We’re paying back a quarter of our foreign debt in 2024 alone

Good morning, wonderful people, and happy December. It’s almost inconceivable, but 2023 is now drawing to a close.

A BIG, HAIRY, IMPORTANT PSA- You need to call in your IT boss for a talk about securityamid an unconfirmed report that a second Egyptian blue chip has been hacked by LockBit, the world’s most successful ransomware gang. The report comes just a week after EGX-listed fintech giant Fawry confirmed its testing environment had been hacked by LockBit.

The allegation: A well-known cybersecurity and dark-web monitoring firm claims that LockBit has hit another high-profile Egyptian company. The monitoring outfit has posted what it says is a LockBit hack notice that alleges “we have stolen accounting data, audit data, commercial info, contracts private data … finance data, human resources data” and more. We have been unable to verify the claim and a company official reached yesterday declined to comment.

What this means: If it proves true, it suggests that LockBit has turned its sights on Egypt and other emerging markets — likely banking on companies here taking a less-sophisticated approach to cybersecurity.

On the whole, Egyptian firms tend to significantly under-invest in tech security, deploying low-or-no countermeasures, relying on outdated software and hardware infrastructure, failing to educate staff about how to practice good “security hygiene,” and having few systems in place to systematically assess and manage risk.

What do you need to do right now? Four things, we would argue.

Get a quick education. Start with this five-minute primer for CEOs (pdf) from the US Cybersecurity and Infrastructure Security Agency. CEO Monthly has a good read if you have 10 mins; it focuses on small businesses, but the principles are universal. And check out this guide for CEOs from the Carnegie Endowment for International Peace.
Bring in your head of IT / tech security / CTO / whoever is responsible and discuss this morning what your vulnerabilities are, what systems you have in place, and what they can do today to start setting things right.
Accept that you will probably have to pay money to upgrade your systems and protect your company. And trust us — whatever it is, it’s far less than you’ll pay if you get hacked.
Have your head of IT / etc start teaching staff today how to decide whether to click on a link or download a file on email.

** DO US A FAVOUR? Did this morning’s email land in your tabs? Please drag us to your inbox — it goes a long way toward making sure Enterprise makes it into everyone’s email inbox.

WATCH THIS SPACE-

#1- El Sisi holds tête-à-tête with IMF chief in Dubai: President Abdel Fattah El Sisi expressed Egypt’s commitment to carrying out structural reforms during talks with IMF Director Kristalina Georgieva on the sidelines of the COP28 summit in Dubai on Thursday, Ittihadiya said in a statement. In a post on X, Georgieva praised Egypt’s “commitment to macroeconomic stability” and affirmed the IMF’s support for its reform drive.

BACKGROUND- The IMF has twice postponed reviewing Egypt’s USD 3 bn program this year amid a delayed transition to a floating exchange rate. Pundits think Hassan Abdalla’s central bank will pull the trigger in the coming weeks after the wrap of the presidential election, a move that is anticipated to lead to a speedy IMF review and the disbursal of almost USD 700 mn of fresh financing from the lender.

Times have changed: The war in Gaza appears to be changing the Fund’s calculations, with Georgieva saying last month that it is “seriously considering” increasing the size of the loan. An unconfirmed report earlier claimed the loan could be increased to more than USD 5 bn.

Speaking of the EGP… It gained on the USD in the black market late last week after weeks of decline: The price of the greenback on the parallel market eased to EGP 46, down from the EGP 51 recorded the week before, according to Masrawy. Despite the EGP 5 drop, the gap between the official and parallel market rates still stands at around EGP 16.

The usual caveats apply: The parallel market is by definition thin and opaque, making it difficult to figure out what a fair value is.

What gives? Nobody is certain. Speculation encompasses any and all of the following:

A one-off drop in demand for the greenback may have beenhelped by news that the IMF was considering bumping up our loan program and that the EU is reportedly putting together a USD 10 bn investment package for us, former Banque Misr vice chair Sahar El Damati told Masrawy ;
Some believe that the EGP gains were driven by a drop in demand for imported goods and a drop in the government’s FX spending;
Others still point to rumors (largely debunked) that the state flooded the market with some USD 2 bn worth of FX late in the week;
And there is speculation that fewer people were snapping up FX on the local market to buy CIB and EFG Holding GDRs, a common mechanism to move funds out of the country to pay for offshore expenses.

