Senate as they race to vote on amendments to US President Donald Trump’s so-called “big, beautiful bill,” — a sweeping legislation that aims to pass a trove of tax cuts and reduce spending on medicaid and clean energy tax credits — ahead of the president’s 4 July deadline. Senate Republicans are expected to vote throughout the night, after a day that saw discussions drag as they work to find a balance that would appease the bill’s opposers, and that could pass the House later. The Senate needs no more than three GOP Senators to reject the bill in order to still be able to pass it — and currently, two senators have already decided they are firmly against it.

What’s on the drawing board? Softening the phase-out of clean energy subsidies, changes to Medicaid, and changes to the rural hospital fund.

The story is leading front pages everywhere: Bloomberg | New York Times | Guardian | Wall Street Journal | Financial Times

PLUS- Trade talks between Canada and the US are back on track after Canada scrapped its plans to tax US tech firms, with an eye to complete talks by 21 July. (Guardian | Reuters)

AND- Netanyahu to visit Trump next week: Israeli Prime Minister Benjamin Netanyahu will meet US President Donald Trump at the White House next Monday to talk Iran, Gaza, Syria, and regional security. The visit comes as Trump presses Israel to end its war on Gaza and secure hostage releases. (Reuters | Bloomberg | Associated Press)

News of the visit came after Israeli strikes killed at least 60 people across Gaza yesterday. The attacks came following fresh evacuation orders from the Israeli military in northern Gaza, as Israeli Strategic Affairs Minister Ron Dermer travelled to Washington for talks on a possible ceasefire and hostage release agreement. (Reuters | The Guardian | BBC)

ALSO- Trump lifts US sanctions on Syria post-Assad: Trump signed an executive order yesterday terminating US sanctions on Syria to boost its war-torn economy and support its new government. (Reuters | Bloomberg | Financial Times)

*** It’s Going Green day — your weekly briefing of all things green in Egypt: EnterpriseAM’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: We look at the climate financing needed for us to hit our nationally determined contributions for 2030.

Tags: