Get EnterpriseAM daily

Available in your choice of English or Arabic

CBE to keep rates unchanged on Thursday

1

What We're Tracking Today

Telecom Egypt denies Qatar-Vodafone Egypt reports

Good morning from the People’s Democratic Republic of Maadi, where we’re finalizing this morning’s edition with no coffee. Note to selves: Grind coffee the night before in anticipation of deadline-time power outages…

THE BIG STORY here at home this morning: We should get some advance warning about when the lights will go out: A detailed schedule for blackouts will be published today on the websites of governorates ( Cairo | Giza | Alexandria), Local Development Assistant Minister Khalid Kassim said in a televised interview last night ( watch, runtime: 3:12).

The government will also try to further reduce its consumption in non-strategic places such as roads(yes, roads — we triple checked), some government offices and sports pitches by 50-75% in a bid to lower electricity demand, he said, clarifying that households are excluded from this figure.

THE STANDARD- A one-time hour-long blackout: Show host Ahmed Moussa said that the new agreed-upon standard for blackouts in residential areas is a one-time hour-long power cut each day, and that anything more than that would be an exception.

FROM THE RUMOR MILL-

The Qataris aren’t the only ones in the race for Vodafone Egypt: The Public Investment Fund ( Saudi Arabia’s sovereign wealth fund) is competing with the Qatar Investment Authority (QIA) to acquire Telecom Egypt’s minority stake in Vodafone Egypt, two sources at the National Telecommunications Regulatory Authority and Finance Ministry told us yesterday.

TE says it hasn’t received formal offers from anyone : Telecom Egypt (TE) has not received a formal offer to acquire its shares in Vodafone Egypt, the company said (pdf) yesterday. The state-owned telecoms company was reacting to a report in Al Borsa claiming that the QIA will finalize an agreement to acquire the shares before the end of September. The website claimed that the two sides had agreed on a valuation, but are still negotiating over the size of the stake on offer. A source at Telecom Egypt reiterated the company’s denial when we reached out for comment.

There could be more interest: The company is continuing to invite offers from other investors, our sources told us. Abu Dhabi wealth fund ADQ has also expressed interest in buying in.

Remember: Negotiations between QIA and TE were said to have stalled in February due to a disagreement over the size of the stake on offer; the two sides resuming talks in June. While QIA is reportedly looking to acquire the company’s entire 45% stake in Vodafone Egypt, the government is said to be unwilling to cede more than 25% of the company.

HAPPENING TODAY-

Thanaweya Amma results are out: The Education Ministry will release the results of this year’s Thanaweya Amma exams later today, an official source tells Ahram Online. The pass rate for the 2022-23 academic year is 78.8%, Education Minister Reda Hegazy said yesterday. The minister will hold a press conference today to announce more details of the results.

Get yours here: Students can check their results online via here.

ICYMI-

Missed this week’s Inside Industry? In our weekly vertical exploring all things industry and manufacturing, players in the construction industry tell us how the government is turning to the private sector to help reverse years of losses at state-owned factories.

HAPPENING THIS WEEK-

RIP EGX50: The Egyptian Exchange will terminate the EGX50 index tomorrow.

Interest rates: The Central Bank of Egypt will meet on Thursday to discuss interest rates. All of the analysts we surveyed in our customary poll see the central bank holding rates steady for a third consecutive month. We have more in this morning’s news well, below.

Jeddah to host Ukraine talks: Saudi Arabia will host a second round of talks over the Russia-Ukraine conflict in Jeddah, following talks in Copenhagen last month, the Wall Street Journal reports. Senior officials from as many as 30 countries — including Egypt — are set to attend the talks on 5 and 6 August, in which Russia is not expected to participate. Ukrainian and Western officials are hoping the talks will sway developing nations to offer more support to Ukraine.

THE BIG STORIES ABROAD-

There’s no single story capturing the world’s attention this morning: The Wall Street Journal leads with fears that the Chinese economy may be slipping into deflation, the Financial Times is reporting that the world’s largest private equity firm, Blackstone, is making a major play for AI data centers, while the Associated Press looks at the impact of the summer heatwave on poor Americans who live without ACs.

CIRCLE YOUR CALENDARS- The Enterprise Finance Forum is taking place on 18-19 September at the St. Regis Hotel in Cairo. 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.

