Valu’s first conventional corporate bond is split between fixed and variable rate tranches

Good morning, folks. We have a dense morning today, featuring four stories that are each about moving a different section of the economy forward, some faster than expected.

The EGX interview is the one to read first. We sat down with EGX Executive Chairman Omar Radwan, who told us that short-selling is closer to live than the official timeline suggests. Up to six state IPOs could complete within the next year, and the EGX has made its case to S&P DJI. Radwan’s read on all three is more optimistic than the market consensus — worth weighing carefully.

On tax: The new Income Tax Act has been shelved as the Finance Ministry pivots to a third facilitation package instead, with a fourth enforcement-focused package to follow. The carrot approach is working — tax collections went up 27.5% in the last FY — so the government is doubling down before reaching for the stick.

In steel: Eight billet licenses go to tender this August, adding 2.8 mn tons of annual capacity. Some downstream manufacturers say supply is already too tight, but others disagree.

And in energy — a USD 128 mn, six-pipeline infrastructure package should come online by early 2027. The biggest piece is the pipeline connecting Midor to Al Hamra, which closes the country’s Mediterranean refining loop.

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Wagering on cuts

Valu is taking its maiden conventional corporate bond to market, moving ahead with an EGP 1 bn private placement structured to capitalize on an anticipated central bank easing cycle, according to the company’s EGX disclosure (pdf). This is the first issuance of a broader conventional debt program for the company, per the filing.

The breakdown: The issuance is split into two tranches — EGP 460 mn in 13-month notes at a fixed annual yield of 20.75% and a larger EGP 540 mn, 36-month tranche at a variable rate tied to the CBE’s average corridor rate plus a 1% margin.

Expected rate cuts factored in: The floating tranche accounts for 54% of the issuance and would currently carry a yield of around 20.5%, based on the Central Bank of Egypt’s 19% deposit and 20% lending rates. That leaves slightly more than half of Valu’s new funding positioned to become cheaper if the central bank resumes monetary easing rather than locking the full issuance in at current rates.

We knew this was coming: CEO Walid Hassouna told us last November that the company was preparing to tap the conventional corporate bond market to diversify its funding stack away from pure securitization, bilateral facilities, and discounting. While Hassouna initially targeted an EGP 2-3 bn transaction in 1Q 2026, the EGX disclosure suggests this EGP 1 bn placement is step one of that larger program.

Repricing push

Medical supply companies are pushing the Egyptian Authority for Unified Procurement (UPA) to reprice contracts after the latest EGP slide pushed their costs above agreed rates. The firms are set to meet the authority to discuss repricing supplies within the current fiscal year’s budget, Chamber of Commerce’s Medical Supplies Division head Mohamed Ismail Abdo tells EnterpriseAM. The UPA had previously promised to review prices but has yet to act, he adds.

The good news is that old dues to the firms have come down sharply. Arrears fell to EGP 7 bn as of April, down from a peak of around EGP 50 bn last year, Abdo says. The UPA is now making two supplier-payment batches each month as it works to clear what remains without letting new dues accumulate.

IN CONTEXT- Abdo told us a year ago that medical-supplies firms had been calling on the government to help settle their UPA dues, shortly after government sources told us the Finance Ministry was mulling a three-year repayment plan. The government later disbursed EGP 14 bn as a first tranche to medical supply companies after raising the UPA’s budget. The UPA had also cleared a similar bottleneck with drugmakers, settling 90% of pharma arrears by last May.

Data point

EGP 15.9 bn — that’s the Suez Canal Economic Zone’s (SCZone) annual revenue for FY 2025/26, its highest on record, according to a cabinet statement. The top line came in 37% above the previous year’s EGP 11.6 bn and 51% ahead of the EGP 10.5 bn budget target. USD-denominated revenues reached USD 246 mn, accounting for 76% of the total.

REMEMBER- SCZone Chairman Walid Gamal El Din telegraphed this milestone back in April, when he predicted total revenues would surpass the EGP 15 bn mark by the end of the fiscal year.

PSA-

WEATHER- And we are back to mid-thirties summer heat in Cairo today, with a high of 35°C and a low of 25°C, according to our favorite weather app.

It’s also more tolerable in Alexandria, with a high of 32°C and a low of 24°C.

The big story abroad

Conflicting accounts over the US-Iran war are taking the lead today, as US President Donald Trump claims that talks with Tehran are underway and that the Strait of Hormuz would imminently reopen. Iranian Foreign Ministry spokesperson Esmaeil Baghaei denied ongoing talks with Washington, stating instead that Tehran is discussing shipping administration in the contested waterway with Oman.

As the regional conflict continues to strain oil supply, Trump has chastised ExxonMobil and Chevron for reaping gigantic windfalls over rising oil prices. The energy giants have earned as much as USD 318 mn per day in 2Q, a more than threefold y-o-y jump. Trump urged the companies to “give some of that back to the public” and trim prices at the pump.

Apple issued a new challenge to the UK government’s attempt to gain backdoor access to encrypted user data, a push the government defends as essential for protecting the public from terrorism and serious crime. The government’s prior demand called for access to data from UK and US customers, which triggered a diplomatic brawl between London and Washington last year.

JPMorgan Chase will plug USD 750 bn into US housing through 2035 as part of its American Dream Initiative, which aims to construct or preserve 1 mn affordable housing units and help 500k customers acquire homes.

Visa is acquiring Israeli fraud detection startup BioCatch for USD 2.4 bn, continuing the payment player’s expansion into cybersecurity amid a flood of AI-powered scams. Under the agreement, Visa will acquire the startup's behavioral biometrics platform, which analyzes user interaction data to detect scammers and bots.

*** 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: Egypt has three biofuel projects producing sustainable aviation fuel, but informal collection networks are stifling growth