Are we asking for a USD 2 bn top-up to our IMF facility?

1

WHAT WE’RE TRACKING TODAY

US Secretary of State Antony Blinken set to arrive in Cairo to discuss Gaza war

Good morning, wonderful people. The news cycle didn’t slow down in the slightest over the weekend as the war between Israel and Hamas accelerated and the IMF and World Bank meetings continued in Marrakech.

US Secretary of State Antony Blinken will touch down in Cairo today in what will be his latest stop in a breakneck tour of regional capitals aimed at softening the Arab response to Israel’s assault on Gaza — which has forced some 1 mn people from their homes and killed more than 2.2k — and prevent the conflict from escalating into a regional conflagration. Expect intense discussions on Israel’s displacement of thousands of Gazans, the entrance of humanitarian aid into the enclave, and the fate of US citizens trapped at the Rafah border crossing.

MPs to speak on Palestinian displacement: A large number of MPs are expected to take to the floor in the House of Representatives today with statements condemning Israeli aggression in the Gaza Strip and rejecting the displacement of Palestinians into Sinai.

We have the rundown on the latest from the war in this morning’s war watch, below.

THE BIG BUSINESS STORY HERE AT HOME- We’ll know by the end of October when the IMF will review our progress on the terms of our USD 3 bn loan program, Finance Minister Mohamed Maait told Al Arabiya. Bloomberg reported Friday that an IMF mission could arrive in Cairo to start the first and second reviews this month. The minister’s comments to the Saudi broadcaster followed an interview with CNBC Arabia during which he said that the reviews will be completed before the end of the year.

We may be asking the Fund for as much as USD 2 bn more under the program, an unconfirmed report suggests. The news comes the same weekend the fund released a report predicting that our budget deficit is going to rise to 10.7% of GDP this fiscal year, more than double the year before. We’ve got the rundown on these stories and more in this morning’s news well, below.

PRIVATIZATION WATCH- Shell and China’s North Petroleum both want a piece of Wataniya: Shell Oil has teamed up with an unnamed investor owned by the Saudi government to target a stake in the military-owned filling station operator Wataniya, reports Al Borsa, citing sources it says are in the know. China’s North Petroleum also submitted an offer, the local outlet added. The Sovereign Fund of Egypt is working to sell at least 10% — and potentially as much as 100% — of Wataniya as part of the state’s privatization program. The company is currently 100% owned by the military’s National Service Projects Organization.

That makes six reportedly in the running: Taqa Arabia, Abu Dhabi National Oil Company (Adnoc), Emirates National Oil Company (ENOC), and Saudi firm Petromin have all reportedly submitted offers for the Wataniya stake, with local media reporting that bids ranged between USD 250 mn and USD 280 mn. The Madbouly government has said that it aims to conclude the sale before the year is out.

ELECTION WATCH- It looks like the presidential election is going to be a four-person race afterRepublican People’s Party leader Hazem Omar submitted his running papers, according to a statement by the party. Omar joins President Abdel Fattah El Sisi, Farid Zahran (Social Democratic Party), and Abdel-Sanad Yamama (Al Wafd) in the race after the window for nominations closed on Saturday. Opposition politician Ahmed El Tantawy has dropped out of the race.

What’s next: The National Elections Authority will announce the official list of candidates tomorrow after reviewing each candidate’s paperwork. Voting takes place 10-12 December in Egypt, and 1-3 December abroad.

EGP WATCH- Standard Chartered sees no devaluation, changes to interest rates before the end of this year: The bank thinks that Egypt will not see further devaluations of the EGP or changes in interest rates until the end of the year, reports Asharq Business, citing a research note from the bank. “The way markets have understood moving forward the presidential elections from 1Q 2024 to December is that the reforms initially earmarked for 2023 will wait until after the election,” Standard Chartered Bank economist Carla Slim told Asharq Business last week (watch, runtime: 8:25).