TAP OR CLICK HERE if you want to express interest in attending. We’ll be sending out the first batch of invitations soon.

Do you want to become a commercial partner? Ping a note to Moustafa Taalab, our head of commercial, or fill out this form and we’ll be in touch.


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

CORRECTION- There’s still time to apply for the second round of the Smart Green Projects initiative. The deadline for startups to apply has been pushed once more until 1 September, rather than closing today as we reported in yesterday's edition of EnterpriseAM.

*** 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 take a look at a new World Bank report that looks at how low- and middle-income countries tried to address the disruption caused to education by the covid-19 pandemic.

Book your summer vacation with Stayr at Somabay and indulge in a first-class selection of vacation homes, in-tune with each unique holiday mood. Experience ultimate relaxation by our breathtaking coastline and allow our team of experts to plan the perfect getaway to suit your mood. For booking inquiries, call +20 15 5600 5693 or visit our website.

2

POLL

Egypt’s central bank expected to leave interest rates unchanged in June

The Central Bank of Egypt (CBE) will leave interest rates unchanged when it meets on Thursday as officials opt for policy stability while the banking system shores up FX reserves ahead of an anticipated devaluation later this year, according to our interest rate poll. All of the seven analysts and economists we surveyed expect the Monetary Policy Committee (MPC) to hold rates steady.

Where rates currently stand: The overnight deposit rate stands at 18.25% while the overnight lending rate is 19.25% and the main operation and disc. rates are at 18.75%. The central bank has hiked rates by 1k bps since March 2022 but left them unchanged during the previous two monetary policy meetings in May and June.

Waiting for FX: A number of analysts told us that the central bank will likely hold off on making further interest-rate adjustments until the banking system has built up its FX reserves ahead of the expected currency devaluation later in the year. “Raising interest rates will be closely linked to the movement in the official exchange rate, which is not expected to happen before the fourth quarter of 2023,” Al Ahly Pharos told Enterprise. Meanwhile, economist Mona Bedeir expects the CBE to move when FX revenue streams from the privatization program begin to pick up.

Remember: A number of local and Gulf investors have agreed in principle to acquire USD 1.9 bn of state-owned assets under the state privatization program, USD 1.65 bn of which will be paid in FX. The government expects to finalize agreements next month and receive the proceeds by September.

Higher rates won’t do much to bring in FX: One-year government bonds are currently offering a real rate of -6.41% due to the soaring inflation rate, Mounir said. Negative real yields are continuing to push investors out of government bonds, with USD 3.4 bn exiting the local debt market during the first nine months of FY 2022-23. “This suggests that an interest rate hike to attract portfolio inflows is unlikely in the upcoming MPC meeting until Egypt sorts out its USD liquidity shortage,” she said.

Most Egypt watchers say the next deval is unlikely before September or October: A number of global investment banks — most recently Morgan Stanley — now think it unlikely officials will allow the EGP to slide against the greenback before September or October, which is when most expect the IMF to finally conduct the first review of the loan program. Capital Economics expects authorities to let the currency fall to 35 / USD by the end of the year from 30.9 currently, it said in a note last week.

What about the record-high inflation? Higher rates may not do much. Banking expe rt Mohamed Abdel Aal believes that monetary policy is now unable to have much of an impact on controlling inflation due to the impact of the weaker EGP. “The MPC raised interest rates by 1000 bps over the past 16 months, but inflation remains far behind the official target figure. This proves that the exchange rate has the most direct and correlated effect on inflation,” he said. “Addressing the persistent strains on the currency, and putting a break on further devaluations, is key to containing this inflation.”

The CBE seems to think the same thing: Governor Hassan Abdalla said earlier this year that the central bank will need to turn to other policy measures to rein in inflation due to the supply-side factors fuelling price increases.

Remember: Inflation hit a record high in June, with the annual urban rate accelerating to 35.7% from 32.7% the month before.

It’s expected to move higher: Several analysts believe that Inflation is still yet to peak. “We expect Egypt's inflation to continue rising by 2% m-o-m and record 36.6% y-o-y for July as the supply shortages, caused by import curbs and lack of USD availability,” said Mounir. Meanwhile, Bedeir expects inflation to peak in October on the back of a devaluation.

