Infinity, Masdar, EETC ink agreement for USD 217 mn Ras Ghareb wind farm

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What We're Tracking Today

Egypt unveils green hydrogen strategy to target up to 8% of the global market by 2040

Good morning, folks. More of the country’s largest companies were out with earnings releases over the weekend and important green energy updates emerged from both the public and private sector. We’ve got this and more in today’s short, but nonetheless important, issue for you today.

WATCH THIS SPACE-

Our green hydrogen strategy is here: The government last week announced the National Low-Carbon Hydrogen Strategy, which aims to transform Egypt into a global hub that targets 5-8% of the global green hydrogen market by 2040, according to a cabinet statement.

The end goal: If implemented, the strategy could add between USD 10-18 bn to Egypt’s GDP by 2040, create over 100k jobs, and enhance our energy security by reducing reliance on gas imports. The strategy also aims to transform Egypt into a leading international export hub for hydrogen and its derivatives.

Want the full story? Check out the strategy here (pdf) or wait for our coverage in this week’s Going Green on Tuesday.

PSA-

WEATHER- Warm weather continues in Cairo today, with a high of 36°C and a low of 26°C, according to our favorite weather app.

It’s a bit cooler in Alexandria and along the North Coast, with a high of 33°C and a low of 24°C.

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

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CIRCLE YOUR CALENDAR-

#1- The EFG Hermes London Conference is back: EFG Hermes will hold its annual conference in London on 9-12 September, giving investors “unique and unparalleled access to leading equities in MENA and key frontier emerging markets.”

#2- BEBA mission to the UK to take place next month: The British Egyptian Business Association (BEBA) will be in the UK for a three-day business mission from 18-20 September to discuss promising investments, “rising industries and the overall business climate in Egypt.” The mission is set to include Finance Minister Ahmed Kouchouk, Investment and Foreign Trade Minister Hassan El Khatib, CBE Deputy Governor Ramy Aboulnaga, FRA chairman Mohamed Farid, SCZone head Walid Gamal El Din, and Administrative Capital for Urban Development chairman Khaled Abbas.

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

THE BIG STORY ABROAD-

It’s a relatively quiet morning in the international press, although there are a couple of stories broadly getting ink:

#1- Post-mortem on Ukraine’s latest victory in Russia: The Wall Street Journal and Reuters are among those running analysis pieces this morning to dissect how Ukraine managed to pull off its invasion of Russia’s Kursk region last week, which signaled a significant victory for Kyiv. The assault — “the biggest invasion of Russia since World War Two” — came in large part to intelligence failures in Russia, in addition to Ukraine’s use of electronic warfare.

#2- Israel killed two senior Hamas members in an airstrike on the West Bank yesterday, one day after a separate strike in Lebanon killed 10 people and injured five others, all of whom were Syrian nationals. The attack in Lebanon targeted a weapons depot used by Hezbollah, Israel claimed. The two Hamas members were reportedly responsible for killing an Israeli man in a shooting attack in the West Bank, Israel said. (Reuters | Financial Times)

Hamas objected to new conditions added to a ceasefire proposal originally laid out by US President Biden during last week’s round of talks mediated by Egypt, Qatar, and the US in Doha, according to a source speaking to AFP. The added proposals include allowing Israel to keep its troops stationed at Gaza’s border with Egypt, alongside new terms for swapping hostages for prisoners. Hamas, which did not attend the talks, was briefed on them as they unfolded.

Hamas’ refusal comes as US President Joe Biden has said that an agreement is closerthan ever after the talks were put on pause Friday, to be resumed this week. Biden reportedly wants the ceasefire to go through as soon as possible in order to avoid a wider regional war should Iran stay true to its pledge to issue a retaliatory strike against Israel. “With the comprehensive cease-fire and hostage release deal now in sight, no one in the region should take actions to undermine this process,” Biden said.

