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Monday, 4 Sep 2023

What We're Tracking Today
Privatization
Investment Eit
Energy
Startup Watch
Moves
Last Night’s Talk Shows
Egypt In The News
Also On Our Radar
Planet Finance
Blackboard
Calendar

UAE-based firm acquires 30% stake in Eastern Company

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Today at a glance

1

Privatization

UAE-based firm acquires 30% stake in Eastern Company.
2

Investment Watch

Eni & Friends to invest USD 7.7 bn in Egypt in 4 years.
3

Energy

Egypt takes out new contracts to hedge against rising oil prices -Asharq.
4

What We're Tracking Today

Japan’s foreign minister Yoshimasa Hayashi is in town.
5

What We're Tracking Today

There are signs that the EGP-USD parallel market is cooling.
6

Also on our Radar

Hassan Allam joins OC to work on Eagle Hills’ new North Coast resort project.
7

Also on our Radar

EgyptAlum + Arab Aluminum distance themselves from price gouging allegations.
8

Also on our Radar

The government’s anti-money laundering unit is getting new powers.
9

PLANET FINANCE

The Saudi sovereign wealth fund is creating a national champion in its steel industry.
10

BLACKBOARD

A new cohort of bilingual students is on the way at Egyptian public schools.

Monday, 4 Sep 2023

What We're Tracking Today
Privatization
Investment Eit
Energy
Startup Watch
Moves
Last Night’s Talk Shows
Egypt In The News
Also On Our Radar
Planet Finance
Blackboard
Calendar
1

What We're Tracking Today

Japan’s top diplomat to hold talks with El Sisi, Shoukry

Good morning, everyone, and welcome to a blockbuster morning for news, where the top headlines include the surprise sale of a large stake in Eastern to a UAE-based company and confirmation that Eni and its partners are planning a massive ramp-up in investment here.

^^ We have the rundown on both stories in this morning’s news well, below. But first:

EGP WATCH- Is the parallel market for greenbacks cooling? The EGP is reportedly now trading at 38-39 per USD in the parallel market — down from highs of 41 last week — as local banks step in to meet demand among importers for the greenback, Al Arabiya reports, citing unnamed sources. A large number of local banks have begun covering the hard currency needs of importers under certain unspecified conditions, the news outlet reports. The official exchange rate has remained pegged at EGP 30.96 since March.

Remember: The parallel market is, by definition, not transparent. Nobody has anything approaching “real” price discovery, meaning it’s near impossible to say with certainty “what the rate is” at any given moment in time — and that swings without regard to fundamentals are the norm. The EGP has lost almost half of its value against the USD since March 2022, and reduced inflows of hard currency has helped fuel a resurgent parallel market.

PSA- You may want to avoid the 26 July road for a while: A 400-meter segment of the 26th of July Axis has been shut down for six months for the construction of the Sixth of October monorail, according to a sta tem ent by Giza governorate. The road closed on Saturday in both directions from the top of the Nile Valley Street tunnel to the beginning of Lebanon Bridge. Detours are in effect, but don’t expect Google Maps to know them anytime soon.

UPDATE- The contract signed between Egyptian National Railways, Thales Group and Orascom Construction to upgrade the signaling systems on the Cairo-Beni Suef railway line is worth EUR 340 mn, according to a statement (pdf) put out by Orascom yesterday. The initial statement from the Transport Ministry on Friday didn’t disclose the contract’s value.

HAPPENING TODAY-

The Japanese FM is in Cairo: Japan’s chief diplomat Yoshimasa Hayashi will hold talks with President Abdel Fattah El Sisi and Foreign Minister Sameh Shoukry during his visit to Egypt today, according to a statement from the embassy. He will also hold a three-way meeting with Shoukry and Jordan’s foreign minister, Ayman Safadi. Hayashi was in Jordan yesterday, where he announced that Tokyo will extend a USD 100 mn loan to support the country’s electricity reforms, according to Reuters.

This comes four months after the Japanese prime minister visited Egypt, during which the countries upgraded bilateral ties to a strategic partnership.

It’s Labor Day in the United States and Canada, so markets there are closed and your friends in finance will be celebrating the last ‘real’ weekend of summer.

Africa pharma expo: It’s the second day of the Pharmaconex exhibition at the Egypt International Exhibition Centre. The event runs through to Tuesday.

Climate talks in Kenya: Climate leaders from across the continent will gather in the Kenyan capital today for the three-day Africa Climate Summit. Egypt’s UN high-level climate champion, Mahmoud Mohieldin, will be among those in attendance.