Keeping borrowing costs in check: A number of analysts said the central bank is likely to tread carefully regarding future rate hikes due to the impact on the government’s borrowing costs. This week’s meeting will be a chance for the central “to evaluate the impact of previous hikes, so it can utilize other monetary policy methods to contain inflation without affecting the cost of government borrowing,” banking vetera n Hany Aboul Fotouh told us.

If there is a hike… Though its current base is for a 200-bps increase in September, Capital Economics isn’t ruling out a hike in August, writing that there is a “growing risk” that policymakers could move this week due to accelerating inflation. Bedeir says there remains a possibility that the MPC could raise rates by 100 bps but this will depend on whether FX liquidity improves and releases pent-up demand for greenbacks.

3

Automotive

Al Amal to temporarily shutter BYD assembly plant in Egypt on FX shortage

Al Amal will soon shutter most of its local BYD production lines: Al Amal Auto will temporarily suspend operations at its BYD assembly plant within weeks, Chairman Amr Soliman told Enterprise, citing difficulty obtaining hard currency to import the required production components. Al Amal is the sole agent and distributor of BYD and Lada brand passenger cars and King Long microbuses in Egypt. The news was first reported by Asharq Busines s.

What will happen? The company has enough components to continue operations for the next two weeks, after which it will down tools for at least 10 days as it awaits a shipment of components, Soliman tells us. After it receives the shipment, the company will only reopen only one of its four production lines, he said. The company has some 600 orders waiting to be fulfilled, he told us.

The firm has been struggling with import difficulties for some time: Al Amal’s factory has been forced to scale down its operations, with its output slashed by some 60% as a result of limited component imports, Soliman told us back in March. “Some 45% of the cars’ components are sourced locally, while the remaining 55% is imported,” he told Asharq . The company suspended the assembly of the Lada Granta on the back of Western sanctions on Russia and has for months been worried it could be forced to shutter completely due to import restrictions.

On the upside: Al Amal is currently in negotiations with Russia’s Lada to resume assembly, Soliman confirmed.

Al Amal has been in the market for almost two decades: Al Amal kicked off its operations back in 2004, establishing a factory in the Tenth of Ramadan industrial zone.

The wider sector is in a slump thanks to import woes: Total auto sales volumes fell more than a third in 2022 after capital controls in place for most of the year made it almost impossible for distributors to import cars and components, and forced a number of global car manufacturers to suspend sales to Egypt.

4

Investment Watch

B Investments + MTI invest EGP 500 mn into pharma logistics firm EZ International

B Investments and MTI have invested EGP 505 mn in EZ International: Private equity firm B Investments and EGX-listed MM Group(MTI ) have together invested some EGP 505 mn in newly-established pharma logistics firm EZ International, B Investments’ IR head Omar El Labban told Enterprise yesterday.

Who invested what? B Investments has put in EGP 300 mn, it said in an EGX disclosure (pdf) yesterday, while MTI invested EGP 205 mn. The investment was made through B Investment’s pharma sector SPV B Pharma, in which MTI recently acquired a 40% stake in return for its EGP 205 mn investment. B Investments continues to hold the other 60%. B Pharma’s entire capital has now been deployed into EZ International, El Labban said.

EZ International: The Sovereign Fund of Egypt’s healthcare sub-fund and B Investments in May set up EZ International, a pharma logistics and distribution firm in partnership with pharma chain El Ezaby. EZ International offers everything from logistics and administrative support to trade and distribution services to local pharma companies. El Ezaby owns a 51% stake in EZ International.

It’s all connected: The SFE earlier this year acquired a 49% stake in El Ezaby.

Where is the money going? EZ International aims to expand El Ezaby’s presence, with plans to double the number of its branches to 500 over the next five years, El Labban previously told us. The company will start deploying funds to carry out the expansion plans “immediately,” El Labban said.

Part of a bigger plan: B Investments and the SFE earlier this year unveiled plans to invest in Egypt’s healthcare and pharma industries under two agreements that could channel more than EGP 2 bn into the sector.

5

DEBT WATCH

Raya’s Aman Financial Services issues EGP 859 mn in securitized bonds as Global Corp also looks to return to the market

Aman closes second securitization transaction of 2023: Raya Holding’s non-banking financial services outfit Aman Financial Services and its consumer finance arm Aman Microfinance issued EGP 859 mn in securitized bonds, according to a statement (pdf) by CI Capital, who acted as an advisor on the issuance.

Aman is 25% through a wider securitization program: The company has now completed around a quarter of its three-year, EGP 5 b n securitization program, which kicked off in February with a EGP 403 mn issuance.

