Language
العربية

Sections

About

Privacy & Support

Get EnterpriseAM daily

Available in your choice of English or Arabic

Monday, 11 Mar 2024

What We're Tracking Today
Economy
Economy
M&a Watch
Earnings Watch
Last Night’s Talk Shows
Egypt In The News
Also On Our Radar
Planet Finance
Blackboard
Calendar

Inflation defies all expectations, jumps to 35.7% in February

An independent publication supported by

Opening up a world of opportunity

Realize More

Live More

Powering with nature

Driving growth

Today at a glance

1

Economy

Inflation jumped to 35.7% in February.
2

Economy

We’re in for up to USD 9 bn from WB, EU.
3

What We're Tracking Today

QIA is still interested in TE’s stake in Vodafone Egypt.
4

What We're Tracking Today

Local banks have traded over USD 2.5 bn since Wednesday.
5

M&A WATCH

Beltone on track to acquire SODIC’s securitization arm.
6

EARNINGS WATCH

CI Capita, ODE, Raya Holding report 2023 earnings.
7

Also on our Radar

Tanmeyah, MSMEDA to lend out up to EGP 200 mn to microenterprises.
8

PLANET FINANCE

Saudi Aramco recorded its second highest net income in 2023.
9

BLACKBOARD

EGP float means it just got a lot easier for students abroad to pay their tuition, expenses.

Monday, 11 Mar 2024

What We're Tracking Today
Economy
Economy
M&a Watch
Earnings Watch
Last Night’s Talk Shows
Egypt In The News
Also On Our Radar
Planet Finance
Blackboard
Calendar
1

What We're Tracking Today

Ramadan kareem

Good morning, friends, and Ramadan kareem: We hope you’re hydrated and caffeinated and ready for your first Ramadan workday after Dar Al Ifta confirmed that today is the first day of the holy month.

So, when do we eat? Maghrib prayers are at 6:02 pm in the capital, and you’ll have until 4:49 am tomorrow to hydrate and caffeinate ahead of fajr.

Remember- Shops, malls, restaurants, and cafes will be allowed to stay open until 2 am during the month of Ramadan and the Eid Al Fitr holiday. While banks will be open for customers between 9:30am and 1:30pm (9am to 2pm for staff).

ALSO- Did you feel the quake? A 4.77 magnitude earthquake that hit West Turkey on Sunday was felt in Egypt, according to a report from the National Research Institute of Astronomy and Geophysics. No damages or casualties were reported in Egypt.

WATCH THIS SPACE-

QIA is still interested in TE’s stake in Vodafone Egypt: The Qatar Investment Authority (QIA) has resumed negotiations to acquire a portion of Telecom Egypt’s 45% stake in Vodafone Egypt, Al Borsa writes, citing sources close to the talks. The two sides are in discussions over the size of the stake and are expected to reach an agreement “within the coming few weeks.”

It’s been a long time coming: The Qatari fund has reportedly been eyeing TE’s share of Vodafone Egypt since early 2022, with talks failing to progress after the two sides failed to reach an agreement over the stake size — with QIA after TE’s entire 45% stake and the government being adamant about retaining at least 20% of the telecom provider. The remaining 55% stake in Vodafone Egypt is held by South Africa’s Vodacom.

What changed? The government has come around and is ready to part ways with TE’s entire stake in Vodafone Egypt, according to Al Borsa’s sources. The USD 35 bn Ras El Hekma agreement and the float of the EGP also helped reignite the Gulf investor’s confidence in the Egyptian economy.

Are other suitors out of the picture?Last we heard, Saudi wealth fund PIF and Abu Dhabi wealth fund ADQ were also interested in buying in.

ALSO- A secondary TE stake sale? The Finance Ministry is reportedly looking to sell another 10% of Telecom Egypt either this year or beginning of 2025. The potential stake sale would follow the government selling a 10% stake in the company in May 2023.

DATA POINT-

Cha-ching: Local banks have bought and sold over USD 2.5 bn on the interbank market since the EGP float Wednesday morning, bankers told Asharq Business. USD 600 mn were exchanged yesterday and USD 1.9 bn were traded between Wednesday and Thursday. The USD was selling for EGP49.15-49.30 when banks closed yesterday.

