Egyptian inflation accelerates to 32.7% in May

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What We're Tracking Today

THIS MORNING: IMF says talks are “encouraging,” expects progress within weeks on economic reform agenda. PLUS: Citigroup banks on FX stability until September

Good morning, wonderful people, and a very happy Sunday. We have a packed issue to start the week, with encouraging sounds on economic reforms including the privatization program and lots of fresh industrial investment. But first, we’re excited to announce:

The Enterprise Finance Forum is our flagship gathering — the one so many of you have been waiting for. The two-day event takes place this September. Stay tuned for more information on the location.

This flagship forum is the latest in our must-attend series of invitation-only, C-suite-level gatherings that allow senior members of our community to openly and frankly discuss critical issues in key sectors of the economy.

Day one is our Banking Forum, where we’ll dive deep into topics of interest to commercial and investment bankers, from an outlook on the 12 months to come in M&A, IPO, and debt capital markets to the national, regional, and global trends that are (re)shaping our industry.

Day two is all about Fintech and Non-Banking Financial Services. We’ll take a deep dive into everything from the magic of client acquisition to the prospects of consolidation and the coming of challenger banks.

WHY ATTEND? Our guests consistently tell us they attend for two reasons: (1) meaningful discussion of the issues that shape the future of their businesses and (2) an unparalleled chance to network with other senior members of the community.

** NEW: MORE NETWORKING TIME- Our agenda includes expanded networking time, including an expanded coffee break and a post-event networking room for you to interact with your peers and speak one-on-one with the team at Enterprise.

WHO SHOULD ATTEND? Everyone who plays a role in our industry, from commercial and investment bankers to asset managers, fintech founders, NBFS leaders, and professional services providers of all stripes. Attendees at our events are C-suite officers, business owners, and their direct reports; we also make an allocation for folks we think could be tomorrow’s founders and c-suite executives.

TAP OR CLICK HEREif you want to express interest in attending. We’ll be sending out the first batch of invitations just after the 30 June holiday.

Do you want to become a commercial partner? Email mtaalab@enterpriseadvisory.com.

STAY TUNED for more detail about our exciting agenda in the weeks to come.

The BIG STORY here at home this morning is the positive sounds on our economic reform agenda — not least from the IMF: Talks between the IMF and local officials are “encouraging” and the Fund expects to see the government achieve “concrete results that will work to restore confidence” in its economic reform package “over the course of the next several weeks,” IMF Deputy Managing Director Antoinette Sayeh has said in an interview with Kelma Akhira’s Lamees Al-Hadidi (watch, runtime: 31: 52). Sayeh said she expected the positive developments to speed up the review of the next stage of our USD 3 bn assistance package with the Fund, without saying when she expected to see progress.

News brewing on state asset sales + FDI: Private equity outfit Actis and Malaysian power company Edra could be vying for one of our USD 2 bn Siemens power plants; the Port Said terminal operator is set to sell a 20% stake on the EGX; and a Saudi-Egyptian investor is on the verge of snapping up a 70% stake in a state-owned glassmaker. We have more on all that — as well as May’s inflation figures — in the newswell, below.

REMEMBER- Originally scheduled for mid-March, the IMF has postponed the first review of Egypt’s loan program due to delays implementing several of its key conditions. Under the USD 3 bn facility, Egypt committed to adopting a fully flexible exchange rate and accelerating its privatization program as a means to ending the prolonged FX crunch. The government aims to raise USD 2 bn via asset sales by the end of this month.

The IMF’s Sayeh is today expected to attend the launch of an IMF paper.

ALSO HAPPENING TODAY-

It’s Budget Week in the House: Our elected representatives will discuss the FY2023-2024 budget, and the economic and social development plan today through to Tuesday. The General Assembly could hold a final vote on Tuesday. The Senate approved the FY 2023-24 development plan last week.

The National Dialogue resumes its sessions today after a two-week long break. Participants will discuss the size of the country’s two legislative chambers and the Freedom of Information Act, according to a statement by the organizers.

There are more sessions coming up this week: On Tuesday, the Dialogue’s committees will discuss public investment priorities and ownership and management of state assets, as well as support for the agriculture industry. Thursday’s sessions will focus on healthcare and the new national health ins. system, and youth entrepreneurship.