Erdogan to discuss grain pact with Putin: Turkish president Recep Tayyip Erdogan will attempt to persuade Russian leader Vladimir Putin to re-enter the Black Sea grain pact with Ukraine during talks in Sochi this week, according to Reuters. Moscow pulled out of the agreement in July and reimposed a partial blockade on Ukraine’s ports, threatening to provoke a fresh global food crisis.

HAPPENING THIS WEEK-

GO EAT HERE- The grand opening of Fôu. What do you do when you’re a rising star in the field of corporate law? If you’re arbitration lawyer Farah El Charkawy, late of Zulficar and Parters, you attend top European culinary schools (including Alain Ducasse in France) and then open your own patisserie (Instagram | website). Fôu’s grand opening is tomorrow (Tuesday, September 5) at 8pm in Zamalek at Marakez’s wonderful Villa M. Mabrouk, Farah — we can’t wait to taste what you’re creating.

PMI figures out tomorrow: S&P Global will publish August purchasing managers index figures for Egypt on 5 September. Private-sector activity has finally been showing signs of life in recent months, with the perma-contraction easing gradually over the past four months.

Foreign reserves figures will be out any day now. Expect the central bank to release figures for August before the week is out.

G20 summit: G20 leaders (sans Xi and Putin) will gather in New Delhi for the 2023 G20 summit on Saturday and Sunday. We’re also expecting an Egyptian delegation at the gathering, though it’s unclear which ministers will be in attendance.

Nigeria, newest G20 member? Nigeria is weighing membership in the G20, as President Bola Tinubu sets to attend the G20 Summit in India at the invitation of India’s PM Narendra Modi. (Reuters)

Bright Star 2023: The Egypt and US-led Bright Star military exercises started on Friday, and will continue through to 14 September. Some 19 countries are taking part in the drills while 15 others will be on hand as observers.. (Armed Forces statement)

FURTHER AFIELD- Other local news triggers to keep your eyes on as we move through September:

  • Inflation: Capmas and the CBE will publish the latest inflation data on Sunday, 10 September.
  • Interest rates: The CBE’s Monetary Policy Committee will gather to discuss interest rates on Thursday, 21 September.

THE BIG STORIES ABROAD-

There’s no single story dominating the front pages of the global business press this morning: The soaring budget deficit in the United States is the lead story in the Washington Post and the Wall Street Journal, while the Financial Times front page leads with a story on the assistance provided to Russian banks by Chinese lenders following Western financial sanctions.

ALSO- The financial press has quickly soured on Arm’s much-touted IPO. Two weeks ago it was being heralded as the savior of the US IPO market. This morning, it’s being described as a “disappointing bet” by the WSJ as investors ponder whether its potential future growth trajectory warrants SoftBank’s sky-high USD 50-55 bn valuation. We’ll find out the market’s response over the coming week or two as the pre-IPO roadshow begins.

FROM THE REGION-

Turkey + Israel are looking to deepen nat gas ties: “I had a productive phone call with Israel Katz, the Israeli energy minister, to discuss opportunities for bilateral and regional energy cooperation, including natural gas,” Turkish energy minister Alparslan Bayraktar wrote on X(formerly known as Twitter) yesterday. He will visit Israel to continue talks “at the earliest possible time,” he added.

ICYMI-

Missed this week’s Inside Industry? In our weekly vertical exploring all things industry and manufacturing, we featured Yasmine Khamis (LinkedIn), chair of Oriental Weavers, in our Manufacturer of the Month interview.

JOIN US FOR OUR FINANCE FORUM-

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.

This is our first two-day event,which should give us plenty of time to dive into the nitty gritty of this industry we love. Our panels will see CEOs, bankers, investors and founders gather to discuss the future and trends shaping banking, finance, fintech and NBFS.

