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Monday, 15 May 2023

What We're Tracking Today
Privatization
Diplomacy
Earnings Watch
Moves
Last Night’s Talk Shows
Egypt In The News
Also On Our Radar
Planet Finance
Around The World
Blackboard
Calendar

The Enterprise Exports and FDI Forum is happening today

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Today at a glance

1

What We're Tracking Today

 The Enterprise Exports and FDI Forum is happening today at the Four Seasons Nile Plaza.
2

Privatization

 Gov’t raises EGP 3.75 bn after selling 9.5% stake in Telecom Egypt.
3

Privatization

 ADQ’s Agthia could be bidding for Safi.
4

What We're Tracking Today

 Egypt’s first gold fund launches today.
5

Moves

 Basel El Hini named non-executive chairman of Housing and Development Bank.
6

EARNINGS WATCH

 Qalaa revenues more than double in 2022 on record refining margins.
7

Also on our Radar

 Scatec to partner on USD 450 mn green methanol plant in Damietta.
8

Diplomacy

 New anti-Assad US legislation would prevent Egypt exporting gas to Lebanon.
9

AROUND THE WORLD

 Burhan freezes RSF accounts as fighting in Sudan continues.
10

BLACKBOARD

 How much — and where — the government plans to invest in education in the coming fiscal year.

Monday, 15 May 2023

What We're Tracking Today
Privatization
Diplomacy
Earnings Watch
Moves
Last Night’s Talk Shows
Egypt In The News
Also On Our Radar
Planet Finance
Around The World
Blackboard
Calendar
1

What We're Tracking Today

The Enterprise Exports and FDI Forum is taking place today

Good morning, dear readers: You know what time it is…

The Enterprise Exports and FDI Forum istaking place today at the Four Seasons Nile Plaza. The event will see CEOs, top execs, bankers, and development finance folks attempt to solve the biggest economic issue of our time: How do we get out of our FX crunch by boosting exports and raising foreign direct investment.

We are very grateful for the interest we’ve seen from many of you and we cannot wait to meet those attending.

The event kicks off with an 8am networking breakfast, with the opening panels starting at 9am.

Topics and live interviews will also include:

  • Why exports and FDI are the way forward and what lessons have worked from around the world;
  • How to attract foreign partners and figure out what they are looking for;
  • What lessons can we draw from food, fertilizers, and garments exporters who have increased our exports;
  • What are the fundamentals to creating an export and / or FDI strategy;
  • How industrial clusters could expedite exports and FDI and is a possibly avenue for SME development;
  • How Egypt’s industries need to be open to evolution to become more competitive.

Tap or click here to explore the full agenda.

** Attendees who have confirmed and RSVP'd to their personal invitations do not need a QR code to enter the venue, but please do bring a business card you can give us in exchange for your name tag and lanyard.

HAPPENING TODAY-

Egypt’s first gold fund launches today: Investors will be able to start buying into Azimut and Evolve Holding’snew gold investment fund from today, Financial Regulatory Authority (FRA) head Mohamed Farid said in an interview last night (watch, runtime: 1:07). The two asset managers, together with the FRA and the EGX, yesterday held a press conference to mark the launch of the fund, which is the first of its kind in Egypt.

The details: The fund will invest only in 24-carat gold bars and carries no minimum or maximum investment amount. Investment certificates worth as little as EGP 10 will be sold at Egypt Post branches. The imposes no minimum or maximum investments and allows subscribers to fully or partially redeem their certificates — either in cash or a minimum of 50 grams of gold. The fund was greenlit by the FRA earlier this month.

Gold prices make their debut on the EGX trading screens: The EGX yesterday started sharing spot prices for 24-carat gold on its trading screens, EGX boss Ramy El Dokany said.

The bourse will not set the prices itself, but just display the prices presented by Evolve Investment Holding’s Gold Net Trading, a precious metals trading platform.

The launch comes at a time of huge volatility in the gold market: Policymakers in recent weeks have started looking to put a ceiling over gold prices, which have soared to record highs amid the economic crisis. The price of 21-carat gold has fallen around 10% this month and was trading at EGP 2,380 yesterday.

HAPPENING THIS WEEK-

G7 meeting this week: Expect the war in Ukraine and China containment to be top of the agenda when G7 leaders meet in Hiroshima, Japan on 19-21 May.

Finance ministers aren’t exactly full of optimism ahead of the gathering: G7 finance ministers have called on governments to plug holes in global banking regulations amid “heightened uncertainty” triggered by the recent banking crisis and the global macro outlook, they said following their three-day ministerial ahead of this week’s summit. The FT has more.

ON THE HORIZON-

Egyptian-Saudi business forum in June: An Egyptian-Saudi business forum will take place in Cairo next month to promote investment opportunities between the two sides, the head of the Saudi-Egyptian Business Council’s Real Estate Committee, Fathallah Fawzy, told Al Shorouk.