Good luck, high school seniors (and parents): Thanaweya Amma exams kick off today and run through mid-July. Best of luck to all those entering exam halls or cheering on from the school gates.

EGP WATCH- The Central Bank of Egypt is unlikely to devalue the currency until September at the earliest as economic pressure eases on the back of expectations for bumper tourism revenues and increasing positivity about the privatization program, a senior analyst at Citigroup told Bloomberg in an interview. The US bank has adopted “a more positive view” on the EGP and the country’s USD bonds in the short-term and now sees policymakers waiting until September — when the IMF is expected to review the USD 3 bn loan program — before making a decision on the currency, Luis Costa, global head of emerging-market sovereign credit at Citigroup, told the news outlet.

What the markets are saying:

Easing currency pressure: Three-month non-deliverable forwards climbed 1% to 33.20 on Thursday. The contract had its best month in more than six years in May, gaining 9% during the month.
Debt nerves have calmed: The spread between Egypt’s USD bonds and US treasuries has narrowed about 350 points since the middle of May when it reached a record high of 1,486 points. Investors consider yield spreads of 1000+ bps as being an indicator of debt distress.

Moving the markets: Sentiment on Egypt picked up in May on signals that the government is beginning to make progress on its privatization agenda. The government made its first sales during the month — the sale of Pachin and the divestment of a 10% stake in Telecom Egypt — while a spate of unconfirmed press reports hinted that more could be on the way in the coming weeks. Telecom Egypt’s stake in Vodafone Egypt, military-owned firms Wataniya and Safi, and petro firms Egyptian Linear Alkyl Benzene (Elab) and the Egyptian Drilling Company have all been namechecked in recent pieces reporting progress in ongoing negotiations. Meanwhile, the central bank appointed Barclays to join CI Capital on the team of advisors taking the lead on the sale of United Bank, one of the three lenders among the 32 state institutions and companies earmarked for privatization in February.

Going forward: Costa expects the currency to remain “reasonably stable” over the next two months before falling to 36.00 to the USD by the end of December and 37.00 in 2023. The official USD-EGP rate has remained at 30.90 since the middle of March.

CORRECTION-

In Thursday’s edition of EnterpriseAM, we incorrectly wrote that Swvl had received the first license to operate smart transport links between Greater Cairo and the new capital. In fact, the company received the country's first ride-hailing license after new regulation was brought in for the sector. The story has since been updated on our website.

THE BIG STORY ABROAD-

Donald indicted: The US Justice Department on Friday indicted former US president Donald Trump on 37 counts, including mishandling classified documents and making false statements. He is set to appear in a Miami federal court on Tuesday, marking the first time a US former president has faced federal criminal charges. The charges don’t prevent the current Republican frontrunner from running for president again. Trump denounced the indictment as a “travesty of justice” and a “witch hunt” against him and his supporters. (Associated Press| Reuters | Bloomberg| Financial Times | New York Times | Washington Post | Wall Street Journal | CNBC)

THE REALIGNMENT-

A big week for Saudi-China ties: Some 2k Chinese business leaders and investors will descend on Riyadh today for the Arab-China Business Conference as the two countries look to deepen economic ties, Reuters reports, citing a source it says has direct knowledge of the matter. The two-day event will see Arab and Chinese entrepreneurs discuss business opportunities across a range of sectors, including energy, AI, finance and logistics.

FYI- This is the first edition of the event since Chinese leader Xi Jinping made his self-described“epoch-making” visit to the country last year, and comes a few days after US Secretary of State Antony Blinken was in the Saudi capital to discuss the two nations’ increasingly strained ties.

Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.

Egyptian inflation rises to 32.7% in May after cooling in April

Inflation returns to near record highs after April’s brief respite: Annual urban inflation rose to 32.7% y-o-y in May from 30.6% the month before, according to figures released on Saturday by state statistics agency Capmas. The May reading marks a return to the near record high inflation recorded in March before price hikes briefly cooled in April. Inflation is now once again at its highest since July 2017, when it hit an all-time high of nearly 33%.