But mediators are pressing ahead with efforts to hammer out an agreement, with senior government officials from Egypt, Qatar, and the US set to reconvene in Cairo before the end of the week in a bid to finalize an agreement based on the proposal presented in Doha, according to a joint statement by the three countries. Technical teams will continue to work in the coming days on the implementation details, according to the statement, which describes the latest round of talks as “constructive” and the proposal as “consistent with the Security Council’s resolution ” for a three-phase ceasefire. President Abdel Fattah El Sisi and Joe Biden agreed to “intensify joint efforts” during a phone call over the weekend.

AD Ports subsidiary acquires Egyptian maritime services provider Safina

AD Ports subsidiary acquires majority stake in Safina: AD Ports’ Noatum has acquired a majority stake in maritime, logistics, and cargo services provider Safina Shipping Services, the company said in a statement (pdf). The agreement to acquire the stake in the “key player in the Egyptian maritime industry” will close in 3Q 2024.

The details: While no information was provided about the size of the stake or value of the acquisition, the agreement will see Safina — a leading logistics provider for metal, mineral, and fertilizer shippers — absorbed into Noatum’s portfolio and rebranded as Noatum Maritime Egypt. The company’s founders will also retain a minority stake in the company.

It’s all in the family: AD Ports is no stranger to Safina, having purchased a 70% stake in Safina’s parent company IACC Holdings in 2022.

Noatum is fairly new to the AD Ports family: Abu Dhabi-based AD Ports fully acquired the Spanish logistics company back in July 2023 in a EUR 660 mn transaction as part of a wider expansion plan. Noatum is present in US, Chinese, and Southeast Asian markets. The subsidiary has since launched offices in Turkey as part of its ongoing expansion across the MENA region.

Noatum will expand Safina’s customer base: AD Ports plans to leverage Noatum’s extensive international network to help Safina “access new customers from more diverse industries and strengthen its local presence,” the statement said.

AD Ports is doubling down on the Egyptian market: The acquisition of Safina comes shortly after AD Ports inked an agreement in June to develop, operate, and manage three cruise terminals in Hurghada, Safaga, and Sharm El Sheikh, with USD 4.7 mn in investments over 15 years.

Egypt’s unemployment falls for third consecutive quarter to 6.5%

Unemployment was down 0.5 percentage points y-o-y in the second quarter of the year: Egypt’s unemployment rate fell to 6.5% of the total workforce in the second quarter of this year, falling 0.2 percentage points from the previous quarter, according to data released by state statistics agency Capmas. Unemployment was down 0.5 percentage points from the same period last year after having fallen for the last three quarters.

Unemployment among women crept up: The jobless rate among women rose by 0.8 percentage points to 17.3%, remaining unchanged from the same period last year. For men, unemployment fell to 4.2% during the quarter, down from 4.4% in the previous quarter and down 0.6 percentage points y-o-y.

And slightly fewer young people are out of work: The rate of unemployment among 15-29 year-olds accounted for 64.2% of all jobless people in 2Q 2024, marginally down from 64.5% in the previous quarter. Capmas doesn’t provide an official rate of youth unemployment.

REMEMBER- The headline rate doesn’t tell the whole story: The unemployment rate doesn’t count people of working age who are not looking for work or who are unable to work. The labor force participation rate — which counts everyone aged 15-64 either in work or actively looking for work — came in at 43.4%, down from 43.5% during the previous quarter and up from 43.0% in 2Q 2023.

Ahead of schedule: The cabinet had plans to reduce the unemployment rate to 6.5% by the fiscal year 2026-2027 and to 6.1% by 2030.

DATA POINT: Egypt’s labor force stood at around 31.4 mn during 2Q 2024, up 0.1% from 1Q 2024. Men made up 82.1% of the workforce while women made up the remaining 17.9%.

Masdar, Infinity, and EETC finalize agreement for Ras Ghareb wind farm

Another wind farm in Ras Ghareb is officially underway: Our friends at renewables firm Infinity Power, Emirati state-run renewables giant Masdar, and the Egyptian Electricity Transmission Company (EETC) have made plans to build a 200 MW wind farm in Ras Ghareb official after inking a trilateral purchase power agreement yesterday, according to a joint statement (pdf) from Masdar and Infinity Power. The announcement confirms an Enterprise story earlier this month that Masdar was close to inking an agreement for the project.