About the issuance: The issuance came in four tranches with tenors of between six and 24 months and ratings of Prime 1, AA+, and A from the Middle East Ratings and Investor Services (MERIS).

Advisors: Our friends at CI Capital acted as financial adviser, issuance manager, and lead arranger, while the National Bank of Egypt (NBE) and First Abu Dhabi Bank (FAB) acted as underwriters. Zaki Hashem & Partners provided counsel and UHY Egypt was the auditor.

DATA POINT- Companies have now issu ed almost EGP 39 bn of se curitized bonds so far this year, more than double the EGP 16.1 bn issued during the same period last year, according to data tracked by Enterprise .

GLOBAL CORP TO RETURN TO THE MARKET-

GlobalCorp is apparently plotting a new issuance: Non-banking financial services firm GlobalCorp is preparing to take another EGP 2.54 bn of securitized bonds to market, Al Borsa reported yesterday, citing sources familiar with the matter. The issuance will reportedly take place in mid-August, and is being managed by Al Ahly Pharos.

FYI- This would be GlobalCorp’s fourth issuance of its EGP 5 bn program and the first since December when it closed a EGP 1.1 bn issuance.

UNITED BANK RENEWS AFREXIMBANK LOANS-

United Bank rolls over almost USD 1 bn in loans from Afreximbank: State-owned United Bank has rolled over two loans from the African Export-Import Bank (Afreximbank), the first worth some USD 380 mn and the second worth some USD 600 mn, a banking official reportedly told Asharq Business. The money will go towards financing projects, the official said, without providing any further details.

REMEMBER- United Bank is up for sale as part of the state’s privatization plans. Last we heard, the Central Bank of Egypt — which owns 99.99% of the bank — had appointed Barclays to join CI Capital as the financial advisors working on the sale.

6

A MESSAGE FROM HSBC

HSBC SVNS is back — and launching in the Middle East

Earlier this month saw the global launch of HSBC SVNS, world rugby’s revamped and rebranded celebration of rugby sevens, which will take place across eight iconic cities, kicking off here in the Middle East in December.

Our ambition is to supercharge rugby’s global reach and appeal, and we aim to deliver an immersive experience, as well as a unique festival of sport, entertainment and culture set against stunning backdrops.

The HSBC SVNS festivals will provide the annual platform for the world’s best sevens athletes to shine with 12 men’s and women’s teams sharing a global stage at the same location, aligning with the Olympic model.

Dubai will deliver the curtain raiser for this festival from 2-3 December, before it moves to Cape Town, South Africa, and many other stunning cities around the world next year, including Hong Kong and Singapore.

As our Group CEO, Noel Quinn has recently commented, through many years of working closely with World Rugby to showcase and support the sport around the world, we’re very pleased that HSBC has become synonymous with the World Rugby Sevens. And the commitment we are making to rugby here in the Middle East ensures that a global tournament with a huge international following remains an anchor point of the world sporting calendar. We have partnered with Emirates and World Rugby to make the Dubai tournament a success since 2010 and, with this new commitment that extends to 2027, we look forward to helping the sport continue to reach even greater heights.

Under the new model, SVNS will deliver gender parity with all seven rounds and the Grand Final featuring combined men’s and women’s competitions and equal participation fees, with a 70 per cent uplift in World Rugby’s investment in participation fees as a commitment to sustainable growth.

Outside of the series, we’re equally committed to raising the profile of the sport across the Middle East, by making it more accessible and popular. Since the early launch of our partnership with the UAE Rugby Federation to develop the Player Pathway Program back in 2011, an average of 100,000 school children, male and female, have participated in the program annually.

I hope to see you in Dubai in December for the launch of what promises to be a memorable celebration of inclusive sport. For the latest information on tickets, fans should visit SVNS.com to find out more.

Simon Calder ( LinkedIn) is deputy chief executive officer & chief operating officer, HSBC Bank Middle East Ltd.

7

EARNINGS WATCH

SODIC + Mashreq earnings more than double in 2Q 2023

SODIC’s bottomline more than doubles in 2Q 2023: Upmarket real estate deve loper SODI C reported net income of EGP 148 mn in 2Q 2023, up 126% y-o-y, according to the company’s latest earnings release (pdf). The company’s revenues for the quarter dipped 7% y-o-y to EGP 1.42 bn. Over the first six months of the year, the company’s bottomline rose 15% y-o-y to EGP 335 mn while revenue rose 7% to EGP 2.92 bn.