Analysts expected inflation to rise — but not so steeply: The median forecast in a Reuters poll of 13 analysts was for inflation to rise to 31.4%. Economists were expecting prices to have risen last month thanks in part to the government’s recent decisions to hike the prices of dieseland subsidized commodities sold to ration card holders.April’s breather came on the back of a favorable base effect, the stabilization of the USD-EGP exchange rate, and a slight slowdown in food price growth.

Food inflation came in hot: Food and beverage prices — the largest component of the basket of goods and services used to calculate inflation — accelerated to 60.0% y-o-y in May from 54.7% the month before, approaching the territory of the all-time high of 62.9% recorded in March. The Central Bank of Egypt (CBE) has not yet released last month’s figures on core inflation, which is often seen as a superior measure of price growth because it strips out volatile items such as food and fuel.

Monthly inflation also rose to 2.7% in May — up from 1.7% the month before and matching the figure in March.

Expect more of the same: Many economists are expecting inflation to remain high as the hikes to diesel and subsidized food combine with higher demand for key commodities including meat on the back of Eid Al Adha at the end of the month. CI Capital in April predicted inflation to “resume its upward trajectory over the coming months” to average 30-32% in 1H 2023, while Capital Economics last week told Reuters the headline rate would hover around 31-32% for “the next few months.”

Complicating matters: The chance of further currency depreciation. Inflation could rise as high as 37% in 3Q 2023 if the EGP weakens further against the USD, Goldman Sachs’ Farouk Soussa is quoted as telling Bloomberg. The USD-EGP rate has remained at 30.90 since the middle of March and some analysts now aren’t expecting any movement until at least September. We have more on the latest predictions for the exchange rate in What We’re Tracking Today, above.

As always, higher inflation may mean higher rates: The hotter reading may put pressure on the CBE to raise interest rates when it next meets to review interest rates on 22 June, Reuters notes. The CBE’s monetary policy committee left rates unchanged at its last meeting in May, saying it would continue to assess the impact of the 1k-bps worth of rate hikes implemented in the past 15 months. That said, analysts including Bloomberg chief EM economist Ziad Daoud have suggested we won’t see movement on rates unless and until the currency depreciates further.

Actis, Edra are looking to acquire Egypt power plant for up to USD 2 bn

Actis, Edra eye Siemens power plant: Private equity outfit Actis and Malaysian power company Edra haverenewed their interest in acquiring one of the three Siemens-built power plants in a transactionthat could be worth USD 2 bn, Bloomberg reported Thursday, citing anonymous sources familiar with the matter. The sale of the 4.8-GW Beni Suef plant, which has been earmarked for a transaction, would inject new momentum into the government’s privatization drive and bring in much-needed foreign currency.

What we know: Both companies plan to submit offers to acquire as much as 100% of the plant and operate it, according to Bloomberg’s sources. The USD 2 bn valuation includes outstanding debts, making it unlikely that the government would receive the full sum if it goes through with the sale. The Egyptian Electricity Holding Company took out a loan from an international banking consortium for 85% of the EUR 6 bn price tag for the three plants. It’s unknown how much of the loan the company has repaid since it began repayments in 2019. The financial obligations of the plant would be transferred to the new buyer, according to Bloomberg.

We’ve been here before: Actis and Edra were among the interested companies when the government first began courting international investors in 2019. Along with Blackstone, both were in talks with authorities over the prospective sale which never went anywhere.

No-one can buy the plant without the lenders’ permission: Under the terms of the financing, Egypt can only sell the assets if it pays off the loans in full or gets the lenders’ permission. German development bank KfW, Deutsche Bank, and HSBC are the primary financers of the project, lending Egypt EUR 4.1 bn.

Remember: Egypt wants to sell USD 2 bn of assets before the end of this month. The government has so far raised some USD 147 mn by selling off Pachin and a 10% stake in Telecom Egypt.

Saudi Egyptian Industrial Investment close to acquiring 70% of state-owned El Nasr Glass and Crystal

SEII soon to acquire 70% of MIH subsidiary: Saudi Egyptian Industrial Investment (SEII) will “within weeks” finalize an agreement with the state-owned Metallurgical Industries Holding Company (MIH) to acquire 70% of its subsidiary El Nasr Glass and Crystal Company, Public Enterprises Minister Mahmoud Esmat was quoted as telling Asharq Business yesterday. SEII would acquire the shares through a capital increase, Esmat said, without disclosing the value of the investment.