Another big day for local debt: The central bank yesterday raised EGP 94.4 bn in a nine-month t-bill auction — raising almost 4x its target EGP 25 bn. It also sold EGP 25 bn worth of three-month t-bills.

The sale follows the central bank raising EGP 102 bn-worth of one-year and six-month bills last Thursday — EGP 40.7 bn of which came from foreign investors whose confidence was reignited in Egypt post float.

CIRCLE YOUR CALENDAR-

El Sisi to take oath of office in April:President Abdel Fattah El Sisi will be sworn in for his third term in office before members of the House of Representatives on 2 April. El Sisi was re-elected for his third six-year term in December.

Egypt to host the 2027 African Games: Egypt officially secured the right to host the 2027 African Games yesterday on the sidelines of the 2023 iteration of the event in Ghana. Egypt received initial approval from the African Union to host the quadrennial event for the second time in December, after first hosting the tournament in 1991.

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

WAR WATCH-

Ceasefire talks continue: Egyptian officials have been in contact with senior Hamas and Israeli figures regarding a ceasefire in Gaza under a mandate from the Egyptian presidency, sources told Reuters. Egypt, Qatar, and the US have been working to try and secure a six-week ceasefire in Gaza and a hostage exchange, after hopes of reaching an agreement before Ramadan were shattered, US and Israeli officials told Axios.

THE BIG STORY ABROAD-

It’s a quiet Monday morning in the global business press — and quieter still across the Arab world with the start of Ramadan. No single story has gripped the imagination of the business press.

Dueling “red lines”: Joe Biden says that Israeli forces invading Rafah would be a “red line,” prompting Benjamin Netanyahu to reply that his red line is preventing another Hamas attack. Biden told MSNBC on Saturday that he would not accept “30k more Palestinians dead.”

Palestinians in Rafah are starting the Holy Month on the verge of starvation. We have no words.

THE WEEK AHEAD:

  • OPEC will publish its monthly report tomorrow, while the International Energy Agencywill release its oil market report for the month on Thursday.
  • Joe Biden will present his 2025 budget proposal to Congress later today.
  • Russian voters go to the polls Friday through Sunday, with Vladimir Putin expected to be elected to a fifth term as president.

ALSO- The 2024 Oscars just wrapped up, with the red carpet being rolled up as we hit dispatch. Among the highlights:

  • Oppenheimer sweep: Cillian Murphy won best actor | Christopher Nolan won best director | Robert Downey Jr. won best supporting actor | It also won the most prestigious award of the night, best picture.
  • Best actress went to Emma Stone for her role in Poor Things.
  • Best original song went to Billie Eilish’s What Was I Made For on the Barbie soundtrack.

ICYMI- Missed this week’s Inside Industry? In our weekly vertical exploring all things industry and manufacturing, we looked at how manufacturers see the CBE’s decision to float the EGP and what it means for the sector’s growth prospects. You can check out the story here.

*** 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 how Egyptian students abroad are going to have an easier time getting FX to pay tuition fees.

Tags:

Escape to Somabay, where the sun-kissed shores await your arrival. Immerse yourself in the warmth of a perfect vacation, starting each day with the radiant embrace of the sun. Unwind, explore, and create unforgettable memories in this paradise by the sea.

2

Economy

Egypt’s annual inflation jumps to 35.7% in February, defying analyst forecasts

Inflation unexpectedly up, after easing for four months straight: Annual urban inflation jumped 5.9 percentage points to 35.7% in February from the month before on the back of an unexpected jump in food prices, according to figures from state statistics agency Capmas.

Monthly inflation tells the same story: Monthly inflation climbed to 11.4% in February, up from 1.6% the month before. This marks Egypt’s highest m-o-m jump in inflation, according to Bloomberg-compiled data that goes back to 2007.

Core Inflation accelerates: Annual core inflation — which excludes volatile items such as food and fuel — rose to 35.1% in February, up from 29% in January, according to central bank figures. Meanwhile, monthly core inflation surged to 6.1% from 2.2% in January.