COMMODITIES WATCH- Wheat price hedges incoming for 2024? “There is a good possibility that we do the wheat hedging next year,” Finance Minister Mohamed Maait told Bloomberg on the sidelines of the IMF and World Bank’s annual meetings in Morocco. Maait told the outlet that the Madbouly government is already in talks with several unnamed banks about the plan.

It’s not the first time we’ve heard about potential wheat hedges: As one of the world’s largest importers of wheat, this isn’t the first time we’ve explored hedging against volatile wheat prices. However, while wheat hedging plans are yet to see the light of day, we’ve been hedging big on another important import this year — oil.

IN THE HOUSE-

The House is back in session for the 2023-2024 legislative season: Four bills are up for debate and vote today and tomorrow during plenary sessions in the House, including:

wage and pension hikes
changes to income tax exemptions
a new round of the expat car import for FX scheme
a bill that would allow foreign companies to become importers for the first time.

If that wasn’t enough, a further eight foreign agreements are also on the agenda, including:

Raising Egypt’s contribution to the paid-up capital of the African Development Bank;
A pact with Japan on the first phase of the fourth line of Cairo’s Metro as well as an agreement with South Korea to manufacture and supply 320 train coaches for the Cairo Metro;
Approving a EUR 670k Spanish grant earmarked to modernize water systems in the agricultural sector;
A credit facility that will see TMH International supply 1.3k train coaches to the Egyptian National Railway;
Banning double taxation on profits generated from air transport between Egypt and Brazil;
And agreements on the disposal of dangerous waste and on traffic signals.

** Head down to this morning’s news well for a full rundown on the bills that matter most to business as we settle in for the 2023-2024 legislative season.

CIRCLE YOUR CALENDAR-

Lynx forum on EVs kicks off today:The forum, backed by USAID, international development NGO DAI, and Uber, will see industry leaders, government officials and international experts meet to discuss the rollout of electric vehicles in Egypt. After the discussions, a proposed roadmap to accelerate the local adoption of EVs will be submitted to the Supreme Automotive Industrial Council, according to a joint press release (pdf).

Not enough IMF news in this morning’s issue for you? There are still a few hours left for more: The Fund and the World Bank will wrap up their annual meetings today in Morocco in just a few hours.

Oceanman is coming back to Somabay Red Sea for the third year in a row on 20-21 October 2023. More than 500 swimmers from 34 different countries worldwide. Uniting both professional and amateur open water swimmers from all over the world. Different races for athletes of all levels: 10 km, 5 km, 1.5 km and 3 x 500 m relay. Tap or click the image above for the experience of a lifetime.

Egypt wants to increase its IMF loan to more than USD 5 bn, Bloomberg says. PLUS: USD 1.5 bn of fresh borrowing this quarter, says Maait

What’s an extra USD 2 bn between friends?The Madbouly government is in talks with the IMF to raise its USD 3 bn loan program to more than USD 5 bn, Bloomberg reports, citing unnamed sources. The Fund will need to sign off on the first two reviews of the program before any announcement is made topping up the loan, the people said.

Remember: The IMF postponed reviews scheduled for March and September after authorities failed to meet several conditions of the facility, including a commitment to implement a fully flexible exchange rate.

We could know more before the end of the month: The IMF will announce by the end of October when it will conduct its reviews, Finance Minister Mohamed Maait told Al Arabiya in an interview on Saturday. IMF Managing Director Kristalina Georgieva said earlier in the week that the Fund is in “close engagement” with the government about setting the dates but didn’t offer further details. Maait said last week that the reviews will be completed before the end of the year. Passing the reviews would see the Fund disburse USD 700 mn under the loan program, along with USD 1.3 bn under its Resilience and Sustainability Facility.

Extra money comes = extra conditions. Look for the IMF to request that the government undertake more far-reaching structural reforms in return for bumping up the size of the assistance program. Bloomberg did not have further details about the nature of the conversations, though its sources said that no agreement has been made.

An upscaled program has been floated recently by some analysts, including Hany Geneina who told us earlier this month that the Fund could increase the loan in return for a commitment to undertaking reforms early in 2024 including the currency float and a lifting of energy subsidies.

“Egypt has made good progress on a number of fronts,”Bloomberg quotes Georgieva as saying on Thursday. Cabinet has made headway on asset sales, fiscal policy, and monetary policy reform, she said at the IMF and World Bank annual meetings in Morocco. Georgieva said going into the meetings that we would continue to “bleed” reserves if the currency is not devalued.

USD 1.5 BN IN FRESH BORROWING THIS QUARTER-

Panda + Samurai bond issuances this quarter? The government expects to borrow at least USD 1.5 bn between now and the end of the year, Maait told Bloomberg. This includes the planned USD 500 mn issuances of CNY-denominated bonds in October and JPY-denominated bonds in November. The African Development Bank (AfDB) and the Asian Infrastructure Investment Bank (AIIB) have guaranteed up to USD 545 mn of the panda bonds, the minister added. The AfDB is covering USD 345 mn and the AIIB USD 200 mn.

A syndicated bank loan: The government hopes to reach an agreement this month with a syndicate of banks for a USD 500 mn loan, Maait told the news outlet. He didn’t disclose which lenders it is in talks with but said that Kuwaiti ins. company Dhaman could guarantee the loan.

Egypt’s budget deficit to widen to 10.7% this fiscal year -IMF

The IMF expects our budget deficit to widen significantly during FY 2023-24, according to figures in its biannual fiscal monitor (pdf) published last week. The Fund is forecasting the deficit to increase to 10.7% of GDP this year from an estimated 4.6% the previous year. This would be the largest budget deficit as a percentage of GDP since the 2015-16 fiscal year.

The IMF had projected a 9.2% deficit this fiscal year in its previous forecast (pdf) in April.

Higher for longer:The deficit is expected to remain elevated in the coming years, widening to 11.1% next year before narrowing to 10.1% in FY 2025-26 and 7.8% by FY 2027-28.

A smaller primary surplus: The IMF is now projecting the primary surplus to narrow to 1.5% of GDP in FY 2023-24 from an estimated 2.3% last year. In April it had expected the surplus to grow to 2.2% this year from 1.6% in FY 2022-23.

Spending is rising rapidly. Revenues are not. The IMF now expects government spending to rise to 28.9% of GDP in FY 2023-24, up from an estimated 22.8% last year. At the same time, government revenues will remain flat as a percentage of GDP, with the Fund forecasting them to come in at 18.1% for the second year in a row.

The wrong direction: The IMF’s previous projections had revenues rising to 19.8% of GDP this year from 18.7% last year. The latest spending forecast is essentially unchanged from April’s 29.0% forecast.

Debt-GDP to fall, but by less than previously thought: The IMF is now forecasting Egypt’s gross debt to fall to 88.1% of GDP this year from an estimated 92.7% in FY 2022-2023. In April, the Fund had expected debt to fall to 87.0% from 92.9% the previous year.

Remember: The IMF last week downgraded its FY 2023-24 growth outlook for Egypt for the second time this year. It now expects the economy to grow at a 3.6% clip this year, down from an estimated 4.2% in FY 2022-23.

Egypt condemns Israel’s forced displacement of Palestinians, demands Israel and the US allow aid to enter Gaza

Egypt condemns Gaza displacement, demands aid entry to prevent humanitarian catastrophe: Israel’s order that some 1 mn Palestinians in Gaza leave their homes is a “grave violation” of international law, Egypt’s Foreign Ministry said Friday after the Israeli military told residents of Gaza City to move south. The ministry urged the UN Security Council to intervene to prevent Israel from escalating its attacks and driving people from their homes, which the UN said would trigger a humanitarian catastrophe.