We have more on all of that in the news well and Last Night’s Talk Shows, below;

#2-Israel’s war on Gaza has the IMF rethinking its MENA outlook: The IMF is revising its economic outlook for the Middle East and North Africa due to the impact of the war on Gaza on the rest of the region, it said in a blog post on Friday. The Fund said that it would downgrade its forecasts for the most “directly exposed” economies to the effects of the war, and that it’s ready to increase its support for affected countries in the region..

Remember: The IMF recently lowered its 2023 MENA growth outlook by 0.5 percentage points, and now expects regional growth to drop to 2.0% from 5.6% in 2022. It also downgraded its 2023-24 outlook on Egypt for the second time this year to 3.6% from 4.1% previously.

HAPPENING TODAY-

Today is the last day for Egyptian expats to head to the polls to cast their presidential ballots — which opened on Friday — and choose between incumbent President Abdel Fattah El Sisi, Al Wafd Party’s Abdel Sanad Yamama, the Egyptian Social Democratic Party’s Farid Zahran, and the Republican People Party’s Hazem Omar.

** And it’s exactly one week before the polls open here at home on 10-12 December with the first-round results due on 18 December and a runoff, if necessary, to take place in early January.

HAPPENING THIS WEEK:

IT’S THE FIRST WORK DAY OF DECEMBER- As we near the end of the year — here are the key news triggers on which to keep your eyes on:

PMI: S&P Global will publish Egypt’s PMI figures for November on Tuesday, 5 December.
Foreign reserves: The central bank should release November’s foreign reserves figures this week.
Inflation: Capmas and the CBE will publish the latest inflation data on Sunday, 10 December.
Interest rates: The CBE’s Monetary Policy Committee will gather to discuss interest rates on Thursday, 21 December.

The Egypt Defence Expo (EDEX) will be firing off from tomorrow until Thursday:Around 35k defense and security professionals from across the world will land in Cairo for the defence expo at the Egypt International Exhibition Center. You can register to attend here.

THE BIG STORIES ABROAD-

The resumption of the war on Gaza is dominating the global front pages this morning as Israeli jets pound the south of the besieged enclave. The Western press is focusing on US officials’ increasing public criticisms of Israel’s campaign — statements which might carry more weight if the Biden administration wasn’t also ramping up arms shipments to aid its war effort. Everyone from Reuters and the Associated Press to the Financial Times and the Wall Street Journal have the story.

Israel turns to AI to amplify Gaza destruction: Israeli forces have been using an artificial intelligence system called “Habsora” to carry out strikes on residential homes where a single Hamas member might be residing, according to an investigation by +972 and Local Cal. The AI-based system, referred to by a former intelligence officer as a “mass assassination factory”, has allowed the IDF to generate more potential targets for its attacks than ever before, contributing to the destructive nature of Israel’s attacks during the initial stages of the war on Gaza, according to the study. (+972 | The Guardian)

ALSO-No “get-out-of-jail” pass for Agent Orange: The Trump election interference saga continues, with US District Judge Tanya Chutkan ruling on Wednesday that there is no legal basis that former presidents are immune to criminal charges after they leave office.

(New York Times | Reuters | Bloomberg)

MARKET WATCH-

Powell comments spark buy everything rally: Investors rushed into stocks, bonds, gold and risk assets on Friday on the back of remarks made by Fed chief Jay Powell. Despite a hawkish tone, the market interpreted his comments as signaling a sooner-than-expected pivot to rate cuts, sparking a rally across financial markets.

The S&P 500 rose 0.6% on Friday to close at its highest level since March 2022;
Bonds rallied, pushing the 10-year yield to three-month lows;
Gold climbed 1.6% to hit a record high;
The USD index fell 0.3%.

Powell is talking, but no one is listening: Though noting policy is “well into restrictive territory,” Powell said (watch, runtime: 1:09:45) that it would be “premature” to speculate that the Fed will ease policy. Still, investors remained optimistic. “Optimism that the Fed’s next move is going to be a rate cut, optimism that the US economy is going to avoid a hard landing — they’re strong drivers,” City Index analyst Fiona Cincotta told Bloomberg.

OPEC+ countries double down on supply cuts in 2024: Several OPEC+ countries agreed on Thursday to make deeper voluntary supply cuts in a bid to stabilize the markets, the alliance of oil producers said in a statement. Some 2.2 mn bpd will be removed from the market in 1Q 2024, with Russia committing to an additional 500k bpd cut and Saudi Arabia rolling over its 1 mnbpd reduction into 2024. The UAE, Iraq, Kuwait, Kazakhstan and Algeria will also reduce output during the period. The organization said it would gradually phase out the cuts starting 2Q 2024, depending on market conditions.