We knew this was coming: MIH and SEII signed an MoU back in March to increase the capital of El Nasr Glass and Crystal. Asharq reports that El Nasr Glass and Crystal is 50% owned by MIH, with the remaining 50% held by the National Investment Bank (NIB). SEII is 50% owned by the Saudi Finance Ministry and 50% owned by NIB, according to its website.

The investment will help localize our renewables industry: The Saudi investment will be used to add production lines making glass panels used in solar plants.

SCZone to IPO 20% of Port Said terminal operator via EGX

Port Said terminal operator to sell 20% stake on EGX: The Suez Canal Economic Zone’s (SCZone) board of directors signed off Thursday on selling a 20% stake in Port Said Container and Cargo Handling (PSCCHC) in an IPO on the EGX as part of the Madbouly government’s renewed privatization push, it said in a statement.

Current ownership structure: The SCZone currently holds a 39% stake in PSCCHC, while the Holding Company for Maritime Transport owns 40%, according to a company official we spoke with. The remaining shares are held by the Canal Shipping Agencies Company.

Remember: The company has been in line for an IPO since December when it listed its shares on the exchange. The company had six months with which to complete regulatory procedures under recent changes to securities regulations, a time period which elapsed last week.Companies are allowed to ask the Financial Regulatory Authority for a six-month extension if they haven’t completed the IPO procedures by the initial deadline.

Expect developments in the coming weeks: The company will begin the offering “very soon,” our source told us.

The company has also attracted interest from private investors: The Qatar Investment Authority submitted an offer earlier this year to acquire a majority stake in the terminal operator, along with shares in the Damietta Container & Cargo Handling Company (DCHC). Nothing has been heard from the talks since, and though details of the negotiations remain unclear, it was said that the Transport Ministry was reluctant to cede majority control of the companies.

AN ETHYDCO IPO?

Could Sidpec IPO Ethydco post-merger? That’s one of the options on the table, according to Al Mal. Sources familiar with the matter reportedly tell the newspaper that foreign investors have shown interest in acquiring 10% of the company and that this could be done via a public share sale on the EGX.

Remember: Sidi Kerir Petrochemicals (Sidpec) is in the process of acquiring the remaining shares in the Egyptian Ethylene and Derivatives Company (Ethydco) in an all-share merger. Sidpec currently owns 20% of the company, making it the second-largest shareholder after Egyptian Petrochemicals Holding Company (ECHEM), which holds 21%. The merger has been in the works since last year, and according to Al Mal’s sources should be completed within two months.

One option among many: An IPO is just one option under consideration, according to the people, who say that a final decision will be made after the acquisition wraps.

Ethydco has been earmarked for privatization: Ethydco was among the 32 companies named in the rebooted privatization program earlier this year.

Egypt approves new industrial projects in Suez Canal Economic Zone

The board of the Suez Canal Economic Zone (SCZone) approved several new projects in a meeting on Thursday, the zone said in a statement.

#1- New steel complex to pump out 1.8 mn tons for export: The SCZone’s board approved the establishment of a new steelworks in the East Ismailia industrial area. The 1.2 mn-sqm complex will cost USD 610 mn to establish and produce 1.8 mn tons of steel per year for export to foreign markets. The statement did not disclose which companies are involved.

#2- Chinese ironworks pending final approval: The SCZone’s board granted preliminary approval to a Chinese consortium to establish a USD 300 mn ironworks in Sokhna, SCZone head Walid Gamal El Din said. The two companies — state-owned Sonoma and private metals manufacturer Xinfeng — proposed a two-phase complex last month that will be built over 750k sqm and provide 1.2k jobs. The project would produce 600k tons of sheet metal a year.

#3- Ready-made garments in SCZone: Clothing company Shanghai Shengda got the go-ahead to set up a factory for ready-made garments in Qantara West Industrial area, two weeks after it signed a letter of intent with SCZone representatives during its roadshow in China. About USD 40 mn would be invested in the factory over two phases. The factory is expected to produce 43 mn items each year, all of which would be exported to the US. It is also expected to create 1.2k jobs.

