We are getting the first of the IMF funds this week after executive board approved expanded loan program

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What We're Tracking Today

Egypt’s El Sisi begins his third term this week

Good morning, wonderful people, and welcome to the last full workweek of Ramadan. It is shaping up to be another busy week as we gear up to welcome the first of our IMF funds and President El Sisi’s third term.

So, when do we eat? Maghrib prayers are at 6:13 pm in the capital city, and you’ll have until4:16 am tomorrow to hydrate and caffeinate ahead of fajr.

WEATHER- It’s a foggy morning in Cairo. You may want to leave for work a tad earlier than usual as the Egyptian Meteorological Authority sees foggy skies across Greater Cairo from 4-9am. The capital is in for a high of 29°C and a low of 18°C, according to our favorite weather app.

It’s a little cooler in Alexandria, with a high of 26°C and a low of 14°C.

** DID YOU KNOW that we now cover Saudi Arabia and the UAE?

** Were you forwarded this email? Tap or click here to get your own copy delivered every weekday before 7am Cairo time — without charge.

HAPPENING THIS WEEK-

President Abdel Fattah El Sisi will officially begin his third term when he takes the constitutional oath before the House of Representatives at the new administrative capital.

Tuesday’s inauguration will see the presidency begin its move to the new capital, Administrative Capital for Urban Development CEO Khaled Abbas confirmed yesterday.

Get ready for a cabinet shuffle? El Sisi’s new term is likely to start with some new faces at the helm of some of the country’s ministries and other government bodies. Cue the rumor mill.

A vice president? There is talk that the government could appoint one or more vice presidents to accompany El Sisi during his third term, well-connected MP and TV presenter Mostafa Bakry said. (watch, runtime: 6:02).

The economics ministry resurrection? There is also “serious deliberation” on resurrecting the economics ministry, Bakry added.The Economics Ministry was scrapped during Mubarak’s time in 2001 but it remained part of the government’s fabric, with most of its function redistributed across several ministries, including the Planning and Economic Development Ministry currently held by Hala El Said. Youssef Boutros Ghali was the last to hold the position of Economics Minister.

** El Sisi has ambitious targets for his third term: You can check out our deep dives into the targets for:

HAPPENING TODAY-

It’s budget season: The draft state budget and the first ever Public Government Budget for the next fiscal year will be presented to the House today after the two documents were greenlit by the cabinet last week.

The headline figure: The Public Government Budget pencils in revenues of EGP 5.1 tn and expenses of EGP 6.4 tn for the next fiscal year.

ICYMI- Budget season is going to be a bit different this time round, with the issuing of the first Public Government Budget. The new budget — which does not replace the state budget — shows the budgets of all the state’s economic bodies in addition to the state budget collated together. The first phase includes some 40 economic bodies.

Other key targets from the draft budget to keep an eye on:

An increase of over 30% in allocations for the health and education sectors, which are deemed to be top priorities.
Channeling 50% of the privatization program’s proceeds into reducing the government’s outstanding debt and improving debt sustainability.
An EGP 1 tn cap on public investment for all state entities.

WATCH THIS SPACE-

#1- Egypt to restart LNG exports imports starting next month? The Madbouly government is reportedly considering buying LNG from outside the country to hedge against potential energy shortages ahead of the summer season after having just restarted exports — albeit in much reduced quantities — this winter, writes Bloomberg, citing unnamed sources it says are familiar with the matter. Inquiries have reportedly been made to launch deliveries starting next month through the summer using Jordan’s LNG import terminal in Aqaba, with plans to eventually have its own terminal.

This wasn’t the plan: After becoming a net exporter of LNG in 2018, Egypt has been trying to position itself an important LNG exporter to Europe and to fully utilize the 12 mn tons a year capacity from its two liquefaction plants in Damietta and Idku. However, a fall in domestic gas production and a rise in domestic demand coupled with an unusually hot summer and Israel temporarily halting gas supplies has derailed its plans. LNG exports dropped 52% y-o-y to 3.52 mn tons in 2023.

#2- Commodity prices fall: A number of retailers across the country have responded to government directives to slash commodity prices, Al Borsa reports. Poultry prices have already seen a 10% drop in prices over the past few days and are expected to decline by another 15% following Ramadan, Poultry Producers Union Chairman Mahmoud Al Anani reportedly told Al Borsa.

WAR WATCH-

Another round of ceasefire talks? Israel and Hamas will resume ceasefire negotiations in Cairo today, a security official reportedly told Al Qahera News (watch, runtime: 00:20). This comes after Israeli Prime Minister Benjamin Netanyahu agreed to send delegations to Egypt and Qatar to take part in ceasefire and hostage exchange negotiations, Reuters reported, citing Netanyahu’s office.

A lot of meetings on Gaza: Foreign Minister Sameh Shoukry has a busy weekend, meeting with Tariq Ahmad, the UK’s minister for the Middle East on Thursday and his French and Jordanian counterparts (watch, runtime: 30:41) yesterday to discuss the latest on Gaza. The parties reiterated calls for a ceasefire in Gaza and boosting humanitarian aid.

THE BIG STORY ABROAD-

It’s one of the quietest mornings for global business news that we can recall in a very long time — and it’s no surprise, really: Huge swaths of the business world are either taking time off this weekend for Easter or are in the final days of Ramadan.

MORNING MUST-READ: “Successful entrepreneurs are middle-aged, not young.” It’s not a myth that there are successful in their 20s — hello, Steve Jobs and Mark Zuckerberg — but US research on company data from 2007 through 2014 shows that:

The average age of a founder: 41.9
The average age fo the fastest-growing companies in the cohort: 45
Fifty-year-old founders were nearly 2x as likely as a 30-year-old counterpart to achieve “major success”
The least-likely to succeed: Founders in their 20s.

READ- He turned 55. Then he started the world’s most important company, the lead story in this morning’s Wall Street Journal, which looks at what middle-aged entrepreneurs can learn from Morris Chang, who was 55 when he created the world’s largest and most important chipmaking company.

AND- Age and high-growth entrepreneurship (pdf), in the American Economic Review, the 2020 paper the Journal cites.

CATCH UP QUICK-

FTX founder Sam Bankman-Fried was handed a 25-year sentence for crypto fraud. (CNBC)
European bank shares hit six-year high on surging profits and returns. (Financial Times)
US IPOs are picking up again — but don’t expect a flood just yet. (Axios)

Somabay set to make a splash again with World Aquatics triple event extravaganza: Somabay is hosting the World Aquatics series for the second year, featuring three events in March, May, and August. The series includes the World Aquatics Open Water Swimming World Cup 2024, World Aquatics Elite Beach Water Polo World Cup 2024, and the World Aquatics Under 18 Beach Water Polo Cup 2024.

IMF greenlights the dispersal of USD 820 mn after approving expanded USD 8 bn loan program for Egypt. PLUS: EU fastracks EUR 1 bn of aid package

IMF money incoming: The International Monetary Fund’s Executive Board has signed off on the USD 5 bn extension for Egypt’s extended fund facility (EFF) and completed its long-delayed first and second reviews of the facility, the multilateral lender said on Friday. Of the total USD 8 bn program, the Fund also approved a decision to let the state “immediately draw” around USD 820 mn, which should be arriving this week, according to comments made by Prime Minister Moustafa Madbouly yesterday.

Why the top-up? A challenging macroeconomic environment of high inflation, foreign exchange shortages, and mounting debt — triggered in part by the war in Ukraine and exacerbated by the war on Gaza and tension in the Red Sea — have “called for decisive domestic policy action supported by a more robust external financing package, including from the IMF,” the lender said.

Remember: Authorities announced the agreement on the extension of the program earlier this month after floating the EGP and enacting a jumbo 600-bps interest rate hike, months after recurrent hints from the IMF that we were in line for additional funding.

The IMF has taken note of recent progress: “Recent measures toward correcting macroeconomic imbalances, including unification of the exchange rate, clearance of the foreign exchange demand backlog, and significant tightening of monetary and fiscal policies, were difficult, but critical steps forward,” the Fund’s Managing Director Kristalina Georgieva said.

But one key target is yet to be fulfilled: A criterion on net international reserves was the one quantitative performance target for end-June 2023 that Egypt failed to meet. The Executive Board approved a request by the government for a waiver “on the basis of corrective actions,” the Fund said.

Sustained reforms are “subject to risks,”Georgieva added at the end of her statement. The Fund’s managing director warned that “externally, uncertainty remains high” and that “sustaining the shift to a liberalized foreign exchange system, maintaining tight monetary and fiscal policies, and integrating transparently off-budget investment into macroeconomic policy decision making will be critical.” She also cautioned that the country needs to manage the return of capital inflows well to reduce the risk of external pressures going forwards and to keep inflation under control.