This isn’t the market reaction they wanted: Crude prices slumped almost 5% on Thursday and Friday following the announcement, which analysts attributed to the absence of a broader OPEC+ agreement and an expectation that the cuts would be deeper. “The market reaction implies disbelief in the full efficacy of the cuts,” Reuters quotes a JPMorgan analyst as saying.

CIRCLE YOUR CALENDAR-

A new round of GERD talks to take place this month: The fourth round of talks between Egypt, Ethiopia, and Sudan over the filling and operation of the Grand Ethiopian Renaissance Dam (GERD) is set to take place between 16-18 December in Addis Ababa, Irrigation Minister Hani Suweilam told local media on Friday (watch, runtime 5:57). This is the fourth round of talks since President Abdel Fattah El Sisi and Ethiopian Prime Minister Abiy Ahmed agreed to re-enter negotiations in July and reach an agreement within four months.

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

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Egypt has at least USD 42 bn in foreign debt repayments next year

Our 2024 debt burden just got higher: New central bank projections (pdf) out on Thursday see us spending at least USD 42.3 bn on foreign debt repayments in 2024.

Long, medium term debt rise: Egypt will have to pay some USD 32.8 bn — 20% of our total external debt — to fulfill medium and long-term debt obligations in 2024. This marks a USD 3.6 bn increase from the bank’s September estimates, which put our medium and long-debt repayments at USD 29.2 bn for next year.

What’s our short-term debt service looking like? Egypt will have to repay an additional USD 9.5 bnin short-term debt obligations during the first half of 2024. The largest chunk of the payment is scheduled for February and March. Short-term debt payment projections don’t extend beyond June.

Total external debt inches down: By the end of the fiscal year 2022-2023, Egypt’s total external debt sat at USD 164.7 bn, down from USD 165.4 bn in March 2023, but still about USD 9 bn higher from the figure recorded at the end of the fiscal year 2021-2022.

Remember: Egypt’s external debt has quadrupled over the past decade, reaching a record high of USD 165.4 bn at the end of March due to increased borrowing from multilateral lenders and international debt markets. This equates to around 40.3% of GDP, below the IMF’s 50% threshold for manageable debt levels, according to the report. More than two-thirds of the country’s external debt is denominated in USD.

TOOLS TO HELP US MANAGE-

#1- GCC deposits:

UAE has renewed a USD 1 bn deposit that matured in July 2023 to be now due in July 2026, the report shows. The UAE has USD 5.7 bn in total deposited at the CBE.
Kuwait has renewed a 2 USD bn deposit that matured in April 2023 to now be due in April 2024, according to the report. Kuwait has USD 4 bn in total deposited at the CBE. A local report suggested last month that Kuwait also renewed the other USD 2 bn deposit to be due in September 2024 — this was not reflected in the CBE report, which tracks data until 1 July 2023.
Another USD 5 bn could be coming our way from UAE and Saudi, according to unconfirmed reports out in October, although this could also refer to a rollover of maturing portions of existing deposits.

#2- Larger IMF program: The IMF is “seriously considering” increasing our USD 3 bn loan program as the conflict in Gaza poses difficulties for the country, with Egypt reportedly in talks to raise the program to USD 5 bn.

#3- More FDI + state asset sales: The government wants to raise FDI of USD 12 bn in the current fiscal year, almost half of which is expected to come from the state privatization program, which is expected to raise around USD 5 bn until the end of June 2024. The program now includes 35 state-owned companies and the list could see newcomers in the coming months.

#4- Softer loans: Egypt is looking to secure USD 3 bn by the end of the current fiscal year through bond issuances and international loans. We already halfway through our target after securing USD 500 mn from Deutsche Bank and the Arab Banking Corporation, USD 500 mn from a samurai bond issuance in November, and USD 478.7 mn from our maiden panda bond issuance in October.

#5- Tourism revenues: The country is on track to reach USD 14 bn of tourism revenues in 2023, a rise of nearly 15% compared to 2022. The Tourism Ministry is planning to increase that figure by another 25% next year.

#6- Initiatives to bring in FX: Recent government initiatives to drum up FX include allowing expats to import cars in return for depositing fees in FX and settle any outstanding military service for USD / EUR 5k. The government also introduced a program allowing foreigners and Egyptians abroad to buy real estate in FX, while a separate program offers investors generous tax breaks if they use hard currency to fund at least half of the investment cost of industrial projects.