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-

It’s a close-run thing in Turkey where yesterday’s presidential election is looking like it’ll go to a second vote. With almost all of the votes counted, neither incumbent president Recep Tayyip Erdogan or his main opponent, social democrat Kemal Kilicdaroglu, had won more than 50% of the vote — the threshold needed to claim victory and avoid a run-off.

The state of play before we sent out the newsletter this morning: Erdogan had won 49.3% of the vote and Kilicdaroglu 45.0% with more than 98% of ballots counted, according to Turkish broadcaster TRT.

(Associated Press | Reuters | Bloomberg | Financial Times | NYT | Washington Post | Wall Street Journal)

THE REALIGNMENT-

Iran’s foreign ministry wants better ties with Egypt:Iranian Foreign Minister Hossein Amir Abdollahian has expressed hope to resume full diplomatic relations with Egypt in an interview with Iranian media. “We have always welcomed the development of relations between Tehran and Cairo,” he said, voicing optimism that Tehran’s recent push to deepen ties with the Arab world would improve relations with Egypt.

A El Sisi-Raisi meeting in the cards? That’s according to one Iranian MP, who told Iranian media that there are preparations for the leaders to meet should the two countries reopen embassies. Fadahossein Maleki, who heads the parliament’s national security committee, told Tasnim News Agency that Iran and Egypt will restore diplomatic ties and reopen embassies in the near future. This comes a few days after a media report claimed that officials from both countries have been discussing normalizing ties since March. The Jerusalem Post also has the story.

This comes amid a wave of reconciliation in the region, which has seen Saudi Arabia and Iran sign an agreement to restore ties, and the Arab League welcome Syria, an ally of Tehran, back into the organization.

ICYMI-

Missed this week’s Inside Industry? In our weekly vertical exploring all things industry and manufacturing, we looked at the government’s fiscal plans for industrial development in the coming fiscal year.

COME WORK FOR OUR ADVISORY ARM-Enterprise Advisory (formerly known as Inktank Communications) is looking for smart, talented people to help us tell the stories of exciting companies. Enterprise Advisory is the region’s leading investor relations advisory company and works on investor and strategic communications issues that take you deep inside the c-suite. Our clients are in Egypt, Saudi Arabia, the UAE and beyond. Egyptian and foreign nationals alike are welcome to apply.

We’re running a four-month training program for fresh grads and career switchers and will hire every successful grad of the program.

Apply directly to jobs@enterprisemea.com and mention “advisory development program” in your subject line.

*** It’s Blackboard day: We have our weekly look at the business of education in Egypt, from pre-K through the highest reaches of higher ed.

In today’s issue: We look at the government’s fiscal plans for education in the coming fiscal year.

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The TriFactory's Somabay Endurance Festival returns for the fifth time from 25-27 May,bringing together Egypt's multi-sport community for an amazing weekend filled with swimming, cycling, and running throughout the beautiful scenery of Somabay. Select from six different races, Sign up now, and get ready to Experience Endurance.

2

Privatization

Egypt sells 9.5% of state-owned telco to investors. PLUS: ADQ’s Agthia bids for Safi

It’s official: TE stake sold. Egypt has got its privatization program up and running with the sale of a 9.5% stake in Telecom Egypt to institutional investors, the parties involved with the offering confirmed yesterday. The government raised nearly EGP 3.75 bn (USD 121.3 mn) after selling 162.2 mn shares in the state-owned telco for EGP 23.11 a piece — TE’s closing share price on Thursday, the EGX and the Finance Ministry said.

This is the first sale under the privatization program launched in February, under which the government aims to sell stakes in 32 companies by March 2024.

Demand was stronger than initially reported: The Finance Ministry’s accelerated bookbuilding process saw the secondary share sale covered 3.1x, it said in the statement.

We still don’t know who bought in: The government is yet to reveal which institutions purchased shares in the company. CI Capital — which acted as joint financial advisor and bookrunner on the transaction — said (pdf) that “international, regional, and domestic institutional and high-net-worth investors” subscribed, without disclosing further details.

Who bought in is important: Getting foreign investors on board with the privatization program is key if the government is going to use asset sales to address our acute shortage of FX. Selling to locals in EGP is fine if all you’re trying to do is get the state out of the economy, but does little to bring in fresh inflows of hard currency.

Now it’s TE employees’ turn: TE’s employees have until the end of the working day on 25 May to subscribe to the remaining 0.5% of the company (8.5 mn shares) earmarked for them in the second stage of the transaction. If the employee tranche is undersubscribed, the government has the option to sell any remaining shares to investors. Share transfers to employees will be executed by 1 June.

Advisors:Al Ahly Pharos andCI Capital acted as joint financial advisors and bookrunners alongside NI Capital, according to an FRA statement (pdf). Adsero Ragy & Partners were legal advisors to TE, while Zulficar & Partners acted as legal advisor on the transaction.

REMEMBER- The government aims to raise USD 2 bn via asset sales by the end of June. Together with the sale of Pachin to Dubai-based National Paints Holding, it has now reached some 7% (USD 147 mn) of that target.