The details: The alliance will develop, finance, and operate the project, which is expected to come online in October 2026, according to a cabinet statement. EEHC will purchase the power produced. The project will cost some USD 216.7 mn, according to a project update by the European Bank for Reconstruction and Development, which is partially funding the project.

Infinity and Masdar have more in the pipeline: Masdar, Infinity Power, and Hassan Allam Utilities are also building a USD 10 bn , 10 GW wind farm project in Sohag that is set to be one of the largest wind farms globally and the largest in Africa. The trio, along with global energy giant BP, will also set up a USD 15 bn green hydrogen project in the SCZone.

Vodafone powers a digital healthcare revolution with cutting-edge solutions

Global research giant KLAS has spotlighted Vodafone Egypt in their groundbreaking Emerging Insights Case Study, praising their role in revolutionizing Egypt's healthcare landscape. The report, featuring insights from leaders at Ain Shams University, highlights Vodafone’s game-changing impact on 14 university hospitals serving around 10 mn patients annually. This prestigious accolade highlights Vodafone’s commitment to transforming healthcare delivery across the nation.

In a country where several people still grapple with outdated paper records, Vodafone Business is spearheading digital transformation by streamlining the transition to electronic health records (EHR) with expert training and strategic vendor coordination. Their Healthcare Academy stands at the heart of this healthcare revolution, offering tailored training and workshops that seamlessly bridge technology and medicine, equipping healthcare professionals with essential digital skills, elevating patient care, and transforming medical practices.

So, how is Vodafone lighting up the path to digital healthcare? By rolling out cutting-edge systems, forging powerful partnerships, and providing top-tier consulting services. Leading Egypt’s most ambitious digital projects, including Universal Health Insurance and the Egyptian University Hospitals programs. Through these endeavors Vodafone ensures that over 15 mn citizens receive seamless, efficient, and transformative healthcare each year.

Vodafone is not just modernizing healthcare; they are paving the way for equal access to quality medical care for every single Egyptian, ensuring that high-quality healthcare reaches every corner of the country.

Learn more here.

CI Capital, E-finance, GB Corp, Elsewedy Electric report earnings

The earnings just keep coming: A bunch of companies released their quarterly earnings over the weekend — CI Capital, E-finance, GB Corp, and Elsewedy Electric.

CI CAPITAL SEES NET INCOME MORE THAN DOUBLE-

CI Capital’s net income after minority interest and taxes rose 146% y-o-y in the first half of 2024 to some EGP 1.3 bn, driven by solid top-line growth across all business segments, the company said in a press release (pdf).

The company’s revenues climbed 61% y-o-y to EGP 5 bn in 1H 2024. Revenues from its corporate leasing arm Corplease were up 48% y-o-y to EGP 2.6 bn, while its mortgage finance wing posted a 155% y-o-y jump in revenues to EGP 224 mn. The group’s investment bank posted a 94% y-o-y increase in revenues to EGP 891 mn.

The group’s total financing portfolio reached EGP 20.5 bn in 1H 2024 — Corplease saw its portfolio grow to EGP 14.9 bn, while its microfinance arm Reefy’s loan portfolio stood at EGP 3.4 bn.

E-FINANCE’S NET INCOME FALLS-

E-finance sees income fall, revenues rise: State-owned fintech player E-finance saw its net income after non-controlling interest drop 31.2% y-o-y to EGP 300.2 mn in 2Q 2024, on the back of higher costs due to the float of the EGP in March and a decline in higher-margin business, the company said in its latest earning release (pdf). Revenues inched up 17.2% y-o-y to EGP 1.1 bn during the three-month period.

Helping drive revenue growth: Growth was driven primarily by the company’s flagship business, E-finance Digital Operations, which generated EGP 1.0 bn in revenues during the quarter, up 22.1% y-o-y. The company’s eKhales and eAswaaq also helped drive growth, with their revenues increasing 45.5% and 74.9% y-o-y, respectively.