Egypt’s net foreign liabilities hit record high in October as FX pressure mounts

Egypt’s net foreign liabilities hit a record high in October as pressure on the country’s external position continued to mount. Our net foreign asset deficit widened to USD 27.2 bn from USD 26.8 bn in September, according to Enterprise calculations based on Central Bank of Egypt figures.

It was because of the CBE: The central bank’s net foreign assets widened to negative USD 11.3 bn last month from negative USD 10.5 bn in September, the figures showed.

FX liquidity in the banking system eased thanks to both lower liabilities and higher assets, with net foreign assets in commercial banks improving to negative USD 15.9 bn from negative USD 16.4 bn in September.

Egypt auto sales recovery stutters in October

Automotive recovery stalls: Auto sales fell back in October, dashing hopes that the sector was beginning to turn a corner after an 18-month slump caused by the FX crisis. Distributors sold less than 9k vehicles in October, down 9% from September when sales rose to their highest level in a year, according to figures released on Thursday by the Automotive Marketing Information Council (AMIC).

In details: The drop in sales was driven by a dip in passenger car and truck sales. Passenger car sales fell 12% m-o-m to 6,970 units, while truck sales saw a 23% m-o-m decline to 995 units. A 47% jump in bus sales failed to offset the declines.

Sales flat from a year ago: Sales were effectively flat y-o-y in October. Passenger car sales were 15% higher but did not offset declines in bus and truck sales, which fell 28% and 35% respectively.

The big picture: After a notable jump in September, the pullback in sales in October suggests that problems linked to securing FX still persist for auto distributors looking to refill their inventories. The prospect of a post-election float of the EGP has further increased pressure on the currency, pushing the greenback to unprecedented highs in the parallel market, making it more difficult and costly for importers to secure FX.

The caveat: AMIC figures reflect data contributed by member distributors, who include most (but not all) industry participants.

China’s Befar wants to build USD 2 bn chemicals production complex in Egypt

China could be readying more investment in Egypt’s industrial sector:China-based chemicals manufacturer Befar Group could build a USD 2 bn industrial complex for producing specialty chemicals in East Port Said under a letter of intent inked with the Suez Canal Economic Zone (SCZone) last week, according to a SCzone statement.

The details: The first phase of the project is expected to cost USD 500 mn and will be powered by solar and wind energy. It will create about 1k jobs. The SCZone didn’t disclose the manufacturing capacity of the project.

SCZone and China are cozying up:The SCZone inked agreements for green manufacturing and green energy investments with Chinese companies worth a combined USD 14.75 bn during China’s Belt and Road Forum in October. These include a new green hydrogen plant and potassium chloride facility, in addition to glass, bromine, and iron pipe factories.

More on the real-estate-for-FX scheme: Real estate developers are in discussion with the government over incentives for Egyptian expats and foreigners who opt to pay in foreign currency for purchase properties in Egypt from private-sector developers. Tarek Shoukry, the head of the Federation of Egyptian Industries’ real estate division told Enterprise. The program and incentives would be modeled on the expat car import initiative, he said.

Shoukry’s remarks came days after the Madbouly government said last week it is working on a new initiative that would extend a real-estate-for-fx scheme to private sector players.

100% cashback? The initiative could see home buyers pay 100% of the property price in cash in advance in exchange for an equivalent bank deposit, which would be refunded after 10 years, Shoukry explained.

Mechanism: It has not yet been determined whether the deposit will be refunded in FX or its equivalent in EGP at the time of redemption, Shoukry said. The initiative will be limited to foreigners and Egyptians abroad only, he added. Shoukry also stopped short of specifying a mechanism through which the state would finance the program.

BACKGROUND- The government approved in July a decision to remove the cap on the number of properties foreigners can own provided that they pay for the properties in hard currency. The loosening of restrictions was one of a basket of measures the cabinet enacted in a bid to ease the FX crunch.

Scatec to set up Egypt’s first hybrid solar + battery plant

Norwegian renewables developer Scatec will establish a 1-GW solar and 200-MWh battery storage project in Egypt — the country’s first — under an agreement signed with the Egyptian Electricity Holding Company (EEHC) at COP28 yesterday, it said in a statement. Scatec didn’t disclose the value of the project.

AfDB could provide the greenbacks: The African Development Bank (AfDB) has signed a letter of intent to finance the project “at competitive terms.”