#4- Concrete Plus to lay foundation for a tire plant: Concrete Plus received approval to build a EUR 750 mn tire manufacturing plant. It aims to produce around 2.4 mn tires for cargo trucks and passenger vehicles every year. The factory will create some 700 jobs.

#5- Flex PET gets a storage area: Indian plastic packaging manufacturer Flex PET will build a storage area for raw materials after the board greenlit the move. The company began construction on its USD 110 mn plastics plant in April. The plant will produce 30k tons of polyethylene a month and is expected to be fully operational by mid-2025. It will provide 700 jobs.

ITFC to provide USD 700 mn for Egypt’s grain imports. PLUS: Agric could source wheat from outside Russia for Egypt tender + Local harvest on track to meet 2023 target

More wheat money from the ITFC: The International Islamic Trade Finance Corporation (IFTC) this week agreed to extend the country USD 700 mn to fund grain imports, Asharq Business quotes Supply Minister Ali El Moselhy as saying.

Not entirely new money: The funding is part of the USD 1.5 bn financing agreementthe government agreed with the ITFC back in January to fund energy and basic commodities imports. The lender has long helped finance our essential imports, with the latest agreement coming under the ITFC’s 2018 credit agreement with Egypt, which it last year extended to a possible USD 6 bn from USD 3 bn and renewed for another five years.

Gov’t says its not struggling to pay for wheat imports: The government has not asked to reschedule payments to any wheat suppliers nor has it missed any payments, Assistant Supply Minister Ibrahim Ashmawy said during an interview with Lamees Hadidi on Kelma Akhira last night (watch, runtime: 12:33).

The Russian grain we booked last week might end up coming from elsewhere:Russian wheat exporter Agric SA is “committed” to fulfilling its offer to ship 55k tons of wheat but may look into sourcing the grain from somewhere other than Russia, El Moselhy reportedly said. Bloomberg on Thursday reported that Agric waslooking to withdraw its successful bid in last week’s wheat tender after Moscow objected to the USD 229 / ton price, Bloomberg reports, citing anonymous sources. The supplier had offered to ship 55k tons of wheat for USD 229 per ton but reversed course after failing to get approval from Russia’s agriculture ministry, which wants to enforce a minimum USD 240 per-ton price, the people said. In response, GASC has reportedly threatened to keep hold of the USD 400k guarantee if Agric doesn’t deliver the grain.

Progress on our four new grain warehouses: Moselhy was speaking at a ceremony to mark the start of work on the first of four strategic warehousesfor grain and other basic commodity storage. The Suez warehouse will cost some EGP 1.5 bn to build — up from an initial EGP 1 bn estimate — and will be up and running in the next 18-24 months, Moselhy said. The government has signed EGP 4 bn worth of contracts with our friends at Hassan Allam Utilities (HAU), Orascom Construction, and Samcrete to set up the four warehouses, with the remaining three to be located in Sharqia, Luxor and Fayoum.

Local wheat buys on track: The government has so far procured some 3.4 mn tons of wheat from local farmers this harvest season, according to a Supply Ministry statement yesterday. The statement came after Reuters reported that Egypt could miss its target to procure 4 mn tons of local wheat this season, citing an anonymous government source as saying that the government had bought less than 3.2 mn tons so far this year.

Strategic reserves of wheat currently stand at 5.9 months, Moselhy reportedly said yesterday – up from 2.6 months’ worth at the end of April. The local wheat harvest runs from the beginning of April to August.

Roche, Eva Pharma to produce meds for organ transplant patients in Egypt

Roche tech transfer to allow Eva Pharma to produce advanced immunosuppressants: Swiss pharma giant Roche and local meds firm Eva Pharma are set to localize the production of immunosuppressant medications for organ transplant patients under an MoU signed last week on the sidelines of Africa Health Excon, according to a joint press release (pdf). Production is set to take place at Eva Pharma’s manufacturing facility in Tenth of Ramadan city with the possibility of exporting to markets in Africa, the statement reads.

Why this is important: This joint project “will encourage technology transfer and the complicated know-how development of much-needed immunosuppressant medication which is important to improve the lives of patients who are undergoing organ transplants,” the companies said.