Our full agenda will be out at month’s end. Among the topics we’ll be discussing:

  • Looking into the crystal ball: Top industry CEOs will join us on stage to answer tough questions on where we are as an industry, the forces that will shape all of our businesses going forward, and their views on dealflow in the year ahead.
  • Surviving nuclear winter: We discuss how private equity and venture capital players are tackling challenges including fundraising and deployment in an environment in which it’s awfully difficult to price your local asset in USD terms.
  • The robots are coming: We explore what the coming AI and big data means for the industry in our part of the world and what can bankers, NBFI, and fintech players do to capitalize on them.
  • What do you do when nobody wants to be a banker — and when those who are already (investment or commercial) bankers are either (a) dreaming of doing their own startup or (b) moving to Dubai (or, increasingly, Riyadh)? We go deep into the weeds with industry leaders on how they’re building talent for tomorrow.
  • NBFIs are a bubble. Prove me wrong: We chart the explosive rise of NBFIs and ask whether the industry is ready for a wave of consolidation. We’ll dive into whether consumer finance is starting to mature as a segment — and ask which sector is next.
  • What does 2024 hold in store for fintech: We dive deep into which categories are getting traction, which segments will account for the lion’s share of future growth, what business they would start today if they could, and what we can expect of the sector in the year ahead.
  • What’s a bank, anyway? Wherein we talk challenger and neobanks with the players looking to shake up the brick-and-mortar industry.

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

CIRCLE YOUR CALENDAR-

PSA #2- Calling all prospective master’s students: Applications for the UK government’s Chevening scholarship will open from Tuesday, 12 September and close on 7 November. The scholarship offers full financial support for students to pursue an eligible master’s degree at over 150 UK universities. Applications will be open here.

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

*** 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: The government wants more bilingual students at public schools. Here’s how they’re doing it.

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Get ready to embark on a sensational journey of entertainment. From October through December, London will be illuminated by the brilliance of three remarkable events, sponsored exclusively by Somabay. The laughter will be unstoppable at the uproarious Egyptian Trilogy comedy tour, followed by the enchanting Samar Tarik. Brace yourselves for a captivating finale with the mesmerizing Farah El Dibany. Somabay brings you an unforgettable trifecta of events that will leave you utterly captivated and eagerly anticipating each spectacular moment.

2

Privatization

UAE-based firm acquires 30% of Egyptian state-owned tobacco company

Eastern Company is getting a new major shareholder: An Emirati investment company has agreed to purchase a 30% stake in Eastern Company in a transaction that will see it become the single-largest shareholder in the state-owned tobacco manufacturer and help revitalize the government’s privatization efforts, according to a cabinet statement yesterday evening. The firm, Global Investment Holding, will acquire the shares from the Holding Company for Chemical Industries (CIHC) for USD 625 mn in a transaction that values Eastern at more than USD 2 bn.

That’s not all: Global Investment Holding (GIH) will also provide USD 150 mn to help Eastern purchase manufacturing inputs. The statement didn’t clarify whether this was included in the USD 625 mn figure, but Hapi Journal(citing an unnamed source) is reporting that the input financing is separate from the purchase price.

This is a very welcome surprise… Eastern’s majority shareholder, CIHC, said less than two weeks ago that it would only be willing to part with 15.3% of the company under the state’s asset sale program. Under yesterday’s agreement, the state-owned company will instead see its stake reduced from 50.95% to 20.95%.

…and unexpectedly fast: It was only in June that we first heard rumors of a potential Eastern stake sale, with Al Mal publishing an unconfirmed report claiming a UAE state institution had shown interest in the company. CIHC publicly acknowledged the existence of talks for the first time late last month after fresh speculation in the press named Philip Morris’ United Tobacco and Japan Tobacco International as potential bidders.

Global Investment Holding? While the cabinet statement says the buyer is Global Investment Holding, there is a DIFC company listed in the Dubaicompanies register as Global Investments Holding(with an “s” at the end of “Investments”). The UAE’s Sheikha Lubna Al Qasimi signed the agreement on behalf of the company. Sheikha Lubna is a respected public figure in the UAE and was the first woman to hold cabinet rank in the UAE, having served in posts including as minister of economy and planning at the federal level.

Is Philip Morris International involved? Companies that appear to be units of the global tobacco giant are indirect shareholders (here and here) in Global Investments (with an “s”) Holding, together with Emirati shareholders. Philip Morris has made no statement on an Egypt transaction that we can find.

What they said: The agreement “is an affirmation of the government’s determination to succeed in expanding the ownership base and encourage direct private investment in various sectors,” the cabinet quoted Public Enterprises Minister Mahmoud Esmat as saying. Esmat, along with Prime Minister Moustafa Madbouly and Finance Minister Mohamed Maait, attended the signing ceremony yesterday.

Remember: As part of its USD 3 bn assistance program with the IMF, Egypt earlier this year rebooted its long-stalled privatization program in a bid to attract FX inflows and shore up its external position. The government is now looking to rai se USD 5 bn by the end of the current fiscal year next June by selling stakes in 35 companies, one of which is Eastern Company. Privatization is a central plank of the government’s ambition to attract USD 40 bn in private investment by 2026 and double the private sector’s role in the economy to 65%.