FYI-A solar and battery storage plant combines electricity generation with battery storage, generating renewable power when solar energy is at its peak to be stored and later released as required when the sun is down. This makes “hybrid plants ideal for meeting region-wide energy needs during periods of high consumption,” the statement said.

What’s next: Scatec will work to secure the land and grid connection for the project.

Cabinet is onboard: Ministers gave the agreement their blessing at the weekly cabinet meeting on Thursday.

ALSO APPROVED BY CABINET-

Groundwork for State Grid’s 10-GW solar energy project: Cabinet also approved an MoU that will allow China Electric Power Equipment and Technology — a subsidiary of Chinese state-owned electric utility corporation State Grid — to begin its feasibility studies on a proposed 10-GW solar energy project.

Naguib plans to invest over USD 120 mn to turn motorcycles and three-wheeled tuk-tuks into EVs

Naguib wants to turn motorcycles and tuk-tuks into EVs: Naguib Sawiris is planning to invest at least USD 120 mn in a project that aims to replace motorcycles’ and tuk-tuks’ traditional combustion engines with electric motors, he told Asharq Business (watch, runtime: 00:30) on the sidelines of the COP28 climate summit.

BluEV to pull the levers? Sawiris’ plan will be carried out through e-mobility startup BluEVunder an investment agreement signed with Orascom Investment Holding (OIH) earlier this year, a source with knowledge of the matter told Enterprise.

Remember: Sawiris’ OIH became a strategic investor in BlueEV in May after making an undisclosed investment.

The “how”: BluEV operates a network of lithium-ion battery swapping stations for two- and three-wheeled electric vehicles, allowing users to replace their petrol engines with electric ones and replace drained batteries with fully-charged ones.

There’s more: BluEV will help you finance the transition. BluEV plans to team up with consumer finance firms at a later stage to make it easier for vehicle owners to get the required financing for replacing their conventional engines, our source said.

CIB secures USD 148 mn in financing from AfDB to support SMEs

The African Development Bank (AfDB) has approved a USD 148 mn financial package for CIB, which will be used to on-lend to its clients and strengthen its capital position, AfDB said in a statement on Thursday. The package includes a USD 90 mn subordinated loan and several lines of credit worth USD 58 mn, and will help the private-sector lender meet the FX needs of SMEs and corporates, according to the statement,

This part of a wider lending program: The AfDB’s country manager said last month the lender is lining up USD 349 mn of financing for public- and private-sector projects, USD 148 mn of which would be earmarked for on-lending to MSMEs and firms in the agriculture, renewables, desalination, and logistics sectors.

ICYMI- The AfDB last week signed off on a USD 131 mn support package for Egypt that will “promote private-sector development, support economic diversification and green transition.”

GIZA ZOO FACELIFT BACKED BY CHINESE FUNDS-

Military gets financing for Giza Zoo revamp: The Chinese Development Bank and the National Bank of Egypt will provide a EGP 832 mn long-term loan to the consortium of military-linked companies renovating the Giza Zoo and adjacent Orman botanical gardens, the Egyptian lender said in a statement (pdf) last week.

Remember: A consortium of companies including the National Authority for Military Production and Abnaa Sinai Construction and Building were awarded a 25-year contract last year to renovate and manage the historic sites.

Bernard Harrison as consultant + Worldwide Zoo for operations: Wildlife and ecotourism design company Bernard Harrison & Friends will serve as a technical consultant on the project, and the UAE-based Worldwide Zoo will carry out the operational work for the park, according to the statement read.

Countries commit USD 420 mn to loss and damage fund on opening day of COP28

Funds roll in for the loss and damage fund: Day 1 of COP28 saw more progress made on the loss and damage fund front than we’ve seen all year long, with countries pledging a combined USD 420 mn to seed the fund, helping developing nations in their fight against climate change.

Who committed? Five countries and the EU committed financing to the fund — host country, the UAE, and Germany pledged USD 100 mn each, while the EU said it will commit USD 145 mn. The UK (USD 40.6 mn), Japan (USD 10 mn), and the US (USD 17.5 mn) also made commitments, according to a statement.

Funds could start rolling out as soon as 1Q 2024: The World Bank, the fund’s interim host, could start doling out funds in three months, the bank’s senior managing director told Bloomberg. Meanwhile, World Bank head Ajay Banga told the Financial Times that the bank will not hand out any financing before “a raft of technical analysis” is completed.