The situation on the ground is dire:According to the UN’s Palestine refugee agency, almost half of Gaza’s population has now been displaced, a process which accelerated over the weekend as civilians fled south in fear of further bombardment by the Israeli military. The territory is now facing a “severe shortage” of water, the UN said, as Israel’s total siege prevents clean water, food, fuel and humanitarian aid from entering. Palestinian Prime Minister Mohamed Shtayyeh on Thursday said that Israel’s actions amount to genocide.

Everyone is bracing for an invasion: Israel said troops are getting ready for “a significant ground operation … [including] an integrated and coordinated attack from the air, sea and land,” the New York Times reports Israel’s military as having said. Israel has yet to announce when it plans to invade.

Egypt rejects calls to resettle Palestinians in Egypt: In a speech Thursday, President Abdel Fattah El Sisi rejected calls by Israel and Western nations to allow Gazans into Egypt, saying that Palestinians should remain on their land and warning that leaving the strip could “liquidate” their cause (watch, runtime: 19:53). State news agency MENA last week quoted an unnamed security source accusing Israel of carrying out a plan to forcibly transfer the population of Gaza into Egypt. “The occupation government is forcing Palestinians to choose between death under bombing or displacement outside their lands,” it quoted the official as saying.

Arab nations warn against displacement: The Saudi and Qatari foreign ministries expressed their “categorical rejection” of Israel’s displacement of the Palestinians, Jordan’s King Abdullah II warned against “any attempt to forcibly displace” Gaza’s population, and Arab League chair Ahmed Aboul Gheit called on UN Secretary-General Antonio Guterres to condemn the “insane Israeli effort to transfer the population.”

Backing from Turkey: “We reject the policy of Palestinians’ being removed from their homes in Gaza and exiled into Egypt. We are fully against it and stand with Egypt,” Turkish foreign minister Hakan Fidan said in a press conference following talks with El Sisi and Foreign Minister Sameh Shoukry in Cairo on Saturday, according to Reuters. The Turkish Foreign Ministry had earlier condemned Israel’s “brutal and indiscriminate” attacks on Gaza.

Western nations are reportedly trying to use Egypt’s economic crisis as leverage: “We understand there have been offers to Egypt by some western governments for debt forgiveness and direct investment in return for a more flexible position on Gaza,” a senior Cairo-based banker reportedly told the National.

Allow in aid or no-one gets out, says Egypt: Egypt is refusing to allow citizens of western countries to evacuate Gaza via the Rafah crossing until Israel and the US agree to allow in humanitarian aid, the Wall Street Journal reported last night. US officials had been in negotiations with Egyptian authorities to allow its citizens to cross the border into Egypt. “We can’t allow a few foreigners out and not allow humanitarian aid in for the Palestinians who will be stuck there,” said one Egyptian official.

No mercy: “Humanitarian aid to Gaza? No electrical switch will be lifted, no water hydrant will be opened and no fuel truck will enter until the Israeli hostages are returned home,” Israel’s energy minister wrote on X (formerly Twitter) on Thursday.

Aid is being flown into Egypt: The Foreign Ministry on Thursday called on countries and international organizations who wish to help Gaza out to send aid to El Arish airport, which the government has designated as a spot for aid collection. Two flights carrying aid, including one from Turkey, landed at the airport yesterday, bringing the total number that have arrived since the conflict started to at least five, according to Reuters.

The flurry of diplomatic activity continued over the weekend as regional leaders scrambled to avert a humanitarian disaster and prevent the conflict from dragging in neighboring countries.

El Sisi spoke to his Brazilian counterpart Lula da Silva, French President Emmanuel Macron, and British prime minister Rishi Sunak over the phone.
Shoukry held talks with his Japanese, German, and British counterparts.
US Secretary of State Antony Blinken has traveled to several countries in the Middle East looking to minimize blowback in the region, including the UAE, Saudi Arabia, Qatar, Jordan, and Bahrain. His first stop-off was in Israel where he pledged more US support.
Iranian foreign minister Hossein Amir Abdollahian has also been touring the region, holding talks with the leadership of Hamas and Hezbollah, the prime ministers of Lebanon and Iraq, the foreign ministers of Qatar and Syria, and the UN envoy to the Middle East.
Chinese foreign ministerWang Yi and Russian president Vladimir Putin have both criticized one-sided US policy for contributing to the crisis and voiced support for the creation of an independent Palestinian state.