No one saw this coming: Inflation had been cooling for four consecutive months after reaching a record 38.0% in September and reached its lowest level in a year in January, convincing policymakers and analysts alike that the economy was on a disinflationary path. Annual urban inflation was expected to slow to 25.1% on the back of a favorable base effect, according to a median forecast of 14 analysts in a poll by Reuters published over the weekend, with some even expecting the rate to cool to as low as 23.6%.

Food and beverage prices are culprit #1: Food and beverage prices — the largest component of the basket of goods and services used to calculate inflation — climbed by 50.9% y-o-y and 16.7% m-o-m in February.

But it wasn’t just food and beverage prices to blame this time round: Naeem Brokerage’s Allen Sandeep told Bloomberg that “unexpectedly large spikes” in food, health, and education prices drove an increase in inflation. The sector that faced the biggest increase in prices was alcohol and tobacco, coming in at 93.5% y-o-y and 8.5% m-o-m for the month.

The parallel market also deserves some of the blame: The “spike in the EGP’s parallel rate during the month to historical highs before it trended lower” also contributed to the unexpected jump in inflation, according to EFG Hermes’ Mohamed Abu Basha told Bloomberg.

Some were expecting an uptick in inflation to come, but not in February: The unexpected increase in inflation reflects prices in the month before the central bank floated the EGP and moved forward with a jumbo rate hike, which some believe will add additional inflationary pressures. The government is also expected to push ahead with a round of subsidy cuts that will increase the costs of consumer goods.

But others argue that the float could help us tackle inflation: Some commodity prices — such as the price of cooking oil — have already started to decline, Federation of Chambers of Commerce Secretary-General Alaa Ezz said on Thursday. The return of FX liquidity to the official banking system should also increase the supply of goods, leading to competition that will help drive prices down, Ezz added. On top of this, goods in store were prices at an implied exchange rate of around EGP 70 against the greenback, which should mean that we will soon see a fall in prices as sellers reprice goods — the USD was selling for EGP49.15-49.30 when banks closed yesterday.

ICYMI- The central bank made it crystal clear when it floated the currency last week that the country will “continue the transition to a flexible inflation targeting regime … and continue to target inflation as its nominal anchor.” This has been a long-held directive from the IMF during its loan negotiations with the government.

The uptick in inflation may make our local debt look much less attractive to investors: On the day after the float, the central bank reportedly raised EGP 87.8 bn in a one-year t-bill auction and JPMorgan along with Citigroup recommended that its clients stock up, but“high inflation readings cast their shadows on currency expectations as well as the local debt market” Al Ahly Pharos economist Esraa Ahmed told Enterprise. “The local debt market is expected to benefit from the recent CBE measures, yet surprisingly high inflation readings might lessen or slow down such benefits,” Ahmed explained.

Tags:
3

Economy

Egypt is in for up to USD 9 bn in funding from the World Bank, EU

World Bank, EU to funnel USD 8-9 bn into Egypt: The World Bank is expected to extend around USD 3 bn in financing to Egypt, Finance Minister Mohamed Maait said yesterday at a presser attended by Enterprise. The country will also receive some USD 5-6 bn in financing from the European Union, Maait separately told Asharq Business.

ICYMI- The announcements give further nuance to Maait’s statement last week that our agreement with the International Monetary Fund could help secure a total of USD 20 bn in foreign support. This figure includes around USD 11 bn from international partners — including the World Bank, European Union, Japan, and the UK — alongside the USD 8 bn IMF package we agreed on with the Fund last week and a still-in-talks USD 1-1.2 bn in climate finance under the Fund’s Resilience and Sustainability Facility.

More backers named: The African Development Bank, the Arab Monetary Fund, and “the European Bank” — which we assume is either the European Bank of Reconstruction and Development or the European Investment Bank — are also set to extend financial support, Maait said.

The latest on our IMF package: Our expanded USD 8 bn IMF package comes under a three-year program, Maait said. The first tranche will be disbursed after the IMF executive board signs off on the program, he added — the board will meet to consider the pact before the end of March.

Maait did not specify how much of the European Union funding is new or break it down into components or specific projects. He told Asharq Business that part of the EU funding will flow through the private sector and part will be in funding for the state budget.

The fine print: Between private-sector investments and government-to-government programs, the European Union already has a deep pipeline of activities here. We don’t expect the EU to provide us with significant direct budget support. Instead, it will push ahead with a deep investment program, including projects already announced.