ADQ IN FOR SAFI?

ADQ’s Agthia makes a bid for Safi: ADQ-owned Emirati F&B company Agthia is among several bidders for military-owned bottled drinks firm Safi, a source close to the transaction confirmed to Enterprise after the news was first reported by Al Borsa. The Madbouly cabinet last week said that both Safi and military-owned fuel retailer Wataniya would start receiving offers from strategic investors this month. The government has reportedly tapped CI Capital to market stakes of at least 10% in each firm to strategics.

Agthia isn’t new to our market: The company last year bought a 60% stake in Egyptian food company Auf Group, and in 2021 acquired 75% of Atyab brand owner Ismailia Agricultural and Industrial Investments.

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3

Diplomacy

New anti-Assad US legislation would prevent Egypt exporting gas to Lebanon

US draft bill targets Lebanon gas plan as part of new anti-Assad sanctions: Draft US legislation aimed at preventing countries from normalizing ties with the Syrian government would make it harder for Egypt to export natural gas to Lebanon under a plan agreed in 2021. Introduced by bi-partisan lawmakers last week, the bill (pdf)would enable the US government to impose sanctions on Egypt should it go through with the plan, which involves using a pipeline to ship gas through Syria to Lebanon to ease the country’s chronic energy shortages.

The plan: Egypt, Lebanon, Syria and Jordan agreed two years ago to bring online the Arab Gas Pipeline that links the four countries to ship Egyptian gas to Lebanon. In order to avoid existing US rules blocking countries doing business with Syria, Damascus would not receive a financial payout but would be entitled to use a portion of the gas that transits its territory.

But this kind of transaction would be deemed illegal under the new bill: Governments making in-kind transactions with the Syrian government would be exposed to US sanctions, as would anyone involved in a “significant transaction,” which the bill describes as “any natural gas, electricity, or other energy-related transactions”.

Washington has always been unsure about the idea: Although it has voiced support for the initiative in the past, the US is yet to provide assurances to Egypt that it won’t face sanctions if it uses the pipeline to ship gas to Lebanon.

Why now? The authors of the legislation want to push back on regional efforts to normalize ties with Damascus. The Arab League earlier this month voted to reinstate Syria as a member, 12 years after it was expelled following its crackdown on Arab Spring protesters, while some Arab countries such as Egypt and Saudi Arabia are working towards reestablishing full diplomatic ties with Assad.

In another effort to dissuade governments from getting close to the Assad government:

The legislation would allow sanctions to be imposed on any airport that allows Syrian Arab Airlines and private airline Cham Wings to land planes.

ALSO FROM THE DIPLO SPHERE-

Egypt gets plaudits for mediating Gaza ceasefire: Officials from the UN (pdf), EU, US, Palestine and Israel have thanked Egypt for brokering a truce between Islamic Jihad and Israel, which ended five days of fighting between the two sides on Saturday.

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4

EARNINGS WATCH

Qalaa revenues more than double in 2022 on record refining margins. PLUS: CIB, ODE report 1Q23 earnings

Qalaa Holdings reports growing revenues but remains in the red in 2022: Investment firm Qalaa Holdings’ saw its revenues more than double y-o-y to EGP 97.7 bn in 2022 — but still booked a net loss after minority interest of EGP 2.3 bn in 2022, on par with the previous year, according to its earningsrelease(pdf). The strong topline performance — including record refining margins at subsidiary Egyptian Refining Company (ERC) — was offset by the depreciation of the EGP, which caused the company EGP 4.7 bn in FX losses, Qalaa said.

On a quarterly basis: Qalaa returned to the red in 4Q after booking its first two profitable quarters since 2018 in 2Q and 3Q. The company’s net loss after minority interest nearly doubled y-o-y to EGP 2.1 bn in the last quarter, while revenues jumped 90% y-o-y to EGP 28.3 bn.

In detail: ERC’s revenues surged 162% to EGP 74.7 bn in 2022, accounting for more than 76% of the firm’s topline for the year. Higher refined petroleum product prices and increased operations efficiency saw gross refining margins more than triple to an average of USD 4.5 mn per day in 2022. Energy subsidiary Taqa Arabia’s revenue grew 18% y-o-y to EGP 10.7 bn on the back of rising energy demand across all the company’s business lines.

What they said: “I am exceedingly proud of Qalaa’s topline performance during the past year, which demonstrated the group’s resilience and ability to continue delivering solid results despite the difficult underlying macroeconomic conditions,” said Qalaa Chairman Ahmed Heikal. “All our business segments have recorded solid performances throughout the past year, having successfully managed to capitalize on elevated oil prices, an increased focus on local manufacturing and import substitution, and a portfolio structure that provides a strong shield against devaluation pressures.”

