Government set to eliminate VAT exemption for natural gas for the first time

Good morning, folks, and welcome to the weekend. With summer (and Sahel) season just about to kick off, we bring you an all-inclusive guide to everything beach. In today’s issue, we break down all the beach kit must-haves and more.

Also today: We hit the cinemas to review Backrooms, try out Maadi’s new blues music bar, strategize and vanquish with Command & Conquer, and get author-first insights in Bookmarked.

But first, your weekly recap…

🗞️ LAST WEEK IN 3 MINS-

TAX-

Natural gas is losing its VAT exemption for the first time, slapping a flat EGP 20/mcf table tax on the fuel to ease the state’s budget burden. The amendments also extend a VAT suspension on production machinery and medical equipment to four years to stimulate local manufacturing and keep capital from getting locked up in red tape. The draft law will now move to the House for approval.

InstaPay, Fawry, and a number of other banking and non-banking finance services and investment funds are set to receive VAT exemptions under the second tax facilitation package. The package is now heading to the House of Representatives for approval.

M&A WATCH-

Ascom’s board of directors approved a fair value study to acquire a 90% stake in Raya Holding’s Ostool Transport and Logistics, bringing Qalaa Holdings’ mining arm one step closer to executing the EGP 641 mn buyout.

REAL ESTATE-

Talaat Moustafa Group’s Iraqi subsidiary secured a license and land for a USD 10 bn megaproject in Baghdad. Located within Baghdad Financial and Economic City, the 12.8 mn sqm project will house 250k residents across 43k units, launching with a 16-year construction timeline and a 12-year sales window.

IPO WATCH-

The retail tranche of Korra Energi’s IPO closed 31.35x oversubscribed before the Eid El Adha break, according to EGX data. Retail buyers placed initial orders for 3.1 bn shares, targeting just 99 mn shares earmarked for the public. Korra’s IPO is the EGX’s second private-sector main-market listing this year, following Gourmet’s blockbuster offering.

MANUFACTURING-

Chinese equipment manufacturer Sany Group plans to invest over USD 300 mn to build Egypt’s first wind turbine factory in Suez Canal Economic Zone. The first phase of production will supply an undisclosed 1 GW wind project in the Gulf of Suez.

The Industrial Development Authority (IDA) is asking parliament for EGP 21 bn over the next three years to complete infrastructure across 17 industrial zones. The request comes weeks after five new zones were transferred to the IDA’s jurisdiction, deepening pressure on the government to expand the supply of investment-ready land.

ECONOMY-

The EGX30 added 1.73% in May to close the month at roughly 52.7k points — a far cry from April’s 14.2% surge but still a solid showing since the month was shortened by four trading sessions for Eid El Adha. Total market cap climbed 2.48% to EGP 3.76 tn.

Egyptian firms reported real annual sales contraction of 11.4% in the World Bank’s latest Enterprise Survey, lagging behind the wider MENA region’s 5.2% growth. Behind this headline slump is a set of operating-environment findings suggesting that Egypt’s three-year macro stabilization push has not yet filtered down to the day-to-day constraints firms identify as their biggest obstacles to growth.

INVESTMENT WATCH-

Egypt’s gross domestic savings rate collapsed to 1.2% of GDP in FY 2024/25, down from 6.1% the previous fiscal year — a 75% drop in a single year. This puts Egypt’s savings rate at a fraction of what high-growth emerging markets typically need to fund investment-led growth.

Our investment fund industry became an EGP 411 bn parallel route for household savings by end-1Q 2026, up 30% in a single quarter. The shift isn’t replacing the deposit base but rather opening a regulated, lower-ticket channel for households to gain exposure to the very asset classes they’ve long preferred.

ENERGY-

Egypt’s energy challenge is characterized by a widening gap between declining production and rising demand, but the government is working to stabilize the sector. The Oil Ministry is making good on its debts to international oil companies, announcing last week that it will fully settle these arrears by 10 June, ahead of its original end-of-June target.

CAPITAL MARKETS-

Egyptian equities could lose their emerging market label in one of the world's most widely followed equity index families. S&P Dow Jones Indices launched a consultation on demoting Egypt to frontier market status, citing lingering concerns around market accessibility, capital mobility, and broader institutional stability.

🌍 AROUND THE WORLD IN SEVEN DAYS-

It’s been a mixed bag in the news cycle this week. Here’s the rundown.

The US-Iran diplomatic stalemate persisted, despite both sides spending last weekend exchanging revisions to a draft pact that would keep the ceasefire in place. The two countries dominated headlines after exchanging military strikes on Monday. The US Central Command launched “self-defense strikes” over the weekend in response to “aggressive Iranian actions,” which included targeting a US drone over international waters. Iran retaliated by striking an air base hosting US forces.