This has been a long time coming: The IMF approved Egypt’s USD 3 bn EFF back in December 2022, but held off on disbursing most of it and delayed two reviews — initially scheduled for March and September of last year — after we failed to meet several key conditions of the loan, including a commitment to implement a fully flexible exchange rate.

More funds to follow? The expanded facility gives Egypt the right to apply for USD 1.2 bn in long-term, low-cost climate financing under the IMF’s Resilience and Sustainability Facility, Finance Minister Mohamed Maait confirmed yesterday.

A look into the IMF’s crystal ball:

The economy will grow at a 4.4% clip in the fiscal year 2024-2025, a 0.3 percentage point downward revision from its projection in January — and 0.2 percentage points higher than the government’s most recent forecast. The Fund’s growth forecast for the current fiscal year remains at 3.0%.
Inflation will decline to 32.1% at the end of this fiscal year, before halving to 15.3% by the end of FY 2024-25.
The budget deficit will widen to 6.3% of GDP this fiscal year and to 8.5% next year.
The primary surplus will jump to 7.1% of GDP this fiscal year before it recedes to 4.5% in the next.
FDI will exceptionally jump to 9.3% of GDP this fiscal year — thanks to Ras El Hekma — and return back to 2.5% next year.
External debt will rise to 43.0% of GDP this fiscal year and 45.4% next year.

The international press also took an interest in the story:Bloomberg | Reuters.

EU TO FAST-TRACK EUR 1 BN IN AID-

EUR 1 bn from the EU on its way? The European Union plans to expedite the delivery of some EUR 1 bn in macro-financial assistance to Egypt under its EUR 7.4 bn aid package by applying an emergency funding mechanism that side-steps the EU Parliament’s approval as well as an evaluation of the funding’s effects, the Associated Press reports, citing a letter penned by European Commission President Ursula von der Leyen to the parliament ahead of the package’s announcement. The plan is part of the bloc’s efforts to “make sure that a first significant contribution” reaches Egypt by the end of 2024, von der Leyen wrote.

The why: While it’s unusual for the bloc to bypass financing safeguards, European Parliament elections scheduled for 6-9 June mean that upholding these controls would slow the delivery of funds. Von der Leyen cautioned of a “rapidly deteriorating economic and fiscal situation” triggered by “a very large exposure to the economic effects of Russia ’s full-scale war of aggression on Ukraine, the wars in Gaza and Sudan, and the Houthi attacks in the Red Sea.”

Déjà vu?Egypt’s ambassador to the EU Badr Abdelatty told the press last week that the bloc would disburse some EUR 1 bn worth of concessional loans in the short term, confirming earlier reports from foreign media outlets.

The controversy: Fast tracking the package bypassess the oversight of the EU Parliament and does away with the need for impact assessments. Following the EU elections, the EU parliament will be “fully involved” with the remaining EUR 4 bn of macro-financial assistance that will be given out after Egypt commits to “more comprehensive” reforms, Von der Leyen added.

Remember: Egypt has over the past weeks lined up some USD 57 bn worth of foreign support — including the IMF’s expanded USD 8 bn loan, the EU’s EUR 7.4 bn package, USD 6 bn in financing from the World Bank, and ADQ’s USD 35 bn agreement for the development of Ras El Hekma.

SPEAKING OF RAS EL HEKMA- The second tranche of the funds from the Abu Dhabi wealth fund ADQ are expected to arrive in the nation’s coffers at the beginning of May, Prime Minister Moustafa Madbouly said (watch, runtime: 2:30). We received the first tranche of the payment late February.

How much are we talking? ADQ still has to pay the remaining USD 20 bn — USD 6 bn of which will be from UAE’s existing deposits at the Central Bank of Egypt.

Egypt auctions off more EGP t-bills, this time at a much lower yield

Another successful t-bill auction — this time at a significantly lower interest rate. The Finance Ministry raised some EGP 25 bn worth of one-year t-bills and EGP 35 bn worth of six-month bills on Thursday, according to data on the central bank’s website. The average yield of the one-year bills dropped to 25.9% from a record high 32.3% earlier this month, while the six-month bills‘s average yield dropped to 25.75% from 31.84%.