BACKGROUND- Egypt has attracted significant investment from European development finance institutions as well as other investors and corporates. The EBRD, European Investment Bank, Proparco, DEG, and BIO have kept private equity and venture capital firms in business for years now, and a number of them are not shy about taking direct positions here.

OTHER KEY TAKEAWAYS FROM MAAIT’S SPEECH-

#1- Gov’t fiscal targets for the next fiscal year have gotten more ambitious: The government is now targeting a primary surplus of no less than 3.5% for the fiscal year 2024-2025, 1 percentage point higher than the figure it had penciled in back in January. It also sees the debt-to-GDP ratio narrowing to below 90%, a 1.9 percentage-point downward revision from the January forecast.

#2- At least half of the Ras El Hekma proceeds are going to FinMin: No less than 50% of the proceeds from the USD 35 bn Ras El Hekma transaction will enter the state’s general treasury as EGP revenues, enabling the Finance Ministry to finance its expenditures and helping it minimize public debt. The USD will remain with the central bank to bolster FX reserves.

#3- Giving foreign debt markets a break: The FinMin doesn’t intend to tap foreign debt markets or issue any international bonds before the end of the current fiscal year in June, Maait said. Pundits have suggested that the combination of the float, Ras El Hekma, and the IMF program have made it possible for Egypt to once again access the eurobond market.

#4- Some subsidies are set to stay put:The government’s allocation to fuel subsidies will remain unchanged until the end of the fiscal year even if fuel prices change. The state also continues to offer bread at a fixed price despite production costs that have risen up to EGP 1.1-1.2 per loaf, Maait said.

#5- Others could go out the window: The Finance Ministry is in talks with the Federation of Egyptian Chambers of Commerce to scrap the 11% subsidized loans for industry and agriculture introduced last year in light of the interest rate hikes introduced last week, Maait told Asharq Business, adding that the government will continue to support the two sectors in other ways.

#6- Customs to dip? The government will not raise customs and is instead “considering reducing them in the coming period as it aims to achieve stability to alleviate the burdens on domestic production,” Maait said. Customs are calculated and paid in EGP based on the cost of the import — all of which got more expensive at the end of last week when we floated.

#7- A cap on public investment: The Finance Ministry will allocate no more than EGP 280 bn to public investment in next fiscal year’s budget. The cap on public investments for all state entities, meanwhile, has been set at EGP 1 tn to help create “space for the private sector and increasing its investments in the economy,” Maait said. The IMF, in announcing its assistance package, placed big emphasis on the Sisi administration’s pledge to slow down infrastructure spending.

Exceptions apply: The budgets allocated to all state entities for the next fiscal year will remain the same as this year’s, with the health, education, and industrial sectors being the exception, Maait said.

Maait’s presser caught the attention of the int’l press: Reuters | Bloomberg.

Tags:
4

M&A WATCH

Beltone set to acquire SODIC for Securitization as part of push into securitization

Beltone to acquire 100% of SODIC’s securitization arm: Real estate developer SODIC’s securitization subsidiary — SODIC for Securitization — is set to offload all of its shares to Beltone Financial Holding after its general assembly approved the decision on Thursday, according to an EGX disclosure (pdf). The transaction will see Beltone acquire SODIC for Securitization’s 5k shares at EGP 1k apiece and making an additional payment of EGP 1 mn — bringing the transaction’s value to EGP 6 mn.

The why: The move will make it easier for Beltone to securitize the portfolios of its growing fleet of non-banking financial services firms. It would also open new business opportunities for Beltone to lead transactions for third parties.Acquiring an already-licensed securitization company is also a quicker route to the market for Beltone, rather than setting up a new firm and applying for a license from the FRA.

Remember: Beltone Financial Holding signed a letter of intent to acquire SODIC for Securitization back in December.

Beltone will help overhaul SODIC’s businesses: SODIC’s general assembly also approved a decision to consult Beltone Holding subsidiary Beltone Investment Banking on a full corporate restructuring plan for some of its subsidiaries for the equivalent of USD 75k in EGP.