A strong 1H for sales…: Gross contracted sales were up 22% y-o-y to EGP 8.17 bn from the sale of 674 units during the first half of 2023. West Cairo projects accounted for 52% of gross contracted sales in 1H, followed by East Cairo projects (34%), and the company’s June development on the North Coast (15%).

…despite price pressures: The sales growth came even after the company slowed sales in 1Q to review selling prices amid rising construction costs. “Despite the limited launches in the first half of the year and the significant price increases to offset the effect of inflation we have achieved record sales,” said General Manager Ayman Amer.

Deliveries dip: The company’s deliveries in 1H 2023 fell 13% y-o-y, with 402 units delivered compared to 463 units during the same period last year. Of the 402 units delivered, 212 were in East Cairo, 189 in West Cairo, and one in the North Coast.

REMEMBER- SODIC is expanding in Sahel. The company acquired 180 acres of land south of its North Coast project Caesar in May. SODIC plans to invest over EGP 10 bn in the Caesar extension, which it expects to start work on later this year. The real estate developer also entered into a revenue-sharing partnership with local investment firm Al Safy Group at the beginning of this month that will see it develop a 440-feddan land plot on the North Coast.

MASHREQ NET INCOME DOUBLES IN 2Q-

Mashreq reports strong earnings growth in 2Q: Emirati lender Mashreq’s net incom e rose 139% y-o-y to AED 1.9 bn in 2Q 2023, up from AED 796 mn in the same period last year, according to its earnings release (pdf). The bottom-line y-o-y growth in 2Q 2023 was driven by an 84% increase in net interest income to AED 1.87 bn, as well as a 44% increase in ins., FX & other income which together brought in AED 458 mn.

A strong 1H performance: The lender’s net income also more than doubled to AED 3.5 bn in 1H 2023, up from AED 1.4 bn in the same period last year. Growth over the six-month period was driven by a 96% rise in net interest income, which came in at AED 3.6 bn.

Driving the growth: Growth in the lender’s loan portfolio — which climbed 5% YTD to AED 95 bn — and the high interest rate environment, it said. Meanwhile, deposits increased 11% YTD to AED 127 bn.

What they said: “Assessing Mashreq’s robust performance in the first half of 2023, it is evident that our strategic initiatives have been instrumental in shaping this success. With an exceptional 88% y-o-y increase in operating profit, rising to AED 3.7 bn, and a marked reduction in our cost-to-income ratio to 28.3%, the strength of our approach is clear,” Group CEO Ahmed Abdelaal said.

8

Moves

Vezeeta appoints first chief operating officer

Vezeeta has appointed Ola Aly El Din( LinkedIn) as its first chief operating officer, the company told Enterprise. Aly El Din has been at Vezeeta for six years and starts her new role after serving as the company’s vice president of business development and government relations, where she helped lead its growth strategy across the Middle East and Africa region. Aly El Din has more than 15 years of experience in the healthcare sector, including a 12-year stint at Iqvia, where she rose to become the company’s offering development manager for Egypt and the Levant.

9

LAST NIGHT’S TALK SHOWS

Blackouts + Palestine reconciliation talks dominate the conversation on Egypt’s talk shows

The never-ending Q&A about the ongoing blackouts continued to consume airtime on the talk shows yesterday, though some time was made to discuss th e outcome of the Palestinian reconciliation talks that took place in Alamein City yesterday, the eligibility criteria for settling outstanding military obligations for those living abroad, and the latest on the National Dialogue.

BREAKING DOWN THE POWER CUTS PROBLEM-

The national grid isn’t guilty: Our national electricity grid can take on 11 GW additional to yesterday’s consumption of around 34.5 GW, Electricity Ministry official Hafez Abdel Aal El Salmawy told Kelma Akhira’s Lamees El Hadidi yesterday in a phone interview ( watch, runtime: 18:59).

Blame it on the energy supply deficit: El Salmawy explained that “the last two weeks of July saw electricity consumption levels increase 10-14% y-o-y while our energy reservoir fell short of covering for that increase.”

Some electricity stations run only on natural gas: While the government was able to cover more than half of the energy shortage using mazut, “six percent of that increase in consumption remains unmet due to the fact that some electricity stations run only on natural gas,” he added.

But what happened to using renewable energy? Our renewable energy sources are already “covering 13-15% of the energy needs of the national grid, leading to fewer blackouts than would have been the case otherwise.” Ala Mas’ouleety also gave airtime to the blackouts, with show host Ahmed Moussa talking to Assistant Local Development Minister Khalid Kassim ( watch, runtime: 20:30).

PALESTINE RECONCILIATION TALKS FAIL-

No consensus reached: Yesterday’s Egypt-mediated meeting between competing Palestinian factions didn’t bear fruit but “left the door half open without reaching any agreements” on the topics of discussion,” Ayman Al Raqb, a senior member of Fatah, told El Hadidi ( watch, runtime: 4:31). Representatives of Fatah, Hamas and the Popular Front for the Liberation of Palestine met in El Alamein yesterday under efforts by Egypt to heal the years-long rift and establish a unified Palestinian administration. Organizing presidential elections, establishing a technocratic government and finding consensus on how to resist the Israeli occupation were among the topics of discussion, Al Raqb said.

Red flags: This round of talks “was planned to last for two days but was rather concluded after just a few hours and the participating Palestinian groups put out separate closing statements rather than a joint statement,” Al Raqb added, suggesting that the talks had failed. Masa’a DMC ( watch, runtime: 7:27), Al Hayah Al Youm ( watch, runtime: 26:00), and Ala Mas’ouleety ( watch, runtime: 8:32) also gave the story airtime.

Also on the airwaves last night:

This publication is proudly sponsored by

10

Also on our Radar

Egypt’s National Dialogue proposes online voting, fines for abstainers to boost election turnout

NATIONAL DIALOGUE-

How to encourage more people to vote? That was one of the main topics up for discussion at the National Dialogue yesterday during a session dedicated to updating a 1956 law that sets out political rights. A number of ideas to increase voter turnout were put forward by delegates:

#1- Make it digital: A number of participants called for the law to be amended to allow for electronic voting, which they argued will make voting easier and more accessible. The idea seems to have the backing of the dialogue’s chief coordinator, Diaa Rashwan, who said that it would increase the participation of expats, only 3.5% o f whom tend to vote in elections.

#2- The carrot: Giving people a day off could be the answer, according to Rashwan, who proposed making every election day a national holiday.

#3- The stick: Don’t want to vote? You could pay for it through your wallet under a proposal also backed by Rashwan which would see people who choose to abstain handed EGP 500 fines.

Cultural industries: President Abdel Fattah El Sisi told the dialogue’s board of trustees to speed up the discussion of the draft law establishing a new council for education and training, prompting Rashwan to cancel Thursday’s scheduled discussion on cultural industries in favor of the council.

11

PLANET FINANCE

Oil prices look to notch biggest monthly gains since January 2022 in July

Oil is having a big July: Oil is on course for its best month since January 2022 as the market tightens on OPEC+ supply cuts and rising demand in Asia, Bloomberg reports. US crude has risen 14% this month to sit above USD 80 a barrel for the first time since April. Brent is also at its highest level in more than three months, climbing 12% in July to more than USD 84 a barrel.

What they’re saying: “Record high demand and Saudi supply cuts have brought back deficits,” Goldman Sachs analysts wrote in a note, forecasting Brent to hit USD 86 by the end of the year. “The market has abandoned its growth pessimism.”

US to tread softly as Russian oil trades over G7’s cap: The Biden administration is reportedly imploring Western oil stakeholders to adhere to the G7’s USD 60 per barrel price cap on Russian crude, which Reuters data shows has been trading above the cap for two weeks, the newswire reports. Washington is reluctant to come down more harshly on traders and tanker owners flouting the cap out of fears of spooking the market.

EGX30

17,555

+1.2% (YTD: +20.3%)

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

11,789

-0.5% (YTD: +12.5%)

ADX

9,761

0.0% (YTD: -4.4%)

DFM

4,037

+0.2% (YTD: +21.0%)

S&P 500

4,582

+1.0% (YTD: +19.3%)

FTSE 100

7,694

0.0% (YTD: +3.3%)

Euro Stoxx 50

4,467

+0.4% (YTD: +17.7%)

Brent crude

USD 84.99

+0.9%

Natural gas (Nymex)

USD 2.64

+1.7%

Gold

USD 1,999.90

+0.7%

BTC

USD 29,246

-0.4% (YTD: +76.5%)

THE CLOSING BELL-

The EGX30 rose 1.2% at yesterday’s close on turnover of EGP 2.0 bn. Local investors were net buyers. The index is up 20.3% YTD.