But overall, it was a good first half: E-finance saw its top line grow 31.6% y-o-y to EGP 2.3 bn during the first half of the year, driven by growth across most of the group’s subsidiaries. Net income after non-controlling interest inched up 6.2% y-o-y to EGP 762.7 mn.

GB CORP SEES INCOME DIP IN 2Q-

GB Corp’s net income after tax and minority interest fell 15.7% y-o-y during 2Q 2024 to EGP 421.8 mn “on the back of high inflationary pressures driven by the floatation of the EGP,” according to its latest earnings release (pdf). Despite the drop in net income, revenues saw a 69.3% y-o-y increase during the quarter to record EGP 10.2 bn.

The details: GB Corp’s automotive assembly and distribution unit GB Auto saw its revenues rise 74.8% y-o-y to EGP 8.8 bn during the quarter “on the back of improved pricing strategies and an enhanced product mix, which helped mitigate challenging market conditions,” according to the release. The group’s NBFS arm GB Capital saw its revenues rise 21.7% y-o-y to EGP 1.4 bn “driven by an expansion in GB Capital's portfolio of alternative financing solutions.”

On a semiannual basis, the company saw its net income after tax and minority rise 72.3% y-o-y to EGP 1.0 bn during the first half of the year, while its revenues rose 78.4% y-o-y during the six-month period to EGP 19.2 bn.

ELSEWEDY HAD A ROBUST QUARTER-

Elsewedy Electric saw its net income after minority interest rise 67.5% y-o-y in 2Q 2024 to just under EGP 4.5 bn “driven by a significant increase in top-line revenues and the stockpiling of metals at lower exchange rates,” according to the company’s latest earnings release (pdf). Revenues rose 58.1% y-o-y to EGP 57.4 bn during the quarter.

Driving the growth: The company’s wires and cables segment was once again its main driver of revenues, growing 72.9% y-o-y to EGP 34.5 bn during the quarter, which it attributes to “positive currency translation effects coupled with increased volume sold.” Its turnkey segment was the second biggest revenue contributor, growing 45.4% y-o-y to just under EGP 17.2 bn in 2Q 2024.

On a 1H basis: During the first half of the year, Elsewedy Electric’s net income after minority interest rose by 51.6% y-o-y to EGP 8.4 bn, while its revenues rose by 47.4% y-o-y to EGP 102.6 bn.

Going forward: “Looking ahead, we will continue to focus on enhancing operational efficiency, maintaining a robust balance sheet, and capturing opportunities across our region. With a strong commitment to innovation and effective cost management, I am confident in our ability to not only achieve our growth goals but also reach other key milestones, continuing to break new ground in the integrated, infrastructure solutions landscape,” CEO Ahmed El Sewedy said.

Sovereign Fund of Egypt CEO Ayman Soliman resigns

The Sovereign Fund of Egypt will soon be under new management: The Sovereign Fund of Egypt (SFE) CEO Ayman Soliman has resigned from his post, according to media reports, citing anonymous sources they say are familiar with the matter (here, here, and here). Soliman reportedly submitted his resignation ahead of the cabinet shuffle that took place in July and a draft law that was sent to the House to propose putting the fund under the purview of the prime minister’s office, one source told Asharq Business.

Soliman was appointed to head the fund in 2019 for a three-year term, which was then extended. “With the reshuffle, Egypt wanted to present a fresh image, and that meant Soliman had to step down," one unnamed source told Reuters.

The Thanaweya Amma overhaul makes the rounds once more

Last night’s talk shows continued to hone in on the new Thanaweya Amma system that Education Minister Mohamed Abdellatif announced last week.

A survey of public opinion: While most people are in favor of the changes, some have reservations and others — though not many — are completely opposed to them, Ala Mas’ouleety’s Ahmed Moussa claimed, citing families and students surveyed by the show (watch, runtime: 4:39). Families believe the reforms will lighten the academic load, lower costs, and take pressure off third-year students, who will now only be graded on five subjects after having had to endure the “monster” that was senior year, he elaborated. Moussa gave a detailed explanation of the overhaul, which will come into effect at the start of the upcoming academic year on 21 September (watch, runtime: 20:36 | 26:56). El Sa’a El Sadesa’s Azza Mostafa also had coverage (watch, runtime: 19:29).

** We have a rundown of the changes here.

ALSO ON THE AIRWAVES- El Sisi’s meeting with Stéphane Séjourné: French Minister for Europe and Foreign Affairs Stéphane Séjourné met with President Abdel Fattah El Sisi in Cairo yesterday on the last stop of his regional tour to discuss efforts to de-escalate regional hostilities. El Sisi emphasized the importance of concerted efforts toward brokering an agreement between Israel and Hamas that would “prevent further bloodshed and spare the region from the consequences of further escalation,” according to an Ittihadeya statement. The discussion got airtime on Salet El Tahrir (watch, runtime: 7:06).

Government reportedly gearing up for October international gas exploration tender. PLUS: Fawry to launch Saudi operations in 2024, Ceramica Venezia resumes operations, Le Pacha 1901 to offload controlling stake

ENERGY-

Egypt prepares new gas exploration tender: The government is gearing up to launch a new international tender for natural gas exploration in at least ten areas in the Mediterranean and waters in the Delta, Asharq Business reports, citing an anonymous government official. Oil Minister Karim Badawi has agreed with foreign partners operating in Egypt to accelerate development plans for concession sites, aiming to add new wells to the production network over the coming months, according to the source.

The timeline: The official said the tender’s announcement could coincide with the Mediterranean Offshore Conference and Exhibition scheduled for October in Alexandria.

ICYMI: The Oil Ministry formed an advisory committee to manage oil and gas reserves and boost production last week.

FINTECH-

Fawry gears up for Saudi expansion in the next four months: Local e-payment services giant Fawry is planning to set up shop in Saudi Arabia by the end of 2024, the company’s CEO and founder Ashraf Sabry told Asharq Business (watch, runtime: 8:19). The company is in the process of finalizing some contracts with companies in the kingdom ahead of its launch in the country, Sabry added. Sabry’s comments followed the release of the company's earnings for 1H 2024.

M&A-

Le Pacha to offload a controlling stake? Dining and entertainment venue Le Pacha 1901 is offering a controlling stake to local and foreign investors, Hapi Journal reports, citing unnamed sources. The company has reportedly tapped Stanhope, an affiliate of New York-based Concord International Investments Group, as the financial advisor on the transaction. The sale is open to either a single investor or group of investors, with no cap on how much each investor within a group can purchase.

LABOR-

Ceramica Venezia resumes operations: Ceramic manufacturer Ceramica Venezia yesterday resumed operations after management struck an agreement with worker representatives to study worker demands and restructure wages by the end of the year, according to a statement from the Labor Ministry. The company, which has some 1.3k workers, has pledged to uphold the minimum wage in the new structure. This comes just a few days following the factory’s closure.

Global stocks record their best week since 2023 as US data calm recession fears

After their worst day in years, global stocks record their best week in nine months: Global stocks saw their best week since November of last year after better-than-expected inflation figures from the US helped calm recession fears triggered by “alarming” US economic data, the Financial Times reports. This comes as markets rebound from a “brutal” sell-off during the first week of August that saw some indexes hit multi-year lows and wiped USD tns from global stock markets.

There was relief on Wall Street, with the benchmark S&P 500 ending a four-week losing streak to close the week up 3.9%. The gains echoed across the board, with the Nasdaq gaining 5.2% and the Dow Jones rising by 2.9% during the week.

The rebound wasn’t just felt in the states, with Japanese stocks in particular also having a good week after facing a dramatic sell-off only a few days before. The country’s Nikkei index rose 7.9% over the week after having fallen 12.4% during the global sell-off — its worst crash since 1987. European stocks also had a good week, with the Stoxx Europe 600 index finishing up 2.4% by the end of trading on Friday.