Tags:

5

EARNINGS WATCH

CI Capital, ODE, Raya Holding report 2023 earnings

CI Capital’s net income rose 31% y-o-y to EGP 1.04 bn in 2023 driven by strong growth across all of its business lines, the company said in a press release (pdf). Revenues increased 68% y-o-y to EGP 6.6 bn in the same period, while its loan portfolio expanded 4% y-o-y to EGP 18.3 bn.

Solid performance among its NBFS: Net income for CI Capital’s leasing arm Corplease grew 36% y-o-y to EGP 701 mn in 2023 — Corplease issued EGP 3 bn in securitized bonds over 2023 — while its microfinance arm Reefy’s net income rose 30% y-o-y to EGP 434 mn for the year.

The group’s investment bank recorded 88% y-o-y growth in revenues to EGP 964 mn in 2023, thanks to a strong turnout from its brokerage, asset management and investment banking divisions.

What they said: “CI Capital’s record performance was fueled by strong growth across all business lines despite multifaceted challenges, including interest rate hikes, elevated inflation levels, and a slowdown in transaction activities and foreign institutional interest,” said CEO Hesham Gohar.

ORASCOM DEVELOPMENT EGYPT REPORTS RECORD SALES-

ODE bottom line surges on record sales:EGX-listed Orascom Development Egypt (ODE) saw its net income rise 64% y-o-y to EGP 3.1 bn in 2023 on the back of record sales and “strong performance across the recurring income portfolio,” the company said in its earnings release (pdf). The property developer saw its revenues grow 49% y-o-y to an all time high of EGP 15.3 bn.

A good year for the hotel side of the business, real estate sales: Revenues for ODE’s hotels jumped 95% y-o-y to exceed EGP 3 bn over 2023. Net real estate sales came in at EGP 19.4 bn — the highest in the company’s history — and a 75% increase from 2022.

Optimism ahead: ODE plans to “accelerate profitable growth, create a more agile and cost-effective business, and generate additional shareholder value” over 2024, the statement said.

RAYA HOLDING’S INCOME RISES-

Raya Holding saw its net income after minority climb 27% y-o-y to reach EGP 441 mn in 2023 in part thanks to the currency depreciation, which worked in favor of the group’s export-oriented businesses such as its IT wing Raya IT, business process outsourcing wing RCX, and F&B supplier Raya Foods, according to its latest earningsrelease (pdf).

Revenues were up 53% y-o-y to EGP 31.3 bn in 2023, and were fuelled by a robust 87% revenue growth from its suppliers and installations and 43% growth in revenues from device and goods distribution. Revenues were helped by an increased proportion of foreign currency-denominated revenues, which rose to 24% of Raya’s overall top line.

The breakdown: Raya’s trade and distribution business unit generated 44% of Raya’s total revenues for the year. The second biggest contributor was the firm’s IT sector with 22%, followed by NBFS with 15%.

What they said: “In 2023, despite the notable macroeconomic hurdles such as elevated interest rates, inflationary pressures, and geopolitical tensions, Raya Holding managed to attain substantial advancements in revenue, profits, and cash flow,” the release said. “The company adopted strategic measures to optimize revenue in foreign currencies, broaden its export base, and enhance revenue streams from its overseas subsidiaries.”

Tags:

6

LAST NIGHT’S TALK SHOWS

Egypt’s talking heads bid adieu as Ramadan kicks off

The Ramadan talk show lull begins: It was a quiet night on the airwaves, with most of the nation’s talking heads absent from our screens. Kelma Akhira’s Lamees El Hadidi (watch, runtime: 0:37) and El Hekaya’s Amr Adib (watch, runtime: 0:51) announced their month-long Ramadan hiatus.

If you really need your dose of Adib, make sure you tune in during suhoor time when he will be sharing the screen with singer Asala for a “calm and relaxing” podcast dubbed Big Time.

Tags:

This publication is proudly sponsored by

7

EGYPT IN THE NEWS

Egyptians will have less food on their iftar tables this Ramadan

What’s on the iftar table? The Associated Press dives into the Ramadan festivities and foods across the Middle East as Muslims across the world welcome the holy month — the Egypt focus of the piece takes a look at how Egyptians are struggling to put food on the table this Ramadan.