Demand is still high: The one-year bills received offers over 4x its original ask and six-month bills 2x its ask. Short-term local debt has been extremely attractive to both local and foreign investors since the central bank floated the EGP, with the central bank’s many t-bills auctions post float being met with high demand — a one-year bill auction a week earlier was met with a record EGP 408.1bn in demand.

Which explains the dip in yields: With the market stabilizing, the EGP finding its balance post float, and FX inflows resuming, investor confidence in Egypt and its economic stability has returned, meaning the central bank no longer needs to auction off bills at extremely high yields to reel investors in.

Also helping: The risk of further currency depreciation has waned and the premium to hold t-bills rose to a record compared to other emerging-market notes, sparking a renewed interest in carry trade — the process by which investors borrow at low interest rates to invest in emerging market currencies at higher rates. “Investors had waited for an inflection point in the local market story to get involved in size in carry trade positions,” Standard Chartered Bank’s Head of Africa Strategy Samir Gadio told Bloomberg.

But the boom could be short lived: “While t-bill auction demand is still robust, it could moderate further from recent record highs as yields ease,” Gadio added. “There was probably a lot of t-bill demand front-loading immediately after the devaluation.”

It’s more or less the same story for bonds: Last week the bank auctioned off EGP 2.9 bn in EGP fixed coupon three-year t-bonds at an average yield of 25.46% down from 26.23% earlier in the month. The auction saw bids for rates as high as 45%. Higher pricing on longer-term instruments generally reflects investors’ views of risk on that time horizon — but can also simply be a case of investors waiting to lock in better returns by seeing whether they can bid up the yield.

Egypt’s SCZone grants final approvals for industrial projects

New projects coming to the SCZone: The General Authority of the Suez Canal Economic Zone (SCZone) has greenlit a number of projects when it met yesterday, according to a statement.

#1- Orascom Industrial Parks to develop EGP 13 bn industrial complex: Orascom Construction subsidiary Orascom Industrial Parks received approval from the authority to develop and manage a EGP 13 bn integrated industrial complex in the Sokhna Industrial Zone. The complex will be implemented in two phases.

#2- Turkey’s DNM is setting up two projects: DNM Textile for Spinning, Weaving and Dyeing — an investment venture of Turkish clothing firm Eroglu Holding — received approval to move forward with a USD 40 mn denim factory in Qantara West Industrial Zone, as well as an industrial complex for spinning, weaving, clothing, mattress, and furnisher production. Some 70% of the denim factory’s production will be exported.

Remember: Local ready-made garment maker Eroglu Egypt — the local arm of the Turkish Eroglu Holding — will build a USD 150 mn ready-made clothing factory in Qantara West Industrial Zone, under a framework agreement inked with the SCZone. Meanwhile, Turkey’s Jade Textile signed a framework agreement to invest USD 30 mn in ready-made garments unit for a larger factory that will also house a USD 35 mn dyeing unit.

#3- SCZone’s green fuel is heading to Europe: The SCZone will create a route to transport green fuel produced in the zone to the Dutch Port of Rotterdam, which will help the fuel reach European markets, under an MoU inked between the two sides. The MoU will also see the two sides working on the green bunkering corridor that will link Singapore to Rotterdam through the Suez Canal, creating the first corridor for green bunkering between Asia, Africa, and Europe.

ALSO- Jotun inaugurates USD 100 mn factory: Norwegian paint manufacturer Jotun’s new USD 100 mn industrial paint and varnish factory has kicked off operations, according to a cabinet statement. Located in the Tenth of Ramadan industrial zone, the factory — Jotun’s largest venture in Egypt — has a production capacity of 70 mn liters per shift.

Another Madbouly tour: The inauguration came during Prime Minister Moustafa Madbouly’s tour to the Tenth of Ramadan industrial zone, where he also visited the factories of Beko, Haier, Fresh Electric, and Elsewedy Transformers. Monthly visits to manufacturers have become a staple in Madbouly’s agenda, in a bid to draw attention to the increasing importance of industry to narrow our trade deficit, and highlight Egypt’s natural position as an export hub serving Europe, Africa, the Middle East and beyond.

Egypt, Italy sign agreements to back MSMEs, vocational training, and much more

A raft of Egypt-Italy agreements: The Madbouly government and local private players have signed several agreements with their Italian counterparts, which will see Italy pour over EUR 150 mn into Egypt, according to a statement from the International Cooperation Ministry.

