CBE expected to hold interest rates today for second consecutive meeting

Good morning, friends. It’s interest rate day, and the consensus we polled is a hold at 19% on deposits and 20% on lending for the second time running.

We dive into a recent court success for the ERC board. The State Council's Administrative Court suspended GAFI’s order to convene a general meeting and elect a new board at Egyptian Resorts Company — the Sahl Hasheesh developer. GAFI's Grievance Committee meets today to figure out where this leaves things and we'll be watching.

ALSO – International lenders are circling the USD 3 bn EgyptAlum-Alba alumina refinery, Managing Director Mahmoud Agour tells us. More on this and more stories in the news well below.

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Happening today

It’s interest rate day: The Central Bank of Egypt (CBE) is expected to keep interest rates on hold, at 19% for deposits and 20% for lending, for the second consecutive time when its Monetary Policy Committee meets today. Financial analysts we spoke to for our regular interest rate poll say the CBE is likely to maintain its “wait-and-see” approach to keep inflation expectations anchored amid elevated global energy prices and geopolitical uncertainty.

Veteran banking expert and former Banque Misr Deputy Chair Sahar El Damaty also anticipates a hold scenario, citing the current geopolitical conditions. “Although inflation is hovering around 14.9%, we are still facing imported inflationary pressures stemming from rising oil and natural gas prices, alongside higher shipping and ins. costs, all of which are naturally feeding into the prices of most goods,” El Damaty tells EnterpriseAM.

Still drilling down the debt

The Oil Ministry continues to pay off arrears owed to international oil companies, bringing the dues down to USD 440 mn from USD 714 mn at the end of April and from USD 6.1 bn at its peak in June 2024, Oil Minister Karim Badawi said. The government intends to fully settle the bill owed by the end of June.

The strategy: The government wants to revive upstream activity and stabilize declining domestic output. To secure its target of USD 6.2 bn in FDI for the oil sector next fiscal year, the government is moving on multiple fronts such as clearing arrears owed to foreign energy firms, rolling out risk-adjusted upstream terms, and attracting significant FDI commitments — including a USD 19 bn pledge from global energy majors over the next three years.

We need every barrel. With oil output currently at 560k bbl / d versus a target of roughly 626k bbl / d by the end of next FY, and with gas output under 4 bcf/d with a push to add 1 bcf/d by year-end — part of a larger target to reach 6.2 bcf/d by 2027 — the math only works if international oil companies are willing to drill.

Another listed SPAC

Blank-check company OG Capital For Investments has formally landed on the EGX, after securing approval for a temporary main-market listing, according to a bourse statement. This makes it the second special purpose acquisition company (SPAC) to make it onto the exchange after Catalyst Partners Middle East (CPME). While OG Capital listed with an Issued capital of EGP 10 mn under the non-banking financial sector, the ticker hasn’t gone live, and its shares aren’t trading yet.

We still don’t know who actually sits behind the SPAC, which is unusual for a vehicle whose credibility rests on the people backing it. Investors in a blank-check company are typically underwriting the sponsors before there’s an operating business or visible acquisition in the pipeline. Check out our explainer for more on how SPACs work.

The clock starts now: OG Capital has three months from listing to raise its capital from EGP 10 mn to at least EGP 100 mn through a private placement to qualified investors and financial institutions, and six months from listing to gain shareholder approval for an acquisition target. The full acquisition must close within two years of listing, subject to FRA extension. Once those gates are cleared, the SPAC can move toward unfreezing the ticker for retail trading.

REMEMBER- These things take time. CPME first expressed interest in going public back in 2022. It was temporarily listed in November 2024 but only hit the EGX trading floor a little over a year later. Its shares closed up 20% to EGP 12 apiece on debut, some three months after it completed its twin acquisition of Qardy and Catalyst Partners.

Mapping out the Alex Metro expansion

The National Authority for Tunnels has signed a EUR 1.4 mn contract with French consulting firm Systra to conduct studies for the second phase of the Abu Qir Metro, a senior government official tells EnterpriseAM. The firm aims to complete the required studies by July, paving the way for a construction tender to be floated and work to begin. The Transport Ministry said last month it had begun formal procedures for the phase, following breaking ground on the first phase of the project in February.

White Knights triumph

Zamalek clinched their 15th Egyptian Premier League crown after besting Ceramica Cleopatra in last night’s showdown, scoring 1-0 after a goal by Oday Dabbagh in the match’s first 10 minutes. This victory follows the team’s loss of the African Confederation Cup final earlier this month to Algeria’s USM Alger.

PSA

The cabinet has extended its mandatory work-from-home policy through to the end of June, according to a statement. This is the second consecutive renewal of the measure, which applies to both public and private-sector employees and eases pressure on the national grid during peak summer consumption.

WEATHER- It’s another breezy day in Cairo today, with a high of 29°C and a low of 18°C, according to our favorite weather app.

It’s several degrees cooler in Alexandria, with a high of 24°C and a low of 17°C.

And over the weekend, expect to see slightly warmer weather, with a high of 31°C in the capital and a high of 24°C for our friends on the Mediterranean.

The big story abroad

We’re inching closer to what will be the largest IPO ever after SpaceX filed publicly late last night. Now the world is sitting tight in anticipation of the rocket maker’s imminent Nasdaq debut. We dive into the full story and what it means for the Gulf in this morning’s Planet Finance, below.

The return of monetary tightening? The latest meeting minutes from the Federal Reserve indicate the central bank’s willingness to raise interest rates if inflation maintains its growth trajectory above 2%. Prior to this development, CME Group data showed interest rate futures markets pricing in a nearly 50% chance of at least one quarter point rate hike in 2026.

Meanwhile, in the tech world: Nvidia announced USD 80 bn in stock buybacks and an increase in its dividend payout yesterday, after 1Q sales grew 85% y-o-y to USD 81.6 bn, surpassing expectations.

More on the Warner Bros. buyout: To finance Paramount’s takeover of Warner Bros. Discovery, Bank of America and Citigroup are gauging investor appetite for a massive debt package. Early talks indicate a mix of around USD 30 bn in high-grade bonds, USD 12 bn in junk bonds, and USD 7.5 bn in loans.