Tags:
8

Also on our Radar

EFG Holding’s Tanmeyah, MSMEDA to lend out up to EGP 200 mn to Egyptian microenterprises

MSMEs-

Fresh funds for Egypt’s microenterprises: EFG Holding’s microfinance arm Tanmeyah and Egypt’s Micro, Small, and Medium Enterprise Development Agency (MSMEDA) will lend out a combined EGP 200 mn to local microenterprises under an agreement inked between the two sides, according to a joint statement (pdf). The two sides will hand out loans of up to EGP 220k to some 10k microenterprises.

What they said: “Through this partnership, we aim to empower microenterprises by providing not just financial assistance but also the necessary support and resources to thrive,” EFG Finance CEO Aladdin El Afifi said.

HOSPITALITY-

The Smokery is heading to Oman: Local fine dining restaurant chain The Smokery has inked a MoU to form a strategic partnership with the Omani government’s Oman Tourism Development Company to launch restaurants and a salmon smoking factory in the country, according to a joint statement (pdf). The project will have an estimated investment of approximately EGP 250 mn over three years.

The first of many Gulf expansions? The Smokery is also exploring the possibility of expanding into Saudi Arabia and the UAE, a company representative told Enterprise.

LEGISLATION-

#1- MPs greenlight amendments to Unified Budget Act: MPs gave final approval to amendments to the United Budget Act that will see the budgets of all 59 of the state’s economic bodies and the state budget presented in a new consolidated budget — dubbed the Public Government Budget. The amendments were drafted after consultations with international institutions including the IMF.

** Finance Minister Mohamed Maait last month unveiled the ins and outs of the amendments — read our coverage here.

#2- Amendments to the Traffic Law were also passed by MPs, raising the price of car plates to EGP 600 from EGP 150 and giving the prime minister the right to further increase prices by 10% every year. The increases will cover the rising cost of manufacturing and support the integration of modern technology in regulating traffic movement.

PHARMA-

Egyptian insulin to land in Cuba: Arab Company for Drug Industries and Medical Appliances (ACDIMA) will begin exporting Egyptian-made insulin to Cuba, according to a statement from the Health Ministry.

Tags:
9

PLANET FINANCE

An almost record year for Saudi Aramco, despite waning oil prices and production cuts

Saudi’s Aramco recorded its second-highest net income in 2023, despite falling 25% y-o-y to USD 121 bn on waning oil prices and lower output, according to the oil giant’s latest earnings release (pdf). The firm’s revenues also decreased by 18% y-o-y to USD 440 bn over the same period, the company said in a Tadawul filing.

And dividends were up 30% throughout the year, with USD 98 bn paid out to shareholders. The Saudi government — which owns 82% of Aramco — relies heavily on the oil giant’s lofty payouts, including royalties and tax, to bridge a widening budget deficit and finance its diversification away from oil, as Crown Prince Mohamed Bin Salman looks to diversify the economy.

Market reax: Aramco’s shares were up 1.4% to SAR 32.20 a share by the end of trading yesterday.

ALSO FROM THE KINGDOM- It’s not just Egyptian companies that have been heading to KSA: Some 350 multinational companies — including PepsiCo, Boeing, PwC, and Unilever — have set up regional headquarters in Saudi Arabia to be eligible to bid on government contracts as required by the country’s regional headquarters program. Big banks have been slower to join the program, citing regulatory concerns. (Financial Times)

GLOBAL MARKETS this morning: Hong Kong’s Hang Seng is the only Asian benchmark in the green this morning (+1.4% at dispatch time) as Asian shares sagged on the first day of trading this week. The Nikkei leads the losers, down 2.2% as we prepared to hit “send” on this morning’s issue.

The look ahead: Stock futures are down slightly after the Dow posted its worst week since October 2024. European benchmarks also seem set for a soft open later today.