A REGIONAL WAR — AND REGIONAL ECONOMIC DOWNTURN?

Iran has warned that it will intervene in the conflict if Israel continues its attack on Gaza, Axios reports, citing two diplomatic sources. During talks with the UN’s envoy to the Middle East yesterday, the country’s foreign minister Hossein Amir Abdollahian said that a ground offensive into Gaza will cross a red line and it will respond. Sporadic exchanges of fire continued on Israel’s borders with Syria and Lebanon at the weekend, while the Israeli military has bombed airports in Syria several times in recent days.

Regional escalation in the Israel-Hamas war could create a global economic downturn: The ongoing war between Israeli forces and Hamas will take a toll on global growth, says Bloomberg, but to what extent will depend on the involvement of other regional actors. In a long read, the media outlet lays out three potential scenarios for how the conflict will hit global oil prices and growth rates.

The worst-case scenario: Bloomberg Economics estimates that if the war escalates into a direct confrontation between Israel and Iran, oil prices could spike to USD 150 per barrel, leading global growth rates to slow to 1.7%. This would chop around USD 1 tn off world output and put global inflation at 6.7% in 2024.

On the Egyptian House of Representatives’ agenda for the 2023-2024 legislative season

It’s a full House: After breaking for a three-month summer recess, MPs reconvene today to fully kick off the 2023-2024 legislative season. MPs are set to discuss and dissect 11 new government-drafted laws and a number of pending legislative amendments over the coming months. Herewith, your primer on the most business-relevant pieces of lawmakers’ agenda:

LABOR-

A new and improved Labor Law: The new draft law was shelved earlier this year as the Madbouly cabinet worked on redrafting it after it came under fire for favoring workers. Prior to the amendments, the new law was going to introduce new labor rights including legislating mandatory annual raises, caps on working hours, and longer maternity leave and notice periods, among other things.

GREEN HYDROGEN-

Green hydrogen incentives on the table: MPs will look into a number of green hydrogen incentives that will give companies VAT and income tax breaks. The companies need to implement their green hydrogen projects within five years and derive a certain percentage of their financing from foreign lenders to receive the incentives. Cabinet approved the incentives in May with the aim of stimulating Egypt’s nascent green hydrogen industry.

In detail: Companies will receive tax breaks of between 33-55% on income earned from the plants, and will pay no VAT on raw materials and machinery purchased for the projects. The facilities will be exempt from real estate tax, stamp tax, and a number of administrative fees. Companies will also be permitted to import and export without having their names in either of the registers.

TAXATION-

A new threshold for tax exemption: The personal income tax exemption threshold is set to rise to EGP 45k from EGP 36k, reducing tax for mns of public- and private-sector employees. If the exemption proposed by President Abdel Fattah El Sisi last month passes the House, this would mark the second time the exemption has been raised this year after the government lifted it from EGP 24k to EGP 36k in July. The proposed amendments to the Income Tax Law will be referred to the House Planning and Budget Committee.

INVESTMENT-

Opening up the importers register: The House will discuss a government-drafted decision allowing foreign investors to register as importers with 10-year licenses, making it easier for them to get goods and production inputs into the country without contracting with an Egyptian middleman.A joint committee featuring the Economic Affairs Committee and the Legislative Affairs Committee will discuss the decision.

Faster dispute resolution: The House will also look into law amendments that would expand the jurisdiction of economic courts, allowing them to take on and settle final appeals for higher-value cases than is currently allowed. It was among 22 moves to reform the business climate put forward by the Supreme Investment Council in May. The move was greenlit by the cabinet in June, but still needs committee approval before it can be ratified.