Background: There are some 42 registered centers for organ transplants in Egypt and the Nasser Medical Hospital will soon house the MENA region’s largest transplant center as part of the government’s renovation of the facility. Some 1.1k kidney transplant operations took place in Egypt in 2022.

It’s getting easier to become a donor:The ministry is currently working on a digital platform to allow people to register to become organ donors and the Justice Ministry has made it obligatory to register organ transplant operations in a bid to counter organ and human trafficking, the statement reads.

New 24-hour ceasefire takes effect in Sudan. PLUS: Egypt introduces new visa rules for Sudanese citizens

Fresh US and Saudi-brokered ceasefire: Khartoum was “relatively calm” as Sudan on Saturday morning entered a fresh ceasefire brokered by Saudi Arabia and the US, Reuters reports. The warring Sudanese Armed Forces and Rapid Support Forces agreed to down weapons for 24 hours starting from 6am yesterday to allow for humanitarian assistance to reach civilians, a joint statement from the two facilitators read.

Jeddah talks could be halted if the ceasefire doesn’t hold: Both Saudi Arabia and the US expressed their “frustration” over the “uneven implementation of previous ceasefires,” warning that they could be forced to end indirect ceasefire talks that resumed last week in Jeddah if the latest ceasefire is not respected. Several temporary ceasefires have so far failed to quell fighting on the ground. The US on Friday said it would publicly release some of the results of its satellite monitoring of the conflict to help address violations of ceasefires and human rights abuses.

All Sudanese citizens seeking to enter Egypt must now apply for a visa, according to a Foreign Ministry statement. Egypt had previously relaxed the rules to allow women, children and men over 50 into the country without a visa. The new rules “aim to organize, not restrict” the number of Sudanese citizens entering Egypt, Foreign Ministry Spokesperson Ahmed Abu Zeid said, adding that authorities had detected “the spread of unlawful activities by some individuals and groups on the Sudanese side,” including the issuing of fraudulent visas. Procedures are in place to promptly issue visas allowing people to cross the border, he added.

More than 200k Sudanese citizens have so far sought refuge in Egypt from the war, Abu Zeid added.

Egyptian Tax Authority welcomes Fayez Hassan as new head

Fayez Hassan has been appointed the new head of the Egyptian Tax Authority (ETA), according to a Finance Ministry decision (pdf) seen by Enterprise. statement (pdf). Hassan has several decades of experience in tax administration and most recently headed up the authority’s central administration, according to his bio. He succeeds Mokhtar Tawfik, whose term as headof the ETA ended on Friday, according to a separate Finance Ministry statement (pdf).

Weathering the economic storm, food prices, and Sudan visa changes

It was a mixed bag on the airwaves last night, as the talking heads highlighted everything from macroeconomic concerns to food prices to the latest developments in Sudan.

“The economic crisis will pass the same as any other crisis…I trust our ability to overcome,” was President Abdel Fattah El Sisi’s message in his speech during a visit to the Egyptian Military Academy yesterday. El Sisi’s words of reassurance on the economy got top billing from Masa’a DMC (watch, runtime: 15:02), Ala Mas’ouleety (watch, runtime: 24:28), Al Hayah Al Youm (watch, runtime: 21:23) and El Hekaya (watch, runtime: 2:38 | 3:02 | 1:59).

If food prices are falling globally, why not locally? That was the question on Amr Adeeb’s mind last night, as he questioned why cooking oil prices haven’t dropped in line with international market prices (watch, runtime: 3:18 | 3:33). Hazem El Menoufy, head of the food division at the Egyptian Federation of Chambers of Commerce (Fedcoc), joined Adeeb on El Hekaya to call on food companies to lower their prices in line with global changes (watch, runtime: 3:17).

Speaking of food: The latest in wheat — including the start of construction of a huge strategic warehouse in Suez governorate — was covered by channels including Al Hayah Al Youm (watch, runtime: 1:38). We have the full story in this morning’s Commodities section, above.

Changes to visa rules for Sudanese citizens were also in focus (watch, runtime:15:07). The decision to implement stricter visa procedures came because gangs had been selling forged visas for USD 500 at the Arqeen and Qastal border crossings into Egypt, Ala Mas’ouleety’s Ahmed Moussa said (watch, runtime: 4:37). We have all the details in War Watch, above.