RISING RATES BOOST CIB EARNINGS-

Leading private-sector bank CIB reported a 43% increase in net income in 1Q 2023 as higher interest rates boosted revenues, according to its latest earnings release (pdf). The lender reported a bottom line of EGP 6.1 bn for the January-March period, up from EGP 4.2 bn in 1Q 2022. The growth was supported by sharply higher net interest income, which jumped 62% y-o-y to EGP 10.9 bn during the quarter, lifting total revenues to EGP 12.0 bn, up 54% y-o-y.

Remember: Interest rates have surged over the past year as the central bank tries to shore up the economy from the inflationary impact of multiple currency devaluations. Central bank rates are now 1000 bps higher than they were last March.

Deposits and loans rose: The bank’s gross loan portfolio rose 10% to EGP 244 bn during the quarter while higher EGP deposits fueled 8% growth in the bank’s total deposits, which reached EGP 574 bn.

A promising 2023 ahead: “Despite the ambiguity witnessed on a global, regional and local scale, CIB’s performance is nothing short of exemplary,” the bank’s management said, adding that the net income and revenue growth helped “set the stage for what promised to be a very strong 2023.”

ODE PROFITS DOWN ON FX LOSSES-

Orascom Development Egypt’s (ODE) net income dropped 17% y-o-y to EGP 384 mn during 1Q 2023 on the back of EGP 477.7 mn in FX losses due to the EGP devaluation, according to the company’s latest earnings release (pdf). Revenues increased 53% y-o-y to EGP 3 bn during the quarter.

Net real estate sales increased by 36% y-o-y to EGP 2.7 bn, marking the highest 1Q sales figure in the company’s history. The company’s El Gouna development drove the growth with EGP 1.15 bn, followed by O West in West Cairo (EGP 1.1 bn), and Makadi Height (EGP 490.3 mn).

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5

Moves

Basel El Hini made non-exec chairman of Egypt’s Housing and Development Bank -local media

Housing and Development Bank has appointed former Misr Ins. Holding chairman Basel El Hini (LinkedIn) as non-executive chairman and reappointed chairman and managing director Hassan Ghanem, Youm7 reported. El Hini has over 40 years of experience in the commercial and investment banking sector, most notably as managing director of Banque du Caire and Naeem Financial Investments. El Hini resigned from his position as chairman and managing director at Misr Ins. Holding in January.

EGX-listed Arab Company for Asset Management and Development (ACAMD) hasappointed board member Mohamed Abu Zaid Ibrahim as executive vice president and managing director of the firm, succeeding Ali Abu Zaid Ibrahim, it said in a bourse disclosure (pdf). Former executive chairman Hani Abdel Latif Olama (bio) will continue to chair the board in a non-executive role.

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6

LAST NIGHT’S TALK SHOWS

The National Dialogue, Telecom Egypt and East Owainat lead the talk shows

It was a mixed bag on the airwaves last night, with the first day of the National Dialogue, the Telecom Egypt stake sale, and the president’s visit to East Owainat all getting lots of attention from the nation’s talking heads.

It was the first day of the National Dialogue yesterday, which featured four sessions focusing on the electoral system and discrimination, each of which was attended by around 600 people, lawyer Essam Shiha told Kelma Akhira’s Lamees El Hadidi (watch, runtime: 10:43). Two sessions were concerned with choosing the best electoral system for the upcoming parliamentary elections, which saw a large number of political parties attend. The discussion ended with split votes. The other two sessions were focused on discrimination in education and health due to religion or race, he said. Ehab Al Tamawi, member of the dialogue’s political parties subcommittee, joined Masa’a DMC (watch, runtime: 5:15) to give his two cents on the sessions.

The TE stake sale continued to get attention: The government finalized the sale of a 9.5% stake in Telecom Egypt (TE) yesterday, raising EGP 3.75 bn. “It is clear that the purpose of the sale is for the government to prove how serious it is about the privatization program … and that it is flexible when it comes to the selling price,” El Hadidi said (watch, runtime: 7:02). “We need to see actual steps in the government backing out of the economy and more private-sector participation,” she added.

Everyone is asking: Who bought in? The state is yet to disclose the buyers behind the TE transaction but it needs to make the information public soon given TE is a listed company, El Hadidi said. “According to EGX regulations, when a company sees a change in its shareholders it needs to share an update with the new shareholders list,” Egyptian Capital Market Association VP Ayman Sabry told El Hadidi (watch, runtime: 4:27). FRA head Mohamed Farid also commented on the sale during an interview with El Hekaya’s Amr Adib (watch, runtime: 3:16).

A golden debut: Amr Adib dedicated most of his interview with Farid to discussing the launch of Azimut and Evolve Holding’s gold-backed investment fund, which was officially unveiled yesterday (watch, runtime: 12: 07 | 1:07 | 3:19). We have more information in this morning’s What We’re Tracking Today, above.

El Sisi’s visit to East Owainat got some airtime: President Abdel Fattah El Sisi yesterday inaugurated (watch, runtime: 2:45:20) the wheat harvest season at the military’s East Owainat desert reclamation project in the Western Desert. The project, located in the south-west of the country, is Egypt’s second largest wheat production site, producing around 3 mn tons of wheat every year. Egypt is working to cultivate 700k acres of wheat in East Owainat and Toshka this year, all of which will use smart irrigation, El Hadidi said (watch, runtime: 4:39). Ala Mas’ouleety (watch, runtime: 5:14) and Masa’a DMC (watch, runtime: 6:44) also had the news.