REAL ESTATE-

IDs for property: Over the summer, the cabinet approved a draft law that would give each property a unique digital ID on a centralized government database. The government would issue ID cards or plates for each property as part of a push to build a comprehensive property inventory and crack down on informal and unauthorized construction.

AND: The House will also discuss and vote on the amendments to 2008 Unified Building Law that ban construction outside authorized areas in cities, villages, and districts. The amendments were approved by the Senate late last year. The House will also look into the new building violation reconciliation law, which replaces a 2019 law designed to legalize informal buildings, and aims to prevent structures built next to the Nile from being legalized. The bill got the greenlight from the House Housing Committee last December.

SOCIAL SUPPORT-

Cost of living support: MPs will look into amendments to the Social Ins. Law granting pensioners and beneficiaries an EGP 600 exceptional cost of living payment. The amendments also grant public-sector employees a one-time bonus payout of EGP 600.The Manpower Committee will discuss and vote on the matter before it moves on to the general assembly.

CAR IMPORT SCHEME-

Expat car import scheme 2.0: The government is set to reopen its expat car import initiative for a three-month period under a draft law approved by the Madbouly cabinet. The scheme allows expats to receive full rebates on customs fees, VAT, and other taxes within five years of purchasing a vehicle, provided they pay them upfront in FX. The Planning and Budget Committee, the Economic Affairs Committee, the Legislative Affairs Committee, and the Foreign Relations Committee will form a joint committee to look into the matter.

REMEMBER: Some 167k Egyptian expats reportedly registered in the first round of the scheme, which raised around USD 900 mn — a little over a third of the USD 2.5 bn originally targeted by the Finance Ministry. The scheme was initially set to remain open for three months from November 2022, but was extended through to May 2023 as part of the government’s efforts to maximize FX inflows.

OIL EXPLORATION-

Four oil exploration agreements: The House will discuss four draft laws authorizing the Oil Ministry to contract Russia’s Lukoil to explore the Eastern desert for oil alongside state-owned GEPCO. the Kuwait Foreign Petroleum Exploration Company (Kufpec), a subsidiary of the country’s state oil company, will work with Pico Petroleum and state-owned Egyptian General Petroleum Corporation (EGPC) to explore for oil in the Geisum and Tawila West concession in the Gulf of Suez. Two of the draft laws concern ExxonMobil, which will partner with state gas firm EGAS to search for gas and crude oil in the offshore Cairo and Masry concessions in the Mediterranean.

REMEMBER: The cabinet greenlit the exploration agreements for these projects over the past few months. The agreements between ExxonMobil and EGAS and between Pico and Kufpee are worth some USD 319.5 mn. The draft laws will be referred to the House Energy and Environment Committee.

LOGISTICS-

Safaga Port’s management: A draft cabinet decision granted the Egyptian joint stock company Safaga Station Operating Company the right to build and develop the superstructure of the Safaga Port as well as handle its management, operation, and management. A joint committee including the Transport Committee and the Legislative Affairs Committee will discuss and vote on the decision.

** ALSO ON THE AGENDA- Amendments to the penal code that could apply tougher penalties for those found guilty of harassment or assault are also on House’s agenda over the coming months. There are also a number of draft laws on regulating drinking water, establishing a medical emergencies fund, regulating pharma practices, protecting senior citizen rights, and regulating child custody procedures.

EBRD considering EUR 165 mn loan to upgrade Egypt’s electricity grid, phase out aged stations

Upgrades to electricity grid could get EBRD backing: The European Bank of Reconstruction and Development (EBRD) is considering providing a sovereign loan of up to EUR 165 mn to upgrade the country’s electricity transmission grid, the lender said on its w ebsi te. The funds would be given to the Egyptian government for on-lending to the state-owned Egyptian Electricity Transmission Company (EETC). The approval date for the loan has been set as 13 December 2023.