The fund has been on hold for almost a year now: Little progress has been made on the landmark loss and damage fund over the past year after delegates from some 200 nations signed off on the pact at the close of COP27. On Thursday, around 200 nations agreed on the basic rules for how the fund should be run and elected the World Bank as interim host.

OTHER NOTABLE ANNOUNCEMENTS FROM THE FIRST DAYS OF COP28-

A USD 30 bn Emirati climate venture: The UAE is launching a USD 30 bn “catalytic climate vehicle” — dubbed Alterra — with the aim of improving access to climate funding for the Global South. The venture aims to mobilize USD 250 bn in green investments by 2030.
More climate financing courtesy of the IFC: The IFC and several major charity organizations launched the Allied Climate Partners, which aims to raise USD 11 bn earmarked for green projects in developing countries.
More renewable + nuclear commitments: Some 116 countries have committed to triple their renewable energy generation by 2030, while over 20 countries have inked a declaration with the aim of tripling nuclear capacity by 2050.

** Enterprise Climate will have in-depth coverage of all things COP28 starting tomorrow and until the summit wraps up.

EGYPT AT COP28-

We are in line for USD 270 mn in green funding: Egypt will ink some USD 270 mn worth of projects aimed at slashing the industrial sector’s carbon emissions, Environment Minister Yasmine Fouad told Asharq Business (watch, runtime: 4:08), adding that the projects will kick off at the beginning of 2024.

ALSO- El Sisi makes an appearance: President Abdel Fattah El Sisi attended day two of the climate summit, delivering a speech highlighting the necessary of financial and technical support for developing countries coping with climate change, according to an Ittihadeya statement.

EFG Hermes tops EGX brokerage league table in November

EFG Hermes continued to lead the EGX brokerage league table in November, with a market share of 20.8%, according to EGX figures (pdf). Rounding out the top five were Arab African International Securities (9.7%), CI Capital (6.1%), Mubasher Securities (4.5%), and Thndr Securities (4.4%). EFG has held the top spot every month but one so far this year.

Israel bombards south Gaza as efforts to extend ceasefire fail

Almost 200 killed as Israel resumes bombing of Gaza: Israeli forces have resumed the bombing campaign in Gaza after negotiations with Hamas to extend the temporary ceasefire collapsed. The IDF said on Saturday that it had bombed 400 targets in Gaza and 50 targets in Khan Younis in the first 24 hours following the end of the truce, airstrikes which according to the Gaza Health Ministry caused the deaths of 193 Palestinians.

Talks of a potential ceasefire extension have collapsed: A Mossad team that was sent to Qatar to negotiate a potential extension of the ceasefire was ordered to return to Israel after talks reached an impasse, the Israeli prime minister’s office said yesterday. During the week-long ceasefire, Hamas released more than 100 hostages in exchange for 210 Palestinians.

Israel is pushing thousands of Palestinians towards the Egyptian border: The Israeli military is expanding its devastating air campaign to the south of the territory, where it had previously ordered hundreds of thousands of civilians living in the north to flee to. It is now issuing evacuation orders for districts in the southern city of Khan Younis and instructing residents to move to the border town of Rafah and a small area on the coast called Al Mawasi. As many as 1.8 mn people — almost 80% of the population — have been internally displaced during the eight-week conflict.

Remember: Senior Israeli officials have publicly called for the ethnic cleansing of Gaza in response to the attacks on 7 October, and have previously tried to lobby Western governments to support a plan to push its inhabitants into the Sinai. An Intelligence Ministry report leaked in the Israeli press last month recommended that the government forcibly transfer the population over the border into Egypt, though Netanyahu downplayed it as a “concept paper.” A number of senior Egyptian officials — including President Abdel Fattah El Sisi — have said repeatedly this is a red line, and Prime Minister Madbouly threatened a military response if Israel tries to follow through.

Netanyahu wants to “thin” Palestinian population, says Israeli media: Israeli Prime Minister Benjamin Netanyahu believes “thinning the population” of Gaza is a key strategic goal for his government and has instructed Israeli Strategic Affairs Minister Ron Dermer to explore policy options, Israeli newspaper Israel Hayom reported Thursday.

ON THE GROUND- At least 15,207 Palestinians including 6,150 children and more than 4,000 women have been killed since 7 October | 112 UN staff have lost their lives | 20 hospitals and 46 medical facilities are out of service due to targeted attacks and a lack of fuel.

AID- Israel hampers humanitarian relief effort: Israeli forces said Friday that the entry of aid trucks from the Egyptian side to the strip would be prohibited until further notice, but allowed 100 to cross the Egypt-Gaza border yesterday.

Egyptian talk shows cover the sudden decline in the price of the USD in the parallel market

All about the USD: The nation’s talking heads were hyper-focused on all things USD last night after the currency dipped in the parallel market only weeks after reaching an unprecedented high that saw it above the EGP 50 mark. There is some speculation that the government played a part in the EGP’s gains, injecting USD 2 bn into the local market.

The experts believe otherwise: “It’s not that additional USD was pumped into the market, it’s that people have suddenly stopped buying [USDs],” economist Medhat Nafei told Kelma Akhira’s Lamees El Hadidi (watch, runtime 1:20). Banking expert Tarek Metwally, echoed Nafei’s remark, saying that the dip in the USD’s price in the black market can be attributed to lower demand for overpriced nonessential goods and lower government demand for the USD (watch, runtime 1:24).

Local gold prices haven’t been affected by the recent surge in global prices, Hani Milad, head of the Cairo Chamber of Commerce’s gold division, told El Hekaya’s Amr Adib (watch, runtime: 3:01). The increase local gold prices have seen over the past month is moderate in comparison to that seen by global prices, he added.

Remember: Global gold prices have been rising on speculation that the US Federal Reserve has reached the end of its aggressive monetary tightening cycle and will start cutting rates as soon as next year. Global prices rose 1.6% on Friday to reach USD 2.1k per ounce. Meanwhile, local prices remained unchanged from two weeks ago, with the price of 24-carat gold sitting at EGP 3,200 per gram.

Also on the airwaves last night

El Sisi attends COP28: President Abdel Fattah El Sisi was in Dubai over the weekend to attend COP28. (Masa’a DMC | watch, runtime: 0:46)
Egyptian expats go to the polls: It’s the last day for expats to cast their vote in the 2023 presidential elections. The polls opened on Friday. (Ala Mas’ouleety | watch, runtime: 4:29) (Al Hayah Al Youm | watch, runtime: 2:00)

#1-Taqa Arabia eyes Wataniya stations: Qalaa Holdings’ energy distribution arm Taqa Arabia is set to submit a binding offer to purchase an unspecified number of fuel stations from military-owned fuel retailer Wataniya after Taqa’s board approved the decision on Wednesday, the company said in an EGX disclosure (pdf). The company intends to finance the purchase through a combination of internal funds and external financing from banks and other financial institutions. The value of the stations has not been disclosed “due to the existence of competing offers,” the statement reads.

FYI- The current owner of Wataniya — the military’s National Service Projects Organization — acquired a significant minority stake in Taqa earlier this year.

Remember: The government expects to finalize agreements to sell at least 10% — and potentially as much as 100% — in Wataniya before the end of the year as part of the state’s privatization program.

#2-Blominvest Bank has increased its stake in Rameda Pharma to 5.1%, up from 4.9%, according to a disclosure (pdf) to the EGX on Thursday. The Beirut-based investment bank purchased 3 mn shares worth EGP 5.01 mn, making it the fourth shareholder to independently own more than 5.0% of Rameda after Equinox (18.0%), Saudi Seventh Investment (11.0%), and Ekuity (10.0%). Our friends at EFG Hermes brokered the transaction.

INVESTMENT-

Geidea wants to invest more in Egypt: Saudi SME fintech company Geidea wants to double its investment in the Egyptian market to USD 80 mn over the next 3 years, general manager of Geidea Egypt Ahmed Nader reportedly told Al Shorouk. Geidea’s new investments will focus on e-payments, restaurant management, and launching its own education academy in 1Q 2024, which will help prepare the local workforce for the job market.

Everyone wants to get a piece of Dubai Taxi: State-owned Dubai Taxi’s USD 315 mn IPO for 25% of the company set to take place today is more than 130x oversubscribed, reported the Dubai Media Office. In total, investors submitted bids worth AED 150 bn (USD 41 bn) for the emirate’s first privatization in over a year.

Two records with one stone: The USD 315 mn offering marks the most oversubscribed offering that Dubai has ever had, according to Bloomberg.

ICYMI- The IPO hype is definitely not over in the GCC: While US and EU investor enthusiasm for IPOs has dropped off a cliff after huge after share prices of recently floated companies like Instacart begin trading way below their listing price in a matter of weeks, it’s a different story in the GCC. Over the past few months, we saw Oman hold its largest ever IPO with state-owned gas pipeline operator OQ Gas Networks raising USD 749 mn along with regional oil and gas services giant ADES Holding, and Saudi car rental firm Lumi making their Tadawul debuts to overwhelming investor interest.

EGX30	24,735	-0.1% (YTD: +69.4%)
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	11,177	+0.7% (YTD: +6.7%)
ADX	9,539	-0.2% (YTD: -6.6%)
DFM	3,988	-0.1% (YTD: +19.5%)
S&P 500	4,595	+0.6% (YTD: +19.7%)
FTSE 100	7,529	+1.0% (YTD: +1.0%)
Euro Stoxx 50	4,419	+0.8% (YTD: +16.5%)
Brent crude	USD 78.88	-2.5%
Natural gas (Nymex)	USD 2.81	+0.4%
Gold	USD 2,089.70	+1.6%
BTC	USD 39,422	+1.5% (YTD: +139.3%)

THE CLOSING BELL-

The EGX30 fell 0.6% at Thursday’s close on turnover of EGP 4.1 bn (39% above the 90-dayaverage). Regional investors were net sellers. The index is up 68.7% YTD.

In the green: Orascom Development Egypt (+9.9%), Amoc (+3.7%) and Qalaa Holdings (+3.3%).

In the red: TMG Holding (-3.3%), EFG Holding (-1.6%) and Eastern Company (-1.2%).

CALENDAR

DECEMBER

1-3 December (Friday-Sunday): Egyptian expats vote in the presidential election.

4-7 December (Monday-Thursday): Egypt Defence Expo, Egypt International Exhibition Center.

9-15 December (Saturday-Friday) :The Engineering Export Council of Egypt’strade mission to Saudi Arabia.

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

10-12 December (Sunday-Tuesday): Voting in presidential election takes place in Egypt.

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

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

14 December (Thursday): Bidding deadline for five gold mine concessions in the Eastern Desert.

14-21 December (Thursday-Thursday): El Gouna Film Festival.

16-18 December (Saturday-Monday): Egypt, Ethiopia, and Sudan to resume talks over the filling of the Grand Ethiopian Renaissance Dam (GERD).

20 December (Wednesday): End of sugar export ban.

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

Signposted to happen sometime in December:

Gov’t expects to finalize sale of a stake in military-owned bottled drinks company Safi
Gov’t expects to finalize stake sale for military-owned fuel retailer Wataniya.
Gov’t expects to finalize sale of Zafarana wind farm
FRA to announce chosen consortium for credit rating license
Kenyan trade conference in Egypt.

EVENTS WITH NO SET DATE

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.

4Q 2023: EGX to launch a shariah-compliant index.

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

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

25 February 2024 (Sunday): Deadline for bidders for oil and gas expansion in the 23 new regions.

Q1 2024: Opening of the new developed Pyramids Plateau in Giza.

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.

2H 2024: Gov’t to launch the Cairo Ring Road BRT buses.

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 start operations.

2024

EVENTS WITH NO SET DATE

The Grand Egyptian Museum could be officially open to visitors some time between February and May 2024 .

Q1 2024: Opening of the newly developed Pyramids Plateau in Giza.

JANUARY

1 January (Monday): Egypt to join the Brics.

7 January (Sunday): Coptic Christmas.

17 January (Wednesday): A delegation of Egyptian companies to visit Istanbul.

25 January (Thursday): Revolution day.

FEBRUARY

11 February (Sunday): The deadline to apply for the Chicago Booth Executive Program

APRIL

9 April (Tuesday): Eid El Fitr (TBC).

25 April (Thursday): National holiday in observance of Sinai Liberation Day (TBC).

MAY

1 May (Wednesday): National holiday in observance of Labor Day (TBC).

5 May (Sunday): Coptic Easter.

6 May (Monday): Sham El Nessim (TBC).

29 May (Wednesday): Chicago Booth Executive Program

JUNE

15-19 June (Saturday-Wednesday): Eid El Adha (TBC).

30 June (Sunday): June 30 Revolution Day.

JULY

7 July (Sunday): National holiday in observance of Islamic New Year (TBC).

23 July (Tuesday): Revolution Day.

SEPTEMBER

2-5 September (Monday-Thursday): Egypt International Airshow, El Alamein International Airport.

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

OCTOBER

6 October (Sunday): Armed Forces Day.

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