S&P affirmed Egypt’s sovereign credit at B/B and Fitch Ratings at B, both with a stable outlook

Good morning, friends, and welcome back from the long weekend. Today’s issue gives us some genuine bright spots to carry into the week: inflation cooled in September, a private equity exclusive, and a new strategic partnership with South Korea.

Leading today’s issue: Annual urban inflation eased to 13.9% in September, its lowest rate since February, thanks to a favorable base effect, though monthly prices rose 1.3%, the fastest increase since May. The relief is real for now, but analysts expect a spike in the coming months. The Central Bank’s Monetary Policy Committee meets next on 29 October with this data as the latest reading.

And we’ve got an exclusive — private equity fund manager Ezdehar has acquired local fashion retailer Consolidated Group and is folding it into DalyDress. We sat down with Ezdehar Founder and Managing Director Emad Barsoum to talk about the transaction, Ezdehar’s Fund III and Fund II, how Fund I turned EGP growth into USD returns, and why the EGX is back on the table as an exit, with as many as three of its companies lined up as possible IPO candidates.

MEANWHILE- President Sisi is wrapping up an Asia tour that delivered a strategic partnership upgrade with South Korea, a Comprehensive Economic Partnership Agreement launch, and MoUs covering shipbuilding, clean energy, and hydrogen-powered trams for the New Administrative Capital. From Seoul, he went to Malaysia, and he’s now in Indonesia for the final stop.

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Our credit rating affirmed

S&P Global Ratings affirmed Egypt’s sovereign credit at B/B and Fitch Ratings set it at B, both with a stable outlook, according to S&P’s recent rating update (pdf) and Fitch’s rating action commentary. Both agencies credited the flexible exchange rate, record reserves, and multilateral support for their assessments. S&P noted foreign portfolio outflows reached USD 9.5 bn and the EGP depreciated up to 15% before stabilizing; Fitch said outflows exceeded USD 6 bn and the currency lost over 14% before recovering. On reserves, S&P cited international reserve assets of USD 54.5 bn, while Fitch flagged gross international reserves of USD 54.4 bn (the CBE’s broader net international reserves reached USD 57.35 bn in September).

The main fiscal constraint remains debt interest costs, though both project a gradual decline. S&P sees interest-to-revenue at 68% in FY 2025/26, easing to 60% in FY 2026/27 and 53% in FY 2027/28. Fitch expects a fall from 63% in FY 2025/26 to 52% in FY 2027/28.

The IMF program concludes in December; the eighth and final review unlocks the last USD 1.7 bn tranche. Neither agency expects a successor: S&P says a new IMF-supported program appears unlikely; Fitch sees no new disbursing program immediately afterward.

On the external position, S&P projects the current account deficit at 5.1% of GDP in FY 2025/26 and 5.0% in FY 2026/27; Fitch forecasts 5.1% in FY 2025/26 narrowing to below 3.5% by FY 2027/28. Both see high energy import bills weighing on the balance, partly offset by tourism, Suez Canal revenue, and remittances.

On inflation, S&P expects 12.9% in FY 2026/27, averaging 12% across the next two fiscal years before declining to 9% by FY 2028/29. Fitch projects inflation rising from 11.6% in FY 2025/26 to 12.3% in FY 2026/27, then falling below 10% in FY 2027/28. S&P sees the CBE keeping rates on hold, with persistent inflation limiting scope for monetary easing; Fitch expects the current policy mix, including positive real interest rates, to remain in place.

A big first bite

Retail investors put in orders for 29.9 mn of the 48 mn shares on offer (62%) on the first day of MNT Tech Holding for Financial Investments’ public tranche, Al Borsa reports, citing EGX order screens. That puts retail orders at roughly EGP 733 mn at the EGP 24.5 offer price, by our math. The 272-mn-share private tranche closes on 13 October, with no demand figures available yet.

REFRESHER- MNT priced the 320 mn secondary shares on offer (20% of the company) at EGP 24.5 apiece in a Financial Regulatory Authority (FRA) approved prospectus published Tuesday, valuing the company at EGP 39.2 bn and the base offering at EGP 7.84 bn. Institutional and high-net-worth investors have until 13 October to subscribe, and the retail book closes 15 October. The private tranche can be upsized to take the total to 400 mn shares (25% of the company), subject to FRA approval. CIB has committed up to EGP 2 bn as a cornerstone investor, and London-based Redwheel has signed on for about USD 20 mn. Founder and CEO Mounir Nakhla has said he expects trading to start on 20 October.

Room to grow

German tourism giant TUI Group is expanding its joint venture with Egyptian partner Travco, picking up a 600k sqm plot in Marsa Alam on the Red Sea coast for a hotel and tourism investment worth USD 69 mn, potentially rising to USD 85 mn in the first phase, a government official tells EnterpriseAM. The TUI-Travco JV will build three five-star hotels on the plot, adding 1.2k rooms under Travco’s Jaz Hotel Group, with construction costing a further USD 120-150 mn, Al Arabiya reports, citing unnamed sources.

More on the JV: The two companies are deepening a relationship that already includes shared hotel ownership, TUI’s 50% stake in Travco’s hotel portfolio, and the 50/50 Travco Travel joint venture. Travco Chairman Hamed El Chiaty also owns a 3.4% stake in TUI. The expansion pushes Travco’s Marsa Alam footprint to 14 hotels, adding to TUI’s existing presence in the area — TUI BLUE Samaya, which opened in Coraya Bay in May 2025.

IN CONTEXT- Travco now operates 68+ hotels and 18.9k rooms across Egypt, the UAE, Zanzibar, Tunisia, Greece, Morocco, and the Maldives, plus 28 Nile cruise ships, according to its website. In 2023, the group went on an EGP 3.5 bn acquisition spree that added two Pyramids-area hotels and six cruise ships. Last year, the group had another USD 162 mn wave of Jaz openings across Greater Cairo, the Red Sea, and the North Coast.

Data point

USD 57.35 bn — that’s where our net international reserves stood at the end of September, according to provisional Central Bank of Egypt data. That’s another record high, but the gain was just USD 133.6 mn from August’s USD 57.21 bn. It’s the fourth straight month where the increase has shrunk, after rises of USD 1.94 bn in June, USD 1.22 bn in July, and USD 920.6 mn in August.

The gas crunch gave Egypt every reason to speed up its energy transition, and the question now is who builds it and who pays for it.

Power Trip, our four-part signature series, turns this week to the transition and the private developers now building much of Egypt’s new power.

Issue II looks at how the deals behind these projects work, who is lending to them, and why the country is building a nuclear plant at El Dabaa alongside its solar and wind farms. We also look at whether the regional crisis has finally pushed industry toward renewables, and at the factories Egypt is counting on to build its own panels, batteries, and turbines.

Coming straight to your inbox on Wednesday, 14 October.

PSA-

WEATHER- Cairo is holding steady today, with a high of 30°C and a low of 20°C — more of the same settled autumn weather, according to our favorite weather app. Expect some morning fog and winds picking up through the day that could stir up some dust.

It’s the same story in Alexandria, with a high of 27°C and a low of 20°C.

The big story abroad

Chipmaking giant Nvidia is weighing a takeover of, or a bigger stake in, US AI startup Reflection AI, which builds open-weight models. Discussions are in their early stages and could result in an acqui-hire, among other options, wherein Nvidia would license technology and hire staff without fully acquiring the company, bypassing potential regulatory delays. Nvidia has already invested USD 800 mn in Reflection AI.

Russia has agreed to release 500k tons of diesel into international markets, without specifying a timeline, partially lifting its ban on diesel exports following an agreement between Russian President Vladimir Putin and US President Donald Trump. Effective Saturday, oil companies in Russia will negotiate export contracts with foreign buyers in coordination with the government.

Indian security forces locked down parts of Delhi yesterday to block a planned rally demanding the resignation of Chief Election Commissioner Gyanesh Kumar. Thousands of security personnel were deployed across the capital, and more than 2k protesters were detained, including the founder of the Cockroach youth movement that organized the demonstration. Protesters accuse Kumar of overseeing voter list revisions that critics contend unfairly favor Prime Minister Narendra Modi's ruling Bharatiya Janata Party.