Russian citizen dies in Hurghada shark attack

Dominating the international conversation on Egypt this morning: A Russian citizen died after being attacked by a shark in Hurghada on Thursday. The Environment Ministry confirmed the incident after videos surfaced on social media seeming to show a man struggling with a shark before being pulled under the water. Local authorities closed the coastline between El Gouna and Somabay. (Associated Press | Reuters | CNN | The National | Sky News | Euronews | The Guardian | The Telegraph)

Anchorage Investments signs for USD 2.5 bn petrochems complex with SCZone. PLUS: EGPC subsidiary seeks EGP 10 bn loan + Egypt, Jordan cooperate on natgas

PETROCHEMS-

Anchorage Investments signs MoU for petchem complex: Anchorage Investments has signed an MoU with the Suez Canal Economic Zone (SCZone) for its proposed USD 2.5 bn petrochemical complex, the Suez Canal Authority said in a statement Thursday. The statement did not disclose any details of the agreement.

Background: The company, which has been planning the facility since 2021, received a boost last month when the government indicated that it could hand it a golden license, allowing it to expedite the approvals process and get the project off the ground. The facility will produce a range of petrochemical products and natural gas derivatives, some of which will be exported to overseas markets.

DEBT-

EGPC subsidiary wants a big loan to buy petroleum products: Co-operation Petroleum Company (Copetrol) wants to secure an EGP 10 bn syndicated loan led by Banque Misr and the National Bank of Egypt (NBE) to finance urgent purchases of petroleum products for its parent company, the Egyptian General Petroleum Company (EGPC), Asharq Business reports, citing two unnamed sources its says are in the know. The loan matures in ten years, one of the sources added.

Copetrol is a major fuel distributor and marketer: The company has a 31% market share for major petroleum products and 20% for oils, according to Asharq.

ENERGY-

Egypt + Jordan strengthen natgas cooperation: Egypt and Jordan have signednatural gas cooperation agreements aimed at making it easier and cheaper for Egyptian gas to reach Jordan, the Oil Ministry said in a statement yesterday. Under the first pact, the two countries will work to increase flows of Egyptian gas through the Arab Gas Pipeline — which links Egypt with Jordan, Syria and Lebanon — to feed industrial zones in the kingdom. The second agreement will see Egypt and Jordan reduce operational costs of LNG shipments by jointly using the floating LNG terminal at Jordan’s southern port of Aqaba.

Turkey’s Erdogan appoints former Goldman Sachs MD as central bank head

In another sign that Turkey is changing course: Turkish President Recep Tayyip Erdogan has appointed former Goldman Sachs managing director and First Republic Bank co-CEO Hafize Gaye Erkan to lead the country’s central bank, Reutersreported, citing a decision published in the country’s Official Gazette. This comes a week after Mehmet Simsek was named the country’s new finance minister, who pledged to bring to an end years of unorthodox monetary policies pushed by the country’s president.

The big question: Whether she will be allowed to break with Erdogan’s attempt to rate-cut his way out of soaring inflation. “In order to gain credibility and anchor market expectations with the minimum dose of rate hikes, she has to ensure that the preference towards low interest rate policies...are buried in the past,” one economist said.

EGX30	17,521	+1.0% (YTD: +20.0%)
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	11,397	+0.2% (YTD: +8.8%)
ADX	9,369	+0.2% (YTD: -8.3%)
DFM	3,699	+0.3% (YTD: +10.9%)
S&P 500	4,299	+0.1% (YTD: +12.0%)
FTSE 100	7,562	-0.5% (YTD: +1.5%)
Euro Stoxx 50	4,290	-0.2% (YTD: +13.1%)
Brent crude	USD 74.79	-1.5%
Natural gas (Nymex)	USD 2.25	-4.2%
Gold	USD 1,977.20	-0.1%
BTC	USD 25,865	-2.3% (YTD: +56.4%)

THE CLOSING BELL-

The EGX30 rose 1.0% at Thursday’s close on turnover of EGP 2.37 bn. Local investors were net buyers. The index is up 20.0% YTD.

In the green: Sidi Kerir Petrochemicals (+8.5%), Ibnsina Pharma (+4.3%) and Telecom Egypt (+4.0%).