Momentum picked up in July: The government announced in July that it had agreed with outside investors to sell a number of state assets for USD 1.9 bn, around USD 1.6 bn of which would be paid in FX. This included the sale of seven historic hotels to a consortium led by Talaat Moustafa Group, and ADQ’s purchase of minority stakes in Egyptian Ethylene and Derivatives Company (Ethydco), Egyptian Linear Alkyl Benzene (Elab), and Egyptian Drilling Company (EDC) for USD 800 mn.

Market reax: Cabinet published its statement after the EGX closed yesterday, so we’ll know better today how the market is absorbing the news. Eastern shares have been on a tear, rising about 18% over the past two weeks, including a nearly 6% gain yesterday, as they closed at EGP 21.50.

More cigarettes to hit the market: In an EGX filing (pdf) ahead of the announcement, Eastern said it would be upping production volumes by 15% to help address a market shortage amid allegations of price gouging by some sellers. The government last month said it was working to increase raw materials shipments to Eastern to help ease the shortage and put an end to soaring prices.

The news got attention in the global financial press: Bloomberg | Reuters.

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3

INVESTMENT EIT

Eni + partners to invest USD 7.7 bn in Egypt in four years

Eni has big investment plans : Italian energy giant Eni and its partners will invest USD 7.7 bn in their Egypt operations over the next four years, Ittihadiya said yesterday. This came during a meeting between Eni’s CEO Claudio Descalzi and President Abdel Fattah El Sisi yesterday, in which they discussed the company’s energy exploration and production plans.

We knew Eni was planning to step-up its spend on exporation, but this is a massive announcement (though obviously the figure includes a lot of spending on the production side of the E&P equation, not just exploration). The company was among the five multinationals Oil Minister Tarek El Molla recently said will spend USD 1.8 bn in fresh gas exploration. Eni, along with Chevron, ExxonMobil, BP and Shell, will drill 35 exploration wells over the next two years, the minister said.

We don’t have much in the way of specifics just yet: The company is looking to drill new exploration wells at several concessions in the Eastern Mediterranean, which according to an unconfirmed report in the local press in April, includes North East Hap’y.

Eni is one of the biggest players in the country’s sector: Eni, along with its partners, is responsible for producing around 60% of Egypt’ natural gas and operates the country’s largest field, Zohr, alongside the Egyptian General Petroleum Corporation. It also owns 50% of the Damietta LNG plant, one of the country’s two liquefaction facilities that are key to the government’s long-term export ambitions. Earlier this year it said it had made a “significant” gas discovery in the Eastern Mediterranean in cooperation with Chevron.

This is the latest investment pledge by a key international oil and gas firm: BP CEO Bernard Looney was in town for talks with El Sisi last week, during which he said the company will invest USD 3.5 bn in its Egypt operations over the next three years.

The government wants to ramp up exploration efforts: We heard last week that the Oil Ministry is planning to launch an international tender for 8-10 oil and gas concessions before the end of the year. And we’re still waiting on the results of a tender for 12 exploration blocks launched back in December.

Egypt is in need of fresh discoveries: The country’s gas output fell to a three-year low in 2Q 2023 on the back of production declines in the Nile Delta and disruptions at Zohr, which has been reported to be facing water infiltration issues. Decreasing gas supplies have contributed to the ongoing electricity shortages, which have caused rolling blackouts across the country since late July.

Gas doesn’t just keep the lights on: It’s a key source of hard currency for Egypt, and one whose importance has only grown in light of the ongoing FX crisis.

Other companies are prepping their drills: BP, ExxonMobil and Shell are among the other companies preparing new exploration drilling campaigns.

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4

Energy

Egypt takes out new contracts to hedge against rising oil prices

More oil hedging: The government has purchased fresh hedging contracts covering 35% of its estimated oil imports for the current fiscal year that ends in June 2024, As harq Busine ss reported yesterday, citing an unnamed senior government official. The contracts lock in crude purchases at around USD 75-80 per barrel, according to the official, below the USD 85 per barrel price projected in the FY 2023-2024 budget. The government expects the country to import around 100 mn barrels of crude this year.