In the green: Eastern Company (+8.7%), Juhayna (+5.9%) and ADIB (+4.6%).

In the red: Qalaa Holding (-3.0%), Ibnsina Pharma (-3.0%) and Mopco (-2.5%).

12

Diplomacy

Egypt expresses “great concern” at Niger coup

The region isn’t happy about the coup in Niger: Several Arab countries including Egypt have expressed concern over last week’s coup in Niger, whose leaders on Friday declared General Abdourahamane Tiani as head of state following the ouster of President Mohamed Bazoum. The Egyptian foreign ministry said the country is following the developments in Niger “with great concern,” while Saudi Arabia expressed its “total rejection” of the coup and the UAE condemned it.

Other West African nations aren’t, either: The 15-nation ECOWAS bloc of West African nations imposed sanctions on the country and threatened to launch military action against the coup leaders if Bazoum is not reinstated within a week in an emergency summit yesterday. This came as thousands of pro-coup demonstrators gathered in the nation’s capital, attacking the French embassy and burning flags of the country’s former colonial ruler.

13

AROUND THE WORLD

Palestinian factions agree to set up reconciliation committee during Egypt talks

Egypt hosts Palestinian reconciliation talks: Rival Palestinian factions agreed to set up a reconciliation committee to “end divisions and achieve Palestinian national unity,” Palestinian President Mahmoud Abbas announced yesterday following negotiations in El Alamein, Palestinian media reports. The talks brought together Abbas and Hamas leader Ismail Haniyeh for a rare face-to-face meeting, as well as other Palestinian groups, and came under Egyptian efforts to end years of intra-Palestinian conflict and form a unity administration.

One analyst isn’t optimistic: “The best way to kill something is to form a committee for it,” said Palestinian political scientist Moukaimer Abu Saada.

The talks are getting a lot of attention internationally:Associated Press | AFP | Politico | The National | Al Arabiya | Times of Israel.

ALSO- Lebanon’s central bank governor leaves office: Riad Salameh’s 30-year tenure as a governor of the Lebanese central bank has come to an end, with his legacy destroyed by the collapse of the country’s banking sector and corruption accusations, Reuters reports.

14

BLACKBOARD

Lessons learned: What low- and middle-income countries did to address education recovery after covid-19

After being upended by covid-19, few low- and middle-income countries successfully addressed learning and education recovery post-pandemic, according to a recent World Bank report (pdf). The report, titled Learning Recovery to Acceleration, looks at more than 60 education systems in low- and middle-income economies — including in Egypt — to assess “what countries have done so far to recover and accelerate learning since reopening schools, and what we have learned from their experience.” The report examined the type of policies and interventions these countries employed, the constraints they faced in reducing inequalities, and how countries can push forward with learning recovery and acceleration at scale.

The big takeaway: “Most countries did not fully comprehend the necessity for learning recovery and acceleration.” Less than one third of the countries examined in the report used the most cost-effective policy measures to improve learning, such as targeted instruction programs, the report says. Of the countries assessed, some 15% “supported teacher performance through structured pedagogy programs.”

IN CASE YOU NEEDED REMINDING- Education faced significant disruptions during covid-19, with schools in Egypt and beyond moving to remote learning or shutting down entirely for stretches of time in a bid to curb the spread of the virus. On average, schools around the world were suspended for 140 days, World Bank Regional Director of Human Development for Latin America and the Caribbean Jaime Saavedra said in a webinar discussing the report earlier this month. These closures and alternative teaching methods “cost large learning losses,” Saavedra noted. “If before the pandemic, 57% of children were not able to read and understand a simple text by the age of 10 — what we call learning poverty — that 57% could have increased to 70% because of the impacts of the pandemic,” he said.

The pandemic-induced learning gaps have significant financial ramifications: Lost schooling as a result of covid-19 is estimated to cost the current generation of students “as much as USD 21 tn in future earnings — equivalent to 17% of today’s GDP,” according to the report. Marginalized groups, including those from lower socioeconomic backgrounds, individuals with disabilities, girls, and ethnic or other minorities, are also expected to be disproportionately affected by the effects of the pandemic on learning systems, the report says.

The World Bank prescribes applying its RAPID policy framework for education recovery: The framework “organizes a menu of policy options” for countries to apply in education systems following any sort of shock or disruption to learning, with five key policy areas to follow: Reach every child and keep them in school; Assess learning levels regularly; Prioritize teaching the fundamentals; increase the efficiency of instruction; and Develop psychosocial health and wellbeing. The framework is designed to get students back on track following a shock to the system — such as covid-19 — and accelerate their learning to surpass where they were prior to the pandemic.

Although countries did implement parts of the RAPID framework, it’s been spotty and insufficient: Of the 60 countries assessed in the report, only a quarter implemented some form of expansion of social protection services that fall under the Reach category to re-enroll students and ensure they stay in school. Just above one third worked on assessing the extent of learning losses following the pandemic and implemented a more regular structure of classroom-based formative assessments. Meanwhile, a focused curriculum geared towards teaching fundamental knowledge and skills was evident in only 22% of countries, the report showed. Instruction efficiency — including implementing targeted instruction or tutoring programs, individualized self-guided learning programs, or supporting teacher performance with classroom based coaching — was reported in less than a third of countries covered in the report. One bright spot is the implementation of mental health and psychosocial support, where the report found that some 57% of countries increased the availability of these services within schools. However, a meager 27% bolstered or expanded school feeding programs.

Part of the problem: Fiscal constraints as national budgets were bogged down by the effects of the pandemic. “Approximately 40% of low- and middle-income countries reduced their spending on education, with an average decline in real spending of 13.5%,” according to World Bank and UNESCO data cited in the report. In Egypt, the government is planning to spend c.24.5% more on education, higher education, and scientific research during the current fiscal year than it did in FY 2022-23, although previous World Bank data indicated that we’re not spending enough on education, leading to a shortage in teachers and classroom infrastructure.

The prescription for the way forward: Countries need to begin moving to reflect “the urgency of the learning crisis” in their policies by enacting several measures, the report indicates. “The complexity of improving learning requires a comprehensive, multi-pronged approach: A package of coherent learning recovery and acceleration policies,” the report says. Recommended responses include throwing political weight behind developing a long-term response to addressing the issues caused by the pandemic, identifying the unique needs of their education system — and the resources at their disposal — and building a sustainable recovery program that involves all relevant stakeholders, including the government, NGOs, private sector businesses, and development partners.


Your top education stories for the week:

  • Here’s when students return to campus: The new academic year for Egyptian university students will start on 30 September.
  • 10 Egyptian universities are getting business centers with the help of US funding:USAID is joining the Arab League and the Arab Academy for Science, Technology, and Maritime Transport to establish and upgrade entrepreneurship centers at 10 universities.
  • A new tech uni: Ministers gave preliminary approval to allow a new private university in Al Salam City: the National Private University for Science and Technology.

JULY

31 July (Monday): Emigration Ministry’s Egyptians Abroad conference.

Late July: Egypt’s first Environment and Climate Investment Forum.

Late July-14 August: 2Q2023 earnings season.

AUGUST

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

1 August (Tuesday): EGX50 retirement date.

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

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

16-17 August (Wednesday-Thursday): Finance Ministry to pay out the third batch of the sixth phase of the export subsidies.

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.

September: JETRO’s second delegation arrives in Cairo.

1 September (Friday):Application deadline for the Smart Green Projects initiative.

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.

13-14 September (Wednesday-Thursday): Hydrogen Egypt Summit, Nile Ritz Carlton, Cairo.

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, Cairo.

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

18-19 September (Monday-Tuesday): Enterprise Finance Forum, St. Regis Hotel, Cairo.

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

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

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.

30 September (Saturday): The start of the new academic year for Egyptian universities.

OCTOBER

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

2-4 October (Monday-Wednesday): Sharm Rendezvous - Ins. Market, Rixos Premium Seagate, Sharm ElSheikh.

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

6 October (Friday): Armed Forces Day.

9 October (Monday): The Narrative PR Summit, Somabay Red Sea.

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

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

9-15 November (Thursday-Wednesday): Intra-African Trade Fair, Cairo.

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)

30 November-12 December (Thursday-Tuesday): COP28, Dubai.

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.

Now Playing
Now Playing
00:00
00:00