In the red: Abu Dhabi Islamic Bank (-2.9%), Edita (-1.9%) and Taaleem Management Services (-1.3%).

Egypt hands over Comesa chairmanship to Zambia. PLUS: Egypt welcomes Libyan step towards elections

Egypt hands over Comesa chairmanship: President Abdel Fattah El Sisi on Thursday handed over the chairmanship of the Common Market for Eastern and Southern African (Comesa) to Zambia during the Comesa summit in the Zambian capital, Ittihadiya said.

More regional integration is needed: “Despite the successes that have been achieved, we still have a lot to do to make our regional integration able to face the current challenges,” El Sisi told the summit. During its two-year chairmanship of the trade zone, Egypt introduced a regional industrial integration initiative, which aims to accelerate industrial production by linking regional value chains.

Egypt welcomes breakthrough in Libya election talks: Egypt welcomed last week’sagreement between Libya’s rival factions which saw the two sides agree on a legal process to hold presidential and legislative elections, the Foreign Ministry said Friday. The foreign minister of Morocco, which brokered the deal, said that a final agreement would be signed in the coming days.

CALENDAR

JUNE

June: Suez Canal Economic Zone India roadshow.

June: Egyptian-Saudi business forum.

June: Indian Prime Minister Narandra Modi to visit Egypt.

11 June (Sunday): House reconvenes.

11 June (Sunday): National Dialogue.

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

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

13 June (Tuesday): National Dialogue.

15 June (Thursday): National Dialogue.

18 June (Sunday): Senate reconvenes.

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, Egypt International Exhibition Center.

19-21 June (Monday-Wednesday): Big 5 Construct, Egypt International Exhibition Center.

20 June (Tuesday): Capital Markets Annual Summit, Nile Ritz-Carlton Hotel.

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.

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

18 July (Tuesday): Islamic New Year.

18-19 July (Tuesday-Wednesday): Egypt Mining Forum, Nile Ritz-Carlton, Cairo.

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.

September: IDH to open first branch in Saudi Arabia.

September: The Egypt-Germany trade and investment joint conference in Cairo.

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

10-12 September (Sunday-Tuesday): The International Agricultural Exhibition for Africa and the Middle East, Sahara.

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

15 September (Friday): Deadline for FX bureaus to comply with new capital requirements.

17-18 September (Sunday-Monday): Arab Security Conference and Exhibition, Nile Ritz Carlton.

17-19 September (Sunday-Tuesday): Sharm Rendezvous, Rixos Premium Seagate, Sharm ElSheikh.

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.

25-26 September (Monday-Tuesday): Egypt to host the Asian Infrastructure Investment Bank’s annual board meeting, Sharm El Sheikh.

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

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

28-29 September (Thursday-Friday)Medical Tourism Conference, Sharm ElSheikh.

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.

9-11 October (Monday-Wednesday): Arabs Savings and Financial Literacy Conference, Four Seasons Hotel.

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

Late October-14 November: 3Q2023 earnings season.

15-17 October (Sunday-Tuesday): Egypt Automotive Aftermarket Exhibition, Cairo International Convention Center.

26 October (Thursday): Daylight saving time ends.

29-31 October (Sunday-Tuesday): Egypt Energy, Egypt International Exhibition Center.

29 October - 2 November (Sunday- Thursday): Cairo Water Week.

30-31 October (Monday-Tuesday): Intelligent Cities Exhibition and Conference, Dusit Thani LakeView, Cairo.

30-31 October (Monday-Tuesday): Global Business School Network (GBSN), American University of Cairo.

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.

14-15 November (Tuesday-Wednesday): Destination Africa, Royal Maxim Palace Kempinski Hotel.

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

19-22 November (Sunday-Wednesday): Cairo ICT, Egypt International Exhibition Center.

23 November (Thursday): Worldview Education Fair, Cairo. (Register here)

DECEMBER

10-11 December (Sunday-Monday): eGlobe Expo, St. Regis Almasa Hotel, Cairo.

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

12-14 December (Tuesday-Thursday): Food Africa Expo, Egypt International Exhibition Center.

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.

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.

3Q 2023: E-Finance to launch in Saudi Arabia.

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

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

2024: Standard Chartered Bank to open a branch in Egypt.

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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