The oil market has been on a tear so far this fiscal year: The price of Brent crude has climbed more than 20% since the end of June on the back of tightening global supply caused by OPEC+ production cuts and rising demand in Asia. Brent rose to its highest level since January last week, closing Friday’s session up 1.9% at USD 88.55 per barrel.

Who’s on the other side of the contract? Asharq’s source didn’t disclose which financial institutions the government has signed the contracts with. In previous years, it has signed contracts with Citibank and JPMorgan.

REMEMBER- The government’s most recent hedging contracts reportedly expired at the end of last fiscal year. It agreed to purchase hedging contracts in December after the war in Ukraine triggered extreme volatility in the global commodity markets in 2022.

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5

Startup watch

Sehatech closes USD 850k pre-seed round. PLUS: Nagaty invests in Nocks

Planet Startup is showing signs of life this morning: After what felt like a very slow summer for fresh funding to our startup scene, two local firms — one in health ins. and the other in real estate — bring news of recent raises.

Sehatech secures USD 850k in funding: Local healthtech startup Sehatech raised USD 850k in a pre-seed round from VC firm A15 and Beltone Financial’s venture capital arm, Sehatech CEO Mohamed Elshabrawy told Enterprise yesterday. The company declined to discuss specifics of the transaction or of its current operational performance.

About Sehatech: Sehatech is a third-party administrator (TPA), an organization that processes ins. claims on behalf of health ins. firms. Its proprietary tech automates claims and billing management between ins. companies and healthcare providers, helping insurers cut losses caused by human error, inefficiency, and fraud, the company said in a press release (pdf).

Where the money’s going: The company will use the fresh capital to “expand its team, accelerate product development, and enhance customer service,” according to the press release.

What they said: “Digitizing the TPA industry will have a significant social impact on the way mns of patients consume healthcare services, making healthcare more accessible and affordable for everyone,” Elshabrawy said in the press release.

Advisors: Alliance Law Firm provided legal advice to Sehatech.

Nagaty backs Nocks: Serial founder Mohamed “Nagaty” Aboulnaga (LinkedIn) has been appointed vice-chairman of high-end real estate startup Nocks after making an equity investment in the company, according to an emailed statement. Nagaty acquired a 10% stake in the firm in a USD transaction, company founder and CEO Mahmoud Bekheit told us yesterday, declining to disclose the value of the transaction.

Nocks: The company’s app allows house hunters to buy directly from de velopers and receive reward tokens worth 1% or more of their purchase in return, which they can then redeem with partner companies, according to the startup’s website. Nocks was founded by Bekheit (LinkedIn) last year.

The investor : Nagaty is co-founder and CEO of regional online marketplace Exits (acquired by his M&A advisory outfit Pie Consulting), a co-founder of Halan (now MNT-Halan), and has held positions at Careem, Fawry and Klivvr. He has also made investments in grocery and bakery delivery startup Breadfast and customer loyalty platform Gameball.

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6

Moves

Mashreq Egypt appoints Mohamed Talaat as head of retail banking

Mashreq Egypt has appointed Mohamed Talaat (LinkedIn) as its head of retail banking, it said in a statement ( pdf ) last week. Talaat returns to Mashreq after nearly five years away from the bank, during which he worked first as head of retail products at First Abu Dhabi Bank and then as head of retail and as CCO at Misr Digital Innovation, the digital arm of Banque Misr. Talaat has more than 20 years of experience in working in business, credit risk, and finance, and has worked extensively on digital transformation in the banking industry.

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7

LAST NIGHT’S TALK SHOWS

Eastern + Eni dominate business coverage on the Egypt’s talk shows

Another slow night on the airwaves: The only business / econ-related news on the airwaves last night was provided by Ala Mas’ouleety host Ahmed Moussa, who spoke to the spokespeople from the oil and public enterprises ministries about Eni’s investment plans and the partial privatization of Eastern Company (more on both of those stories in the news well, above).

Timing the Eastern sale: The quick timing of announcing the Eastern Company stake sale a few days after the government updated the state ownership policy sends a positive message to investors,Public Enterprises Ministry spokesperson Mansour Abel Ghani said on the program (watch runtime: 13:25).

Cheer up, smokers: The additional USD 150 mn provided as part of the acquisition agreement “will be used to significantly up production and overflow the market with 10 mn packs a day or more to end the current market shortage and price manipulation by local retailers,” he said. There will be no imminent official price hikes to tobacco products, he added.

Eni’s investment pledge: Oil Ministry spokesperson Hamdy Abel Aziz appeared on the show to discuss Eni’s announcement that it will invest USD 7.7 bn alongside its partners in its Egypt operations over four years (watch runtime: 3:28 | 3:18).

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8

EGYPT IN THE NEWS

The changing face of Cairo tops coverage of Egypt in the international press

The tension between preservation and destruction of Cairo’s history is the theme in the foreign press this morning as Haaretz reports on the completion of the Ben Ezra Synagogue restoration and the National becomes the latest to cover the ongoing demolition of parts of the City of Dead to make way for new freeways.

ALSO- NatGeo has put together a jam-packed 24-hour Cairo itinerary for tourists, feat. the obligatory pyramids trip, Coptic and Islamic Cairo, and koshary.

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9

Also on our Radar

Eagle Hills signs up Hassan Allam to work on new North Coast development. PLUS: New anti-money laundering regs + news from Madinet Masr, Misr Life Insurance and SAIB.

REAL ESTATE-

Eagle Hills x Hassan Allam: Emirati real estate developer Eagle Hills Properties has awarded our friends at Hassan Allam Construction an EGP 1.97 bn contract to build two areas in the first phase of its Soul Luxury Beach Resort on the North Coast, it said in a statement (pdf). The two areas are expected to take just over 2.5 years to build. Eagle Hills, which is owned by Emaar Properties founder Mohamed Alabbar, last week inked a similar contract with Orascom Construction for the construction of two other areas in Soul’s first phase.

Madinet Masr x ASEC Automation: Madinet Masr has signed an MoU with Qalaa Holdings subsidiary ASEC Automation to build the infrastructure and road network for the C avana proj ect at its Sarai development in New Cairo, the real estate developer said in a statement (pdf) Thursday. The project will cost an estimated EGP 100 mn and is set to be completed within 12 months.

COMPETITION-

EgyptAlum + Arab Aluminum distance themselves from price gouging allegations: Local aluminum firms EgyptAlum and Arab Aluminium have released statements — here (pdf) and here (pdf) — stating that they are not among 14 companies being sued by the Egyptian Competition Authority (ECA) over alleged price-fixing. The ECA recently reportedly filed charges against 14 aluminum companies, accusing them of collaborating to fix the price of the metal.

REGULATION-

The government’s anti-money laundering unit is getting new powers: Prime Minister Moustafa Madbouly has approved amendments to the executive regulations of the Anti Money Laundering Act that empower the government’s AML and terrorism funding unit, Al Mal reports. The unit will be put in charge of implementing the law, including by deciding the legal requirements to be imposed on financial institutions and businesses, and handling interagency communications.

NBFS-

Misr Life Ins. x SAIB: Misr Life Ins. has signed an agreement with Saudi lender SAIB that allows it to offer its ins. and investment products to the bank's clients via its branches across the country, according to Al Mal.

NEW CAPITAL-

Afreximbank is setting up in the NAC: The African Export-Import Bank (Afreximbank) has signed a USD 32 mn contract with the developer of the new administrative capital to purchase a 50k sqm land plot for its new Egypt headquarters, the Foreign Ministry said yesterday.

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10

PLANET FINANCE

The Saudi sovereign wealth fund is creating a national champion in its steel industry

Saudi sovereign wealth fund’s steel takeover: The Public Investment Fund (PIF) is on course to take over two of Saudi Arabia’s largest steel producers as it looks to create a giant “national champion,” it said in a statement yesterday. The wealth fund will take control of Sabic’s metals unit, Saudi Iron & Steel Company (Hadeed), and Al Rajhi Steel Industries after signing agreements for several transactions.

Here’s what’s happening:

  • The PIF will acquire 100% of Hadeed in a transaction giving it an enterprise value of SAR 12.5 bn (USD 3.3 bn). (Sabic stock exchange f ilin g, pdf)
  • Hadeed will acquire 100% of Al Rajhi Steel Industries in a share swap transaction. (PIF statement)
  • The transaction is expected to close by the end of 1Q 2024, which is when the final sale price will be announced.

ALSO FROM THE PIF- The PIF has sold its entire 10.9% stake in the country’s National Gas and Industrialization Company (GASCO) to Saudi investment management firm Jadwa for some SAR 491.2 mn (c. USD 130.4 mn). GIB Capital was the sell-side financial advisor. (GIB Capi tal stock exchan ge filing)

Prudential looks to Africa: British ins. Firm Prudential is pivoting to African markets after exiting the US and Europe to refocus on Asia. “We believe that over a period of time, Africa will provide us with [Asia’s] growth opportunity, as the markets mature, as the customers get a lot more aware of wanting and needing ins. as part of their protection, health coverage, as well as savings needs,” the company’s new CEO, Anil Wadhwani, told the Financial Times. The FTSE 100 insurer is already present in eight African markets including Ghana, Kenya, Uganda, and Zambia.

EGX30

18,726

-0.8% (YTD: +28.3%)

USD (CBE)

Buy 30.83

Sell 30.96

USD at CIB

Buy 30.85

Sell 30.95

Interest rates CBE

19.25% deposit

20.25% lending

Tadawul

11,456

-0.3% (YTD: +9.3%)

ADX

9,787

-0.2% (YTD: -4.2%)

DFM

4,090

+0.2% (YTD: +22.6%)

S&P 500

4,516

+0.2% (YTD: +17.6%)

FTSE 100

7,465

+0.3% (YTD: +0.2%)

Euro Stoxx 50

4,283

-0.3% (YTD: +12.9%)

Brent crude

USD 88.55

+2.0%

Natural gas (Nymex)

USD 2.77

-0.1%

Gold

USD 1,967.10

+0.1%

BTC

USD 26,029

+0.7% (YTD: +57.5%)

THE CLOSING BELL-

The EGX30 fell 0.8% at yesterday’s close on turnover of EGP 1.62 bn (23% below the 90-day average). Regional investors were net buyers. The index is up 28.3% YTD.

In the green: Eastern Company (+5.9%), CIRA Education (+2.0%) and Alexandria Mineral Oils Company (+0.9%).

In the red: Elsewedy Electric (-3.7%), Alexandria Containers and Cargo Handling (-2.7%) and Abu Dhabi Islamic Bank (-2.7%).

Asian markets are mixed in quiet trading early in today’s session. US and Canadian traders are off today for the annual Labor Day holiday.

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

Published every Monday in EnterpriseAM.

Read Blackboard
11

BLACKBOARD

The government wants more bilingual students at public schools. Here’s how they’re doing it

Plans to offer French, Italian and German as second language electives at public schools from grade 7 are in motion, as the government looks to bring Egyptian public school education in line with global development goals, sources at the Education Ministry told Enterprise. We spoke with officials at the Education Ministry and French and German embassies to find out how they are boosting the teaching of foreign languages at Egyptian public schools.

Expect changes next academic year: The new curriculum will not be implemented until the 2024-2025 academic year, giving the ministry time to develop the necessary infrastructure in schools to teach the languages and to make sure that the teachers are qualified prior to implementation, our sources at the ministry confirmed. A “large number of teachers” have been invited to attend the AUC’s one-year qualification program through an educational scholarship, our sources said.

More details to come: While the programs are still in their early stages and details on the nature of the curricula are still being ironed out, specialized committees of foreign language teaching advisors from the Education Ministry will set the general framework for the implementation of teaching foreign languages. The ministry has a plan to hire close to 30k new public school teachers to bridge the deficit in all educational subjects, including new languages, according to our sources.

Sprichst du Deutsch? Offering German in public schools meets an existing demand, as an attractive location for Egyptian students and job-hunters, an official at the German Embassy told Enterprise, with the provision of German in public schools reducing financial barriers and expanding Egyptian student’s access to language.

Where teachers are going for German-language teaching skills: The Goethe Institut(GI) offers in-service training for practicing Egyptian German teachers, as part of a cooperation between the Egyptian Education Ministry to boost German-language education at public schools. Teachers can follow the GI’s worldwide DLL teacher training program, which consists of six modules over an eight-week period of online and self-study through the GI learning platform.

Public-sector focused learning: The GI also trains in-service teachers from six public sector schools through the German Foreign Offices’ initiative, Schools: Partners for the Future (PASCH), launched in 2008. The curriculum follows didactic topics preparing students for the Goethe-Institut examinations at the GI locations in Cairo and Alexandria.

Funding is up for grabs: GI scholarships are on offer for teachers to enhance their German language skills, as are PASCH scholarships for language learning. Egyptian teachers working at public schools are eligible for full scholarships for the teacher training course at the institute and a 75% scholarship for the language courses, provided through the GI’s Bildungskooperation Deutsch project. PASCH also provides scholarships for language training and funds in-service teacher training.

German-language resources are provided through a joint project between the Education Ministry, GI and German publisher Hueber Verlag, whose language books have been adapted to match an Egyptian public school criteria, at the cost of “a few hundred EUR per year,” the embassy official said.

Peut-être français? The French Development Agency signed an agreement in 2020 with the government to support French-language teaching in Egyptian public schools through a consortium of French public operators — France Éducation International, Institut français d’Égypte and Réseau Canopé — an official at the French Embassy told Enterprise. The project, known as TrèFle, will develop a curriculum and assessment and evaluation framework for teaching French as a second language in public schools and train some 13k French teachers and inspectors, refining their professional skills including digital literacy.

Language resources included: TrèFle also plans to provide complementary educational resources for students and teachers and is creating brand-new textbooks and teachers’ guides for six levels that are expected to be used in all Egyptian public schools starting from the 2024-25 academic year. The resources will provide “up-to-date” methods and cultural approaches to language learning, the product of a collaboration between French and Egyptian experts. An additional 500+ hours of online learning will be available on the Education Ministry’s training platforms.

TrèFle is underway: The project has already trained some 500 teachers and supervisors from across Egypt in pedagogy and linguistics over the last eighteen months, to the point that the individuals are able to pass the International French Language Diploma (DELF or DALF). The first DELF results from November 2022 had a 96% success rate, the embassy official said.

Domino effect: Trained teachers become mentors and trainers for the new 13k teachers that TrèFle wants to train this year. If the rollout of the project is successful, all French teachers from Egyptian public schools will have benefited from the training and had their skill sets updated by 2024. Plus, by training Egyptian teachers rather than sending substitutes from France, the project centers the creation of a sustainable teaching practice for the French language in public schools.

French-funded: The officer declined to disclose the cost to train one school teacher in the TrèFle project in Egypt or the cost of providing educational resources to one school. However, they added that AFD is the sole funder of the projects, which aligns with France’s implementation of sustainable development and international solidarity policies.

Why French? “Egypt is a country with a long French-speaking tradition,” and it is currently the only language taught in all the public schools across the 27 governorates, the officer said. Over 160 French companies have a significant presence in Egypt, meaning that proficiency in French enhances employability within Egypt and opens up options for the youth across the region.

That’s not all: Public schools could see Chinese-language options added to the curriculum and the Italian Embassy is in the process of signing an MoU with the Education Ministry to support the introduction of Italian as a language option at public schools, various statements from the ministry have said. Meanwhile, Russian could also be announced after talks between the two countries’ Education Ministries, reports Ahram Online.

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CALENDAR

SEPTEMBER

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

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.

End of September: ADQ to acquire stakes in Elab, Ethydco and EDC.

3-5 September (Sunday-Tuesday): Pharmaconex, Egypt International Exhibition Centre, Cairo.

4-6 September (Monday-Wednesday): Africa Climate Summit, Nairobi, Kenya.

5 September (Tuesday): National Dialogue.

7-8 (Thursday-Friday): Regional Forum for Sustainability & Development, Cairo.

7 September (Wednesday): National Dialogue.

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.

13 September (Wednesday): Deadline for settling outstanding military service in FX.

15 September (Friday): Ultraibex Wadi Degla Protectorate clean-up event.

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

15 September (Friday): Deadline for applications to EGYAID scholarship 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 (insurance conference), 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.

20-23 September (Wednesday-Saturday): Cityscape Egypt, Egypt International Exhibition Center, Cairo.

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).

27 September (Wednesday): Deadline for bidding in the fifth phase of the investment map offered by the Industrial Development Authority (IDA).

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.

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

OCTOBER

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

October: Egyptian-Jordanian Business Council, Amman, Jordan.

October: Gov’t expects to finalize sale of Gabal El Zeit wind plant.

October - November: Gov’t expects to finalize sale of military-owned fuel retailer Wataniya.

1-3 October (Sunday-Tuesday) International Expotec for water economics management, Egypt International Exhibition Center, Fifth Settlement, Cairo.

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.

2 October (Monday): Government meeting with investors to look into liberalizing electricity grid.

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.

10-12 October ( Tuesday-Thursday) Ceramica Expo, Cairo International Convention Center.

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

December: Gov’t expects to finalize sale of military-owned bottled drinks company Safi.

December: Gov’t expects to finalize sale of Zafarana wind farm.

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.

June 2024: Gov’t expects to finalize sale of Beni Suef combined-cycle power plant.

1H 2024: Gov’t expects to finalize sale of four water desalination plants.

End of 2024: The launch of the high-speed train line linking Ain Sokhna with Al Alamein City.

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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