Analysts seem pretty confident on what lay behind the rebound, with the FT explaining that the rally was “aided by data that suggested the US economy was holding up better than had been feared.” On Wednesday, the Bureau of Labor Statistics data showed US inflation falling under the 3% mark for the first time since March 2021 and a day later there were reports of strong retail sales in the US and lower-than-forecasted jobless claims.

Market volatility is the name of the game, with single data points able to swing the entire narrative about global markets, Blackrock’s global chief investment strategist Wei Li is quoted as saying by the salmon-colored paper.

EGX30	29,629	+0.2% (YTD: +19.0%)
USD (CBE)	Buy 48.84	Sell 48.97
USD (CIB)	Buy 48.85	Sell 48.95
Interest rates (CBE)	27.25% deposit	28.25% lending
Tadawul	11,915	+0.6% (YTD: -0.4%)
ADX	9,286	+0.5% (YTD: -3.1%)
DFM	4,243	+0.6% (YTD: +4.5%)
S&P 500	5,554	+0.2% (YTD: +16.5%)
FTSE 100	8,311	-0.4% (YTD: +7.5%)
Euro Stoxx 50	4,841	+0.7% (YTD: +7.1%)
Brent crude	USD 79.68	-1.7%
Natural gas (Nymex)	USD 2.12	-3.4%
Gold	USD 2,538	+1.8%
BTC	USD 59,431.60	+0.3% (YTD: +40.5%)

THE CLOSING BELL-

The EGX30 rose 0.2% at Thursday’s close on turnover of EGP 4.4 bn (23.4% above the 90-day average). Local investors were net buyers. The index is up 19.0% YTD.

In the green: Palm Hills Development (+5.7%), Credit Agricole (+5.1%), and Fawry (+4.8%).

In the red: E-finance (-6.3%), Orascom Construction (-4.3%), and Edita (-4.2%).

CORPORATE ACTIONS-

Misr Fertilizer Production Company (Mopco) will pay out a dividend of EGP 3.75 per share, following the decision of the company’s board of directors, according to an Oil Ministry statement.

CALENDAR

2024

AUGUST

August 2024: Shalateen to announce gold exploration tender winner.

SEPTEMBER

3-5 September (Tuesday-Thursday): Egypt International Airshow, El Alamein International Airport.

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

9-12 September (Monday-Thursday): The annual EFG Hermes London Conference.

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

24 September (Tuesday): Enterprise Finance Forum, Cairo, Egypt

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

25-28 September (Wednesday-Saturday): Cityscape Egypt, Egypt International Exhibition Center, Cairo.

30 September (Monday): Ban on sugar exports expiration.

OCTOBER

1-3 October (Tuesday-Thursday): Cairo Sustainable Energy Week, Cairo, Egypt.

6 October (Sunday): Armed Forces Day.

10-12 October (Thursday-Saturday): Egy Health Expo, Egypt International Exhibition Center, Cairo.

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

13-17 October (Sunday-Thursday): Cairo Water Week, Water and Climate: Building Resilient Communities, Cairo, Egypt.

20-22 October (Sunday-Tuesday): Mediterranean Offshore Conference (MOC), Alexandria, Egypt.

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

NOVEMBER

4-8 November (Monday-Friday): World Urban Forum, Cairo, Egypt.

12-15 November (Tuesday-Friday): Arab African Investment and International Cooperation Summit, Aswan, Egypt.

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

26-28 November (Tuesday-Thursday): Egypt Energy Show, Cairo, Egypt.

DECEMBER

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

EVENTS WITH NO SET DATE

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

3Q 2024: Egyptian-Armenian Joint Committee.

September 2024: Turkish-Egyptian Business Council meeting in Turkey.

September 2024: US-Egypt Strategic Dialogue, Cairo.

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

July 2025: The first operational trail of Egypt-KSA electricity interconnection line.

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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