Where will the funds go? The loan will finance the upgrade of a 500 kV substation in Cairo governorate that will enable the decommissioning of an aging gas-fired power plant in Shubra El Kheima. Smaller substations across the country are also set for upgrades under the plan. Funds will also be pumped into building a 200 km high-voltage overhead transmission line that will transmit some 2.1 GW of renewable energy from wind plants in the Gulf of Suez. Of the total loan, 60% will be dedicated to the construction of the transmission line, with the remaining 40% going to the 500 kV substation in Cairo and other smaller substations.

Remember: The EBRD is the lead partner in Egypt’s Nexus for Food, Water and Energy (NWFE) energy plan to which it pledged to contribute USD 200-300 mn. The money will be used to decommission 5 GW of gas-fired power plants by 2025 and establish 10 GW of solar and wind projects by 2028. NWFE’s energy project plans to mobilize USD 10 bn in private-sector investment and USD 500 mn in soft loans, grants, and assistance from donors and international financial institutions.

The EU may also be helping out: The project will require EUR 200 mn, with the remaining EUR 35 mn coming from EU grants, which will be subject to EU approvals, the lender wrote. Yet it’s still more than we expected, with local media reporting last week that the government was trying to secure a USD 150 mn loan from the EBRD as part of its NWFE program before the end of the year.

Part of a wider renewables project: The EETC is seeking funds to implement a USD 2 bn investment program that will upgrade the grid, phase out aging stations, and help Egypt reach its goal of having 42% of its electricity renewably generated by 2030 and 60% by 2040.

Egypt’s Mansour Auto plans new factory for vehicle assembly, components manufacture

Al Mansour Automotive is looking to set up a USD 35 mn car assembly and spare parts plant, according to a cabinet statement on Thursday. This is in line with the Madbouly government’s automotive strategy which aims to develop the local car industry in order for Egypt to become a regional manufacturing hub. Information about the timeline for the potential investment wasn’t disclosed.

Is Mansour bringing anyone along for the ride? The statement following the meeting between Prime Minister Moustafa Madbouly and company chairman Mohamed Mansour and CEO Ankush Arora did not disclose whether the company would be partnering with foreign firms on the project.

Assembling EVs? While information about whether the potential factory will be assembling electric vehicles (EVs) or gasoline-powered cars hasn’t been made public, last year the company announced it was close to finishing feasibility studies to start assembling EVs in Egypt. In November,Mohamed Mansour said that he intended to produce 15k EVs over the next three years and the company signed an MoU with long-term partner General Motors in late 2021 to explore the possibility of partnering up to produce EVs locally.

Plans for a 50% locally produced EV: The company also presented a feasibility study to Madbouly for the production of a new electric vehicle made initially with 50% local components, the statement reads. The company added that the locally made EV would progressively be made with more locally produced parts over several years, create thousands of jobs, and produce EVs at more affordable prices.

Remember: MPs approved legislation in July that will see the establishment of a new regulatory body to set policy for the local automotive industry (including EV assembly). The legislation also set up a new fund to offer incentives to companies in the business of assembling environmentally-friendly cars.

Gaza continues to dominate the talk shows

Much like the last eight days, the war in Gaza remained the focus of last night’s talk show coverage as Israel intensified its bombardment, displacing almost 1 mn Palestinians.

“In Gaza there is no safe place,” Al Qahera News bureau chief Mona Okal told Lamees El Hadidi on Kelma Akhira, which also covered Israeli preparations for a ground invasion of the Gaza Strip (watch, runtime: 11:22 | 4:49). Former Palestinian Authority minister Qaddoura Fares told Masaa DMC that the death toll in the Gaza Strip has reached over 2.2k people including more than 700 children, (watch, runtime: 8:15). El Hekaya (watch, runtime: 7:13 | 2:03 | 3:18), Al Hayah Al Youm (watch, runtime: 5:29), and Masaa DMC (watch, runtime: 5:14) also had the story.