The government has so far bought more than 2 mn tons of local wheat since the start of the harvest season at the beginning of April, Supply Minister Ali El Moselhy said, taking it a third of the way to its 6-mn-ton target for the season. El Moselhy also added that the government currently has enough wheat reserves to cover five months and sugar to cover 10 months.

ALSO FROM THE EVENT- Australian food processing company TNA Australia is looking to further invest in Egypt, the company’s managing director said during the event, according to Al Borsa.

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7

EGYPT IN THE NEWS

The Telecom Egypt stake sale is leading foreign press coverage

Dominating the conversation on Egypt this morning: The Telecom Egypt stake sale, which we cover in depth in this morning’s news well, above. (Reuters |Bloomberg | The National)

Also making headlines:

  • The US doesn’t want the Russians using our airspace: Egypt has turned down requests by the US to block the Russian air force from using its airspace, Egyptian and US officials reportedly say. (Wall Street Journal)
  • The journey north: The foreign press is still focusing on the plight of Sudanese refugees fleeing the ongoing conflict into Egypt. (Washington Post)
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8

Also on our Radar

Scatec to partner with Egyptian firm on USD 450 mn green methanol plant

PETROCHEMICALS-

Scatec on board for green methanol plant: Norwegian renewables producer Scatec and Alexandria National Refining & Petrochemicals Company (ANRPC) have signed an agreement to work on a USD 450 mn green methanol plant in Damietta, the Oil Ministry said Sunday. The facility will initially produce 40k tons of green methanol a year, before increasing to 200k tons.

REMEMBER- Scatec has emerged as a key player in Egypt’s energy sector, partnering on the country’s first green hydrogen plant with Fertiglobe, Orascom Construction, and the Sovereign Fund of Egypt (SFE). The Norwegian company plans to sign a joint development agreement for a USD 5.5 bn green ammonia plant in Ain Sokhna with Egyptian Petrochemicals Holding Company and state fertilizer company Mopco.

Major petrochem complex could get fast-tracked: The government is willing to grant a goldenlicense to or otherwise help expedite the USD 2.5 bn petrochemical complex that Anchorage Investments hopes to build in the Suez Canal Economic Zone, Prime Minister Moustafa Madbouly said in a meeting with Suez Canal Authority boss Osama Rabie and Anchorage founder and MD Ahmed Moharram, per a cabinet statement. The project would be built over a 36-month period and aims to export USD 1.5 bn worth of petrochems in its first phase of operations, the statement read.

INFRASTRUCTURE-

North Coast infrastructure projects put on hold amid FX rationing: An ongoing shortage of hard currency has led the government to postpone a tender for an EGP 1 bn electricity control center in Alexandria, as well as plans to expand several housing developments in New Alamein City, according to two separate reports by Al Mal (here and here), citing sources it says are in the know.

REMEMBER- The Madbouly cabinet in January announced new curbs on construction spending as part of a package of cutbacks aimed at alleviating the country’s shortage of foreign currency.

COMMODITIES-

EMX increases limit on corn trading 10x: The Egyptian Mercantile Exchange (EMX) has raised the limit on corn trading to 1k tons from the previous limit of 100 tons in response to requests from the Egyptian Poultry Association, Al Borsa reports, citing statements from Assistant Supply Minister Ibrahim Ashmawy. State grains buyer GASC began selling yellow corn to poultry feed factories via the exchange last month.

SHIPPING-

SCZone to launch ship supply services within days:Bunkering service vessels arrived at Port Said port yesterday and are expected to launch their services within days, the Suez Canal Economic Zone said yesterday. This move is a part of Egypt’s plan to become a one-stop shop in the region for providing services for ships including bunkering and catering.

Who are the firms? The bunkering licenses were granted to Coral Energy, Minerva Bunkering, and Peninsula companies in February 2022 for one year only. Renewal is contingent upon the firm’s performance review. The three firms were awarded four licenses — two on the Red Sea and two on the Mediterranean — following a tender in February.

STARTUPS-

Egyptian automotive startup Helpoo receives investment from Saudi firm: Saudi-based automotive services provider Morni Holding has acquired an undisclosed stake in Egyptian startup Helpoo, Morni advisor Exits said in a press release (pdf) on Monday, without disclosing the value of the transaction. Helpoo — which offers tech-enabled car ins. and roadside assistance services — will use the investment to expand its operations and launch new projects, and will also get technical support from Morni.

ICYMI- Morni wants to deploy USD 10 mn by the end of the decade to make acquisitions in Egypt, Exits told us last year.

Ready, set, race:Racemate— an app that offers personalized and real-time pacing strategies, audio guidance, and live tracking features for participants in running events — last month expanded to Dubai, according to a company press release (pdf). The app was launched in 2021 by local sports event management company TriFactory and software developer Optomatica. It has been used in a dozen races across the country and plans to continue expanding here and across the MENA region.

PHARMA-

Evonik meds are coming to Egypt: German specialty chemicals company Evonik Industrieshas teamed up with French distributor Safic-Alcan to export its nutraceutical products to Egypt, it said in a press release (pdf) last week. Under the agreement, Safic-Alcan will distribute Evonik immunity, nutricosmetic, and brain and cardiovascular products in Egypt.

WASTE MANAGEMENT-

EU funding for the circular economy: The Environment Ministry last week launched the second phase of the EU-funded SwitchMed initiative, which aims to promote sustainable consumption and the circular economy in Southern Mediterranean countries, the Environment Ministry said last week. The program is focusing on making supply chains for the local textile industry more sustainable and reducing single-use plastics.

SOUND SMART- The circular economy is a business model that tries to limit waste and puts sustainability at the heart of production and consumption. Reusing and recycling waste, limiting pollution, and regenerating natural environments are all key “circular” concepts.

DEVELOPMENT FINANCE-

Gov’t, UN to continue working on Upper Egypt development: The International Cooperation Ministry and the UN yesterday launched a new phase of the Egypt Network for Integrated Development (ENID) for 2023-2027, the ministry said in a statement. Started in 2012, ENID is focused on upgrading basic services, promoting MSMEs and developing sustainable agriculture in Upper Egypt.

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9

PLANET FINANCE

Saudi non-bank lender Morabaha kicks off small IPO in Riyadh

This Saudi company just kicked off its micro-IPO: Saudi non-bank lender Morabaha Marina Financing Company wants to raise up to USD 83.4 mn in its IPO on the Saudi stock exchange, it said in a statement (pdf) yesterday announcing the pricing of its shares. The company is selling 21.4 mn shares — around 30% of the company —- on the Tawadul and has set a price range of SAR 13.0-14.6. The final price will be announced next Sunday following the institutional book building process, which kicked off yesterday. The subscription period for individual investors will take place between 28-29 May. The company is yet to disclose when it will start trading on Tadawul.

The news comes a day after we suggested that the Gulf IPO boom is running out of steam following news at the weekend that ADES International and Aramco’s energy trading arm are both postponingtheir listing plans due to current market conditions. Falling oil prices have taken the air out of last year’s bull run in Riyadh, causing the exchange to fall 16% from its high last May.

Did we speak too soon? There’s a big difference between Morabaha’s USD 83 mn listing and the multi-bn USD share sale expected for Aramco Trading, which reportedly doesn’t feel like that market can currently support such a large IPO.

EGX30

17,369

+0.6% (YTD: +19.0%)

USD (CBE)

Buy 30.84

Sell 30.96

USD at CIB

Buy 30.85

Sell 30.95

Interest rates CBE

18.25% deposit

19.25% lending

Tadawul

11,348

-0.4% (YTD: +8.3%)

ADX

9,635

-0.4% (YTD: -5.6%)

DFM

3,559

-0.3% (YTD: +6.7%)

S&P 500

4,124

-0.2% (YTD: +7.4%)

FTSE 100

7,755

+0.3% (YTD: +4.1%)

Euro Stoxx 50

4,318

+0.2% (YTD: +13.8%)

Brent crude

USD 74.17

-1.1%

Natural gas (Nymex)

USD 2.27

+3.5%

Gold

USD 2,019.80

0.0%

BTC

USD 26,936

0.0% (YTD: +62.7%)

THE CLOSING BELL-

The EGX30 rose 0.6% at yesterday’s close on turnover of EGP 1.83 bn. Local investors were net sellers. The index is up 19% YTD.

In the green: Credit Agricole (+11.1%), ADIB (+8.9%), and CIRA Education (+7.7%).

In the red: Juhayna (-4.2%), Egypt Kuwait Holding (-3.0%), and Ibnsina Pharma (-2.4%).

Asian markets are starting the week in the red this morning and oil prices are continuing to decline amid concerns about the health of the global economy. US stocks are on course to open lower while European equity futures are currently in the green.

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10

AROUND THE WORLD

Burhan freezes RSF accounts as fighting in Sudan continues

War in Sudan hits the one-month mark: Sudan’s factions carried on with their fighting yesterday despite ongoing peace talks and an agreement to protect civilians. Reuters reported air strikes hitting the country’s most populous city, Omdurman, and shelling in the north of the capital Khartoum. The fighting has killed 676 people and injured around 5.6k others as of 11 May, according to UN data.

The opposite of an olive branch: Head of the Sudanese army and the country’s de facto leader General Abdel Fattah Al Burhan has frozen the bank accounts of the Rapid Support Forces (RSF) and its companies, the army said in a statement yesterday.

Some 153k Sudanese have fled the country since the fighting first broke, according to UNdata. The majority of refugees — 76k Sudanese and 5k foreigners — fled to Egypt, according to the data, which was last updated on 10 May. Chad has taken in 60k and the Central African Republic 6.3k.

PAKISTAN DEBT TROUBLES-

Pakistan needs to secure “significant additional financing” -IMF: Indebted Pakistan needs more financing in order to ensure the success of the IMF’s long-awaited ninth review to unlock USD 1.1 bn in funding that has been stalled since November. “Significant additional financing is essential to support the authorities’ policy efforts and to ensure successful completion of the ninth review,” IMF director of communication Julie Kozack said during a presser last week.

REMEMBER- The funding, part of the USD 6 bn bailout agreed with the IMF in 2019, was due to be released last year but has been delayed after the country failed to meet some of the conditions. Moody’s is now warning that without IMF funding Pakistan could default later this year.

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Our weekly deep dive into education in Egypt, from K-12 to post-secondary.

Published every Monday in EnterpriseAM.

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BLACKBOARD

How much — and where — Egypt plans to invest in education in the coming fiscal year

What the government has in store for education investment and spending in FY 2023-24:Last week, Planning Minister Hala El Said laid out the government’s sustainable development plan for FY 2023-24 in an address to the House of Representatives, while Finance Minister Mohamed Maait presented the draft state budget for the upcoming fiscal year. The sustainable development plan — which the ministry issues every year to work towards Egypt Vision 2030 — covers planned government spending on several key sectors, including education, infrastructure, the green economy, and manufacturing.

Education, higher education, and scientific research spending accounts for 23.1% of the EGP 3 tn planned for spending next year, with some EGP 691.5 bn earmarked across these three areas. That figure is c.24.5% higher than the government’s spending budget for these areas in FY 2022-23.

Focus on plugging teacher shortages continues: The upcoming fiscal year’s investment budget largely picks up where the current fiscal year’s budget will leave off — with a chunk of spending going towards plugging shortages of teachers and classrooms across the country, according to a Planning Ministry statement. Spending on educators’ wages is also set to come in at a total of EGP 2.99 bn, according to the state budget. The budget expects to see the government hiring 13k additional teachers annually, at a cost of EGP 1.4 bn per annum, according to the document Maait presented to the House of Representatives last week.

REFRESHER- Why are there shortages in the first place? Egypt’s K-12 teachers generally face a host of challenges, including low salaries and a lack of necessary qualifications, research has shown (pdf). Teacher training is especially challenging, as the education system often values academic prestige over the practical skills that would help teachers become better educators.

And there’s spending going towards building out education infrastructure: The government’s sustainable development strategy for the upcoming fiscal year aims to construct and develop 14k classrooms, according to El Said’s statement to the House of Representatives. The strategy will also look to improve the quality of K-12 education across 39 classrooms, comprising 823 classrooms, including 31 Japanese schools, five schools for gifted students, and three state-run international schools, the minister said. As for higher education, the strategy plans to prepare and outfit 16 civil universities, including El Galala University, El Alamein University, King Salman International University, and New Mansoura University.

Tablets are getting more investments: The strategy plans to improve the educational sector’s infrastructure quality by offering 700k tablets and 1k smart screens to schools and students in the public education system. Tablets and electronic exams were a crucial component of former Education Minister Tarek Shawky’s plan to overhaul Egypt’s K-12 education system, which was modeled in part after the education systems of Japan and Finland. The sustainable development strategy statement does not specify how much the government expects to spend on the new tablets. The Education Ministry had tapped Samsung back in 2018 to supply 1 mn educational tablets for that academic year under a USD 240 mn contract.

What we’re not sure of: How much of these allocations are going towards scientific research. A big hindrance for our research landscape has been a lack of funding, as we’ve previously reported. Global rankings for our universities are typically held back by more scientific research output.

Your top education stories for the week:

  • An electronic portal for higher education equivalency certificates is now available in Egypt.
  • Education spending will increase by19% to EGP 229.9 bn in FY 2023-2024.
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CALENDAR

APRIL

Late April – 15 May: 1Q2023 earnings season.

MAY

12-15 May (Friday-Monday): Egypt Fashion Week.

15 May (Monday): Enterprise Exports & FDI Forum, Four Seasons Hotel Cairo at Nile Plaza.

16 May (Tuesday): National Dialogue session.

16-18 May (Tuesday-Thursday): Egypt will host its first conferenceon cybersecurity and defense intelligence systems (CDIS-Egypt).

17-31 May (Wednesday - Wednesday): Second round of applications for sixth phase of export subsidy program.

18 May (Thursday): National Dialogue session.

18 May (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

19 May (Friday): Arab League summit, Riyadh.

19-21 May (Friday-Sunday): G7 summit, Hiroshima, Japan.

20-21 May (Saturday-Sunday): eGlob Expo, St. Regis Almasa Hotel, Cairo.

21 May (Sunday): Senate to reconvene.

22-26 May (Monday-Friday): Egypt will host the African Development Bank (AfDB) annual meetings in Sharm El Sheikh.

28 May (Sunday): House to reconvene.

29 May (Monday): IEF-IGU Ministerial Gas Forum, Cairo.

30 May (Tuesday): Listed companies have until this date to report and publish their 1Q results.

JUNE

June: Indian representatives to discuss prospect investments in the Suez Canal.

June: Egyptian-Saudi business forum.

3-4 June (Saturday-Sunday): OPEC+ meeting, Vienna.

7-10 (Wednesday-Saturday): The second edition of Africa Health Excon.

10 June (Saturday): Thanaweya Amma examinations begin.

12 June - 15 July (Monday-Saturday): Thanaweya Amma exams.

13-14 June (Tuesday-Wednesday): Federal Reserve interest rate meeting.

15 June (Thursday): Deadline for bids in EGPC’s mature oil fields tender.

19-20 June (Monday-Tuesday): The forum for insolvency reforms and corporate restructuring in the Middle East and North Africa.

19-21 June (Monday-Wednesday): Egypt Infrastructure and Water Expo debuts at the Egypt International Exhibition Center.

22 June (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

28 June-2 July (Wednesday-Sunday): Eid El Adha (TBC).

30 June (Friday): June 30 Revolution Day.

30 June (Friday): Egypt to exit Grains Trade Convention.

JULY

1 July: House of Representatives deadline to approve the FY 2023-2024 budget.

1 July: GAFI to launch the country’s first integrated electronic platform to facilitate setting up a business.

5 - 6 July (Monday - Tuesday): Gov’t to pay out subsidies to first wave of applicants under its sixth export subsidy program.

18 July (Tuesday): Islamic New Year.

19 - 20 July (Wednesday - Thursday): Gov’t to pay out subsidies to second wave of applicants under its sixth export subsidy program.

20 July (Thursday): National holiday in observance of Islamic New Year (TBC).

23 July (Sunday): Revolution Day.

25-26 July (Tuesday-Wednesday): Federal Reserve interest rate meeting.

27 July (Thursday): National holiday in observance of Revolution Day.

Late July-14 August: 2Q2023 earnings season.

AUGUST

August: Hassan Allam Utilities + Agility to open Yanmu East logistics park.

2 - 3 August (Wednesday - Thursday): Gov’t to pay out subsidies to second wave of applicants under its sixth export subsidy program.

3 August (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

10 August (Thursday): Shalateen Mineral Resources gold mining tender closes.

22-24 August (Tuesday-Thursday): BRICS summit, Johannesburg, South Africa.

SEPTEMBER

September: Sustainable Debt Coalition Initiative agreed at COP27 to launch.

9-10 September (Saturday-Sunday): G20 summit, New Delhi, India.

15 September (Friday): IMF to review USD 3 bn program.

19-20 September (Tuesday-Wednesday): Federal Reserve interest rate meeting.

21 September (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

21-23 September (Thursday-Saturday): Narrative PR Summit, Somabay.

25 September (Monday): Nasdaq deadline for Swvl Holdings Corp to increase its market value of publicly held shares to a minimum of USD 15 mn.

26 September (Tuesday): Prophet Muhammad’s birthday (TBC).

28 September (Thursday): National holiday in observance of Prophet Muhammad’s birthday (TBC).

OCTOBER

October: Deadline for ins. providers to link their databases with the FRA.

2-5 October (Monday-Thursday): ADIPEC 2023, Abu Dhabi National Exhibition Center.

6 October (Friday): Armed Forces Day.

13 October- 20 October (Friday-Friday): The sixth edition of El Gouna Film Festival (GFF).

Late October-14 November: 3Q2023 earnings season.

26 October (Thursday): Daylight saving time ends.

31 October - 1 November (Tuesday-Wednesday): Federal Reserve interest rate meeting.

NOVEMBER

November: Cairo to hostIntra-African Trade Fair.

2 November (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

15-24 November (Wednesday-Friday): Cairo International Film Festival, Cairo.

DECEMBER

12-13 December (Tuesday-Wednesday): Federal Reserve interest rate meeting.

21 December (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

EVENTS WITH NO SET DATE

2023: The inauguration of the Grand Egyptian Museum.

2023: Egypt will host the Asian Infrastructure Investment Bank’s Annual Meeting of the Board of Governors in 2023.

Summer 2023: EGX to launch a shariah-compliant index.

1H 2023: GAFI roadshow set to launch to drum up foreign investment for golden licenses

1H 2023: Abu Dhabi Islamic Bank intends to launch a digital consumer finance company

2H 2023: Egyptian government expected to sign agreements with a consultant for the EuroAfrica electricity interconnector.

2H 2023: President Abdel Fattah El Sisi and Turkish President Recep Tayyip Erdogan expected to hold a summit.

4Q 2023: EGX to launch its new futures exchange.

End of 2023: A Developments’ first phase of the Lazoghly development completed.

November 2024: Egypt to host the 12th session of the World Urban Forum (WUF12).

2Q 2025: Safaga Terminal 2 to initiate operations.

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