On Wednesday, the war saw serious escalations as US forces intercepted Iranian ballistic missiles and drones aimed at US bases in Bahrain and Kuwait. The US then conducted “self-defense” strikes on Qeshm Island in the Strait of Hormuz.

On Thursday, the US House approved a war powers resolution to curb military action against Iran, marking the first Capitol Hill-backed congressional challenge to US President Donald Trump since the conflict began.

Flights at Kuwait’s international airport were suspended on Wednesday after an Iranian drone strike hit the airport, injuring at least 63 people, according to the country’s Health Ministry. The strikes caused heavy damage to one of the airport’s passenger terminals.

CLOSER TO HOME- Attacks in Lebanon escalated on Monday as Israeli Prime Minister Benjamin Netanyahu ordered attacks on the southern suburbs of Lebanon’s capital Beirut, where tensions with “terrorist targets” in the Hezbollah-controlled Dahiyeh persisted. Hezbollah responded with rocket fire into northern Israel. On Tuesday, Israeli drone strikes killed eight people just a day after Trump announced that Israel and Hezbollah had agreed to ease hostilities.

Israel maintains military action in Lebanon: Netanyahu’s orders came on the heels of Hezbollah’s “repeated violations” of a ceasefire that was announced in April and attacks on “Israeli cities and civilians.” Israeli Defense Minister Israel Katz stated that Israel would continue carrying out strikes in Lebanon and would not withdraw from the country’s south for the time being.

IN OTHER NEWS- On Tuesday, Russia unleashed a sweeping overnight assault on Kyiv and other cities — one of its largest aerial attacks on Ukraine in recent months — leaving at least 18 people dead and more than 100 wounded. According to Ukraine’s military, the attack involved over 600 drones and dozens of missiles, including advanced hypersonic weapons. The Health Ministry reported five medical facilities damaged or destroyed.

ALSO- The Trump administration proposed new tariffs of up to 12.5% on imports from 60 economies following an investigation into goods allegedly produced by forced labor. The sweeping tariff package aims to revive Trump’s emergency tariffs, struck down earlier this year by the Supreme Court. Major trading partners like China, the EU, Japan, India, Canada, and others would be affected by the levy.

AND- The UN General Assembly elected its next head. Bangladeshi Foreign Minister Khalilur Rahman narrowly defeated Cyprus’s Andreas Kakouris to secure the presidency of the UN General Assembly.

IN BUSINESS NEWS- Berkshire Hathaway made a USD 6.8 bn housing play, agreeing to acquire US homebuilder Taylor Morrison — the first multi-bn-USD acquisition under the helm of newly minted CEO Greg Abel. Alphabet will sell USD 80 bn worth of stock to fund investments in computing infrastructure to meet customer demand for AI products. The company intends to source the funds via underwritten offerings, a USD 10 bn investment from Berkshire Hathaway, and selling Class A and Class C shares.

IN THE TECH WORLD- Dell premiered the XPS 13, its new low-cost offering, with prices starting at USD 699. It is expected to butt heads with Apple’s MacBook Neo, another laptop marketed for its affordability. Nvidia unveiled a new chip designed to run AI agents on personal laptops and desktop computers. CEO Jensen Huang said the RTX Spark PC chip is part of a broader effort with Microsoft to “reinvent the PC” for the AI computing era.

☀️ THE WEATHER THIS WEEKEND-

The hot weather continues this weekend. Today brings warm weather and hazy sunshine as temperatures peak at 36°C before settling at a breezy 26°C by nightfall. Tomorrow brings even hotter conditions, with a high of 39°C and a low of 23°C. Along the North Coast, expect slightly milder temperatures today and tomorrow with a high of 31°C and a low of 19°C, according to our favorite weather app.

🎤 HAPPENING THIS WEEKEND-

Renowned Italian maestro Andrea Bocelli is landing in Egypt as part of his Romanza World Tour tonight at the City of Arts and Culture in the New Capital. You can book your tickets through Ticketsmarché.

Still riding that Eid high? Ramy Sabry takes the stage at Tanza in Sixth of October City tonight for a high-energy, high-production live performance of his biggest hits. The concert kicks off at 8pm — tickets are selling fast, so secure yours through Ticketsmarché while they last.

Ali El Haggar shows no signs of slowing down. The veteran singer returns to the Cairo Opera House in Zamalek tonight for 100 Years of Singing to honor the late music icon and composer Ammar El Sherei. Expect a nostalgic evening of orchestral arrangements and timeless songs. The concert begins at 7:30pm — tickets are available on Tazkarti.