EGX30

32,920

+5.2% (YTD: +32.2%)

USD (CBE)

Buy 49.09

Sell 49.22

USD at CIB

Buy 49.15

Sell 49.25

Interest rates CBE

27.25% deposit

28.25% lending

Tadawul

12,619

+0.3% (YTD: +5.4%)

ADX

9,234

+0.1% (YTD: -3.6%)

DFM

4,253

+0.4% (YTD: +4.8%)

S&P 500

5,124

-0.7% (YTD: +7.4%)

FTSE 100

7,660

-0.4% (YTD: -1.0%)

Euro Stoxx 50

4,961

-0.3% (YTD: +9.7%)

Brent crude

USD 81.81

-0.3%

Natural gas (Nymex)

USD 1.83

+1.4%

Gold

USD 2,183

+0.2%

BTC

USD 68,648

+0.2% (YTD: +62.7%)

THE CLOSING BELL-

The EGX30 rose 5.2% at yesterday’s close on turnover of EGP 7.5 bn (62.5% above the 90-day average). Local investors were net buyers. The index is up 32.2% YTD.

In the green: Fawry (+20.0%), E-Finance (+20.0%), and Elsewedy Electric (+10.9%).

In the red: Egypt Kuwait Holding (-4.2%), GB Corp (-3.3%), and Delta Sugar (-2.5%).

CORPORATE ACTIONS-

Misr Fertilizers Production Company (MOPCO) is paying out a dividend of EGP 2.0 per share on its 2023 earnings after its general assembly approved the decision, according to an EGX disclosure (pdf).

Tags:

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

Published every Monday in EnterpriseAM.

Read Blackboard
10

BLACKBOARD

It just got a lot easier for Egyptian students abroad to pay their tuition, expenses

Egyptian students abroad are going to have an easier time getting FX to pay tuition fees + expenses: Banks in Egypt have begun moving to fulfill pending requests from individuals looking to arrange foreign currency (FCY) for their children studying at schools and universities abroad, according to three government sources Enterprise spoke with. Many students abroad and their families have been struggling to get their hands on enough FCY to cover tuition fees and other expenses, particularly after banks imposed limits on the use of EGP credit cards for FCY transactions, our sources noted.

REFRESHER- Last week, the CBE moved to float the EGP, leaving the exchange rate “to be determined by market forces” after hiking interest rates by 600 bps at a surprise monetary policy meeting. The decision allowed Egypt to sign a USD 8 bn program with the International Monetary Fund, and could help us secure another USD 11 bn from international partners including the World Bank, European Union, Japan, and the UK, Finance Minister Mohamed Maait said.

How much are we looking at? One source we spoke to estimated that the pending requests currently stand at some USD 200 mn, although that figure changes on a daily basis as more requests come in. There are some 20k Egyptian students studying abroad, with each student’s annual education-related expenses — not including personal expenses — averaging at USD 20k, according to a Higher Education Ministry source.

Parents were forced to resort to black market: Prior to the CBE floating the EGP, leading banks to start moving on easing FCY and credit card restrictions, parents were forced to source FCY to cover their kids’ tuition fees and other expenses abroad from the parallel market, according to two parents speaking to Enterprise on condition of anonymity. These parents would have to buy FCY at the parallel market rate and then transfer the money to their children abroad through apps that didn’t impose the same limitations as credit cards.

Priority FCY spending goes to education + health expenses: Banks are prioritizing expenses for Egyptians who are studying or receiving medical care abroad, according to two banking sources Enterprise spoke with. That has been the case since banks began imposing limits on weekly and monthly FX withdrawals and foreign purchases in late 2022, with the CBE introducing exemptions for Egyptians abroad for educational or medical purposes.

Even as things start to look up for students abroad, there are calls to double down on higher education here at home: Students seeking education abroad typically fall into one of two camps: The first camp seeks a degree or specialization that’s not offered in Egypt or they’re looking for education that meets global quality standards, and these students typically go after higher education degrees in the US, UK, and other major global universities. The other camp — which is more of a minority — looks for universities that offer degrees at low price points, and typically go to more obscure universities. The Higher Education Ministry has sought to cut down on the second camp by refreshing its list of accredited universities whose degrees are eligible for degree equivalence in Egypt, according to our two ministry sources.

More high-quality options are coming to Egypt: The Higher Education Ministry has been working for the past several years to bring international universities to Egypt to establish branch campuses, with the government ratifying the International Branch Campus Act in 2018. Now, Egypt sees at least one foreign university setting up a branch campus in Egypt each year, according to former secretary general of the Council for Private and National Universities in Egypt, Seddik Abdel Salam.

Your top education stories for the week:

  • Egypt, Hungary to promote academic exchange: The Mansoura University's Faculty of Agriculture signed a MoU with the Hungarian University of Debrecen's Faculty of Agriculture last week to collaborate on and promote scientific and academic exchanges.
  • A minimum of 5% of all scholarships to go to STEM students: The Supreme Council of Private Universities will require all private and national universities to award 5% of their scholarships to students at STEM schools.
  • Egypt, Germany to boost cooperation on pre-university education: TheGoethe Institute will develop teacher training programs, help teachers qualify to teach German as a foreign language, and design a curriculum for German language teaching.
  • Another uni in the market: Al Ahly CIRA’s Saxony Egypt University of Applied Sciences and Technology (SEU) will kick off operations in September after it received the greenlight from the cabinet.
Tags:

CALENDAR

2024

MARCH

11 March (Monday): First day of Ramadan.

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

28 March (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

28 March (Thursday): Industrial Development Authority to close applications for 1 mn sqm of land in 10 different governorates.

29 March (Friday): Egypt removed from JPMorgan Chase’s Emerging Local Markets Index Plus.

APRIL

1 April (Monday): Deadline to bid for 23 blocks in an international oil and gas tender.

2 April (Tuesday): President Abdel Fattah El Sisi swearing in ceremony, New Administrative Capital.

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

15-21 April (Monday-Sunday): The IMF / World Bank Spring Meetings.

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

26 April (Wednesday): Clocks move forward one hour at midnight as daylight saving time starts.

28 April (Sunday): Grace period to ins. brokerage firms to comply with Law 215 for 2023 expires.

28-29 April (Sunday-Monday): Saudi Arabia hosts a World Economic Forum (WEF) meeting on ‘global collaboration, growth, and energy.’

29 April (Monday): The government’s car export scheme expires.

MAY

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

5 May (Sunday): Coptic Easter.

6 May (Monday): Sham El Nessim (national holiday).

20 May (Monday): Malaysian Palm Oil Forum in Cairo, with attendance from Malaysian Plantation and Commodities Minister Johari Abdul Ghani.

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

29 May (Wednesday): Virtual launch of Chicago Booth Executive Program.

JUNE

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

30 June (Sunday): June 30 Revolution Day (national holiday).

JULY

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

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

23 July (Tuesday): Revolution Day (national holiday).

SEPTEMBER

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

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

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

25-26 September (Wednesday - Thursday): The Asian Infrastructure Investment Bank’s (AIIB) 2024 annual meeting, Samarkand, Uzbekistan.

OCTOBER

6 October (Sunday): Armed Forces Day.

17 October (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

21-27 October (Monday-Sunday): The World Bank and IMF annual meetings.

NOVEMBER

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

DECEMBER

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

EVENTS WITH NO SET DATE

January 2024: The Red Sea Ports Authority is set to finalize an agreement with the Abu Dhabi Ports Group for the operation and maintenance of the tourist passenger terminal in the Sharm El Sheikh Sea Port.

February 2024: Egypt will sign a USD 1.5 bn financing agreement with the International Islamic Trade Finance Corporation (ITFC).

February 2024: Funds from the Islamic Development Bank for the high speed electric railway will get the sign off.

April 2024: President Abdel Fattah El Sisi will visit Turkey.

1Q 2024: Egyptian-Qatari Joint Supreme Committee.

1Q 2024: Opening of the newly developed Pyramids Plateau in Giza.

1Q 2024: The government is set to finalize the sale of the Gabal El Zeit wind farm.

February-May: The Grand Egyptian Museum could officially open to visitors.

March 2024: The USD 2.7 bn MIDOR Refinery is set to begin full operations.

May 2024: Arab Finance Ministers’ meeting at Egypt’s administrative capital.

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.

1H 2024: The European Union is set to hold an investment conference in Egypt during spring.

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

November 2024: Egypt to host the World Urban Forum (WUF12).

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

2025

EVENTS WITH NO SET DATE

2Q 2025: Safaga Terminal 2 to start operations.

2027

20 January-7 February: Egypt to host the African Games

EVENTS WITH NO SET DATE

End of 2027: Trial operations at the Dabaa nuclear power plant expected to take place.

Now Playing
Now Playing
00:00
00:00