ICYMI- The EU agreed earlier this month on a EUR 7.4 bn support package for Egypt under a new strategic and comprehensive partnership, which aims to support the country’s economic stability and address migration flows into the bloc.

MSME SUPPORT-

#1- EUR 100 mn to back food security projects: The Italian Deposits and Loans Fund will back African MSME projects that focus on food security via a EUR 100 mn package under an agreement with AfreximBank.

#2- EUR 45 mn to support MSMEs: The Italian fund will support the Micro, Small, and Medium Enterprise Development Agency (MSMEDA) with a EUR 45 mn support package

#3- Financial support for Egyptian-Italian MSMEs: Italy’s ins.-financial group SACE has signed an MoU with the Bank of Alexandria to provide financial support for trade between Egyptian-Italian MSMEs. SACE has also signed another MoU with Orascom Construction to support Italian companies working on infrastructure projects in Egypt.

GRANTS-

Some EUR 5 mn grant agreements were inked between the International Cooperation Ministry and Italy’s Foreign Ministry.

#1- A EUR 3 mn grant will provide technical support for leather, furniture, and marble industrial zones in Egypt to optimize their production capacities.

#2- A EUR 1.8 mn grant will go to the National Council for Persons with Disabilities to boost its efforts integrating people with disabilities in society.

ALSO INKED-

Railways agreements: Italy’s hospitality group Arsenale will support the development of a tourist train in Egypt under an MoU inked with the Egyptian Railways Authority. The authority also inked an agreement with the Italian rail transport technologies developer MERMEC to procure a multiple-unit train.

Vocational education agreements: The General Confederation of Italian Industry (Confindustria) and the Federation of Egyptian Industries will cooperate on technical and vocational education under an MoU inked between the two sides. Meanwhile, Italy’s hospitality school Scuola Italiana di Ospitalità and Egypt’s Pickalbatros Hotels and Resorts Group signed an MoU to provide hospitality training programs.

How did Egypt’s non-banking financial services perform during 4Q 2023?

NBFS ends 2023 on a high note: The Financial Regulatory Authority (FRA) is out with its latest quarterly report (pdf), where it details the latest on how the country’s non-banking financial services (NBFS) performed. Sums taken out were up across the board — leasing, factoring, consumer finance, MSMEs, and mortgage financing were all up during 4Q 2023.

The breakdown:

#1- The value of leasing contracts jumped about 68% y-o-y to almost EGP 39 bn in 4Q. Meanwhile, the number of contracts signed during the quarter shrank by around 19% y-o-y to 575.

#2- Factoring receivables grew by 20.5% y-o-y in 4Q to almost EGP 12.5 bn.

#3- Consumer finance companies lent out some EGP 14.2 bn during the quarter — up just over 63% y-o-y — to 827k clients — up 8% y-o-y. Nearly 39% of the sums granted went towards vehicle purchases, while nearly 27% went towards purchases of appliances and electronics.

#4- Funding for MSMEs: Financing granted to MSMEs jumped almost 42% y-o-y during the quarter to EGP 57.1 bn, with micro enterprises making up the majority of the funding (c. EGP 50.6 bn). The funds were distributed among 3.8 mn enterprises, down 3.4% y-o-y.

#5- The value of mortgage loans taken out during the quarter was up nearly 89% y-o-y to almost EGP 3.7 bn, with the number of beneficiaries increasing 29% y-o-y to 1.43k.

IDH saw its revenues rise 14% in 2023

IDH’s revenues rise in 2023: Regional diagnostic services provider Integrated Diagnostics Holdings (IDH) saw its revenue rise 14% y-o-y in 2023 to EGP 4.1 bn, backed by higher test volumes, according to the company’s earnings release (pdf). Net income, however, dropped 11% to EGP 468 mn as the company incurred larger expenses — such as higher costs of raw materials and equipment and salary increases — on the back of high inflation levels and a weaker EGP.

On a quarterly basis: IDH’s revenue grew 33% y-o-y in 4Q 2023 to EGP 1.1 bn, while its net income fell 34% y-o-y to record EGP 81 mn.

Egypt drove growth: Egypt remained IDH's largest market, contributing almost 83% of total revenues. Conventional revenues in Egypt climbed 40% y-o-y on the back of an 18% y-o-y increase in test volumes. Jordan came in second accounting for 14.7% of the company’s revenues, followed by Nigeria, and Sudan.

IDH entered Saudi Arabia: The company has stepped into the Saudi market this year with two new branches in Riyadh.

What they said: “As a business operating in this part of the world, we are no strangers to macroeconomic volatility. 2023 was no different, as our markets of operation were confronted with devaluation, record-high inflation, tightening monetary policies, and fluctuating energy prices. Despite all this, our two largest markets, Egypt and Jordan, remained resilient supported by attractive fundamentals which are set to drive their long-term growth over the coming decade,” said CEO Hend El Sherbini.

The Administrative Capital for Urban Development’s assets have tripled in value post float

REAL ESTATE-

ACUD’s assets have tripled in valuation: The Administrative Capital for Urban Development (ACUD) has seen its assets jump from EGP 285 bn to EGP 900 bn following their revaluation post float, CEO Khaled Abbas said during an event attended by Enterprise.

Offers roll in for phase 2 of the new capital: Three industrial developers have so far submitted offers for 1 mn sqm plots each part of the second phase of the new administrative capital, Abbas added. ACUD plans to start construction of the second phase early next year at a cost of EGP 240 bn.

Where does the ACUD IPO stand? The company has completed its restructuring in preparation of going public on the EGX, Abbas said. The company is looking to raise at least EGP 150 bn when it offers 5-10% of its shares on the EGX in 2Q 2024, in what could be the country’s largest ever IPO.

ACUD has paid some EGP 17 bn in taxes to the government since it started operations 7 years ago, Abbas added.

DEBT-

IFC to support local MSMEs: The International Finance Corporation (IFC) will provide Banque du Caire (BdC) with a USD 100 mn package to increase support for Egypt’s micro, small and medium-sized enterprises (MSMEs) and women-owned firms, the IFC said in a disclosure. The package consists of a 5-year senior loan of up to USD 50 mn and up to USD 50 mn uncommitted trade finance facility with tenors up to 12 months, it said. The package is still pending signature.

Remember: BdC in February secured USD 50 mn from the European Bank for Reconstruction and Development to increase support for Egypt’s MSMEs, with a focus on women-led MSMes.

ENERGY-

Gov’t starts paying back Capricorn Energy: State-owned Egyptian General Petroleum Corporation (EGPC) has paid back some USD 30 mn in outstanding receivables to UK-based oil and gas firm Capricorn Energy last week, it said in its 2023 earnings announcement. EGPC’s outstanding receivables to Capricorn rose to USD 169 mn as of the end of 2023, USD 143 mn of which are overdue.

Preparing for the worst: Capricorn, along with Egyptian partner Cheiron, are “seeking waivers from lenders for several potential events of default under the facilities, all related to a lack of a payment plan from EGPC to resolve the receivables position.”

Remember: This comes just a few days after the government announced it started paying back nearly 20% of the arrears it owes to international oil companies operating in the country, with a structured plan to clear the remaining debt in stages over the coming period.

M&A-

NBE snaps up 24% of Hyde Park: The National Bank of Egypt (NBE) has acquired the Egyptian Arab Land Bank’s entire 24% stake in property developer Hyde Park Developments for an undisclosed sum, according to a statement (pdf).

FINTECH-

Al Ahly Momkn stake sale is pending CBE approval: Shareholders of e-payments company Al Ahly Momkn — a subsidiary of the National Bank of Egypt’s investment arm Al Ahly Capital Holding — are currently awaiting the greenlight from the Central Bank of Egypt to sell 25% of the firm’s shares to an unnamed local financial services player, Al Mal reports, citing sources it says are familiar with the transaction. Al Ahly Momkn is currently valued at over EGP 1 bn, the sources said.

Remember: A group of private equity firms, including Tana Africa, Lorax Capital Partners, and US-based Ultra Capital, have been bidding to acquire a 25% stake in Al Ahly Momkn, Al Mal reported in July.

MANUFACTURING-

Locally-made routers: The Information Technology Industry Development Agency (ITIDA) and Telecom Egypt will work with a number of private players to design and develop CPE-VDSL routers locally, as part of the government’s Egypt Makes Electronics initiative, according to a statement (pdf).

The players? ITIDA and Telecom Egypt will be working with El Sewedy Electrometer, ElAraby Group, local electro-medical and electronic equipment manufacturer BioBusiness, and ﬁber optic cabling solutions manufacturer HitekNOFAL OPTIX.

STARTUPS-

#1- Roboost wants to step foot in the Gulf: AI-powered logistics startup Roboost is looking to expand into the Saudi and Emirati markets during 2Q 2024, as it looks to expand its footstep across the region, co-founder and CEO Mohamed Gessraha reportedly told Al Mal. The Egypt-born startup announced in January that it had raised USD 3 mn in an investment round led by Jordan-based VC Silicon Badia and unveiled its plans to use the funds to to scale up its business “across the MENA region’s entire delivery market.”

#2- Nawy to get its mortgage finance license in 1H: Proptech startup Nawy is currently in talks with the Financial Regulatory Authority as it looks to get its mortgage finance license, co-founder Ahmed Rafea reportedly told Al Mal. Rafea expects the company to receive its license by the end of 1H 2024.

Blockbuster transactions double in 1Q as M&As rebound

The number of mega-acquisitions valued at USD 10 bn or above more than doubled worldwide in the 1Q 2024, with 11 transactions totaling USD 215 bn taking place over the first three months of 2024, compared to five transactions worth a total of some USD 100 bn during the same period last year, the Financial Times reports, citing data from the London Stock Exchange Group.

The growth was driven by large-scale transactions in the US in the energy, tech and financial sectors, reflecting companies’ appetite for “capitalizing on the market conditions to accelerate growth,” Citi’s head of investment banking Tyler Dickson told FT.

This growth indicates that the market is on course to recover from its “lengthy drought”, following a period of stagnancy in M&A activity on the back of the Covid-19 pandemic and the ensuing market volatility, which led to the market shrinking to a decade-low.

While large-scale transactions are seeing an uptick, the total number of transactions globally fell 31% over the first three months of 2024. However, the overall value grew to USD 690 bn, marking a 30% y-o-y increase.

What spurred the rebound? M&A activity surged as investors anticipate rate cuts from central banks, expected to come in June. The expected rate cuts have reduced financing costs, facilitating takeovers, in tandem with a resurgence in IPO activity.

By region: The US made up the lion’s share of takeover activity, growing 59% y-o-y to USD 431.8 bn. The European market also jumped more than 60% y-o-y to USD 127 bn. Meanwhile, transactions in the Asia-Pacific region fell 28% y-o-y, amounting to USD 90 bn.

The market is expected to expand further: Bankers and M&A firms foresee that the M&A momentum will continue to grow throughout the year as companies pursue more takeovers, as fears of recession diminish and economic indicators suggest that the global economy is headed to a “soft landing” and that inflation is under control. “Boards and management teams feel more comfortable about the future,” Reuters quotes co-head of global M&A at Bank of America Ivan Farman as saying.

EGX30	27,559	-2.4% (YTD: +10.7%)
USD (CBE)	Buy 47.33	Sell 47.47
USD (CIB)	Buy 47.35	Sell 47.45
Interest rates CBE	27.25% deposit	28.25% lending
Tadawul	12,566	-0.3% (YTD: +5.0%)
ADX	9,228	-0.4% (YTD: -3.7%)
DFM	4,246	+0.3% (YTD: +4.6%)
S&P 500	5,254	+0.1% (YTD: +10.2%)
FTSE 100	7,953	+0.3% (YTD: +2.8%)
Euro Stoxx 50	5,083	0.0% (YTD: +12.4%)
Brent crude	USD 87.00	+1.9%
Natural gas (Nymex)	USD 1.76	+2.6%
Gold	USD 2,238.40	+1.2%
BTC	USD 69,659	+0.33% (YTD: +64.9%)

THE CLOSING BELL-

The EGX30 fell 2.4% at Thursday’s close on turnover of EGP 2.7 bn (45.7% below the 90-dayaverage). Regional investors were net sellers. The index is up 10.7% YTD.

In the green: Palm Hill Developments (+2.4%), GB Corp (+1.0%), and Orascom Construction (+0.4%).

In the red: Orascom Development Egypt (-6.5%), Fawry (-6.5%), and Delta Sugar (-6.3%).

CALENDAR

2024

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).

2-5 May (Thursday-Sunday): Townhall Expo in Riyadh.

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: Egypt to receive USD 20 bn of Ras El Hekma funds.

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.

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