El Sisi calls for peace: “Liquidating the Palestinian issue is unacceptable and every conflict that does not lead to peace is futile and unreliable,” President Abdel Fattah El Sisi told a crowd at a military academy graduation ceremony, (watch, runtime: 19:53). El Sisi’s speech got coverage on El Hekaya (watch, runtime: 15:48) and Ala Masouleety (watch, runtime: 2:32).

At the border: Egypt’s refusal to allow US passport holders to cross the Rafah border in Sinai and the mobilization of aid in preparation for its entry into Gaza received coverage on most of last night’s programs including Kelma Akhira (watch, runtime: 1:15 | 3:28), Ala Masouleety (watch, runtime: 15:54), and Al Hayah Al Youm (watch, runtime: 5:49).

“The idea of displacing Palestinians will fail and Israel’s crimes in Gaza will not be tolerated,” Arab League Assistant Secretary-General Hossam Zaki told Ahmed Moussa on Ala Masouleety (watch, runtime: 12:54). This message was later reiterated by the Palestinian Ambassador to Egypt Diab Al Louh (watch, runtime: 12:35). US State Department regional spokesman Samuel Warberg also told Hadith fi Misr on Thursday that “neither the US nor Israel can displace people from Gaza and move them to Egypt,” (watch, runtime: 18:41).

Saudi healthcare giant invests USD 100 mn in Alex project. PLUS: Centamin to invest USD 440 mn in two-year period

INVESTMENT-

Saudi German Hospital’s parent company is investing big in Alex: Saudi healthcare giant Bait Al-Batterjee Group is investing USD 100 mn into its Batterjee Medical City in Alexandria through its healthcare investment platform Humania, Humania CEO Aamir Rehan told Asharq Business (watch, runtime: 1:16). Bait Al-Batterjee Group, which owns the Saudi German Hospitals Group, has made significant investments in Egypt and pledged in 2020 to invest EGP 40-50 bn over a 15-year period. Humania currently has financing commitments in North Africa of more than USD 350 mn, Rehan added, with that value expected to grow.

MINING-

Centamin wants to turn USD into gold: LSE-listed gold miner Centamin wants to pump USD 440 mn into its Egypt operations within a two-year period, the company’s CEO Martin Horgan said during a press conference, reports Al Borsa. Centamin’s capital expenditures for the year require USD 240 mn and a further USD 200 mn for 2024, in addition to funds for the group’s Eastern Desert exploration project, where it currently operates Sukkari, the country’s largest gold mine, the local outlet reported.

Centamin’s exploration plans are nearly underway: The gold miner reached a framework agreement with the Oil Ministry in July on the terms for several exploration concessions it was awarded in 2021, including royalty and net income payments. The agreement still needs MPs’ approval and is expected to come before the House later this year.

Oman’s state energy company offering marks country’s largest ever IPO

IPO fever spreads to Oman: Omani state-owned energy company OQ SAOC raised USD 749 mn after taking public its gas pipeline unit OQ Gas Networks (OQGN), marking the sultanate’s largest-ever listing, writes Bloomberg. OQ sold a 49% stake in OQGN after pricing its shares at the top of the indicative price.

The details:The offering attracted roughly USD 10 bn in demand from investors. OQGN’s order book drew anchor investors, including Belgium’s Fluxys, Saudi Arabia’s Public Investment Fund (PIF), and Qatar’s sovereign wealth fund (QIA). Retail investors received a 10% discount on the IPO price. OQGN shares will begin trading on the Muscat stock exchange on October 24.

Advisors: Bank Muscat SAOG, Bank of America, and our friends at EFG Hermes acted as the transaction coordinators, and Bank Muscat managed the issuance.

It’s been a busy few days for bumper IPO listings in the Gulf: Shares of regional oil and gas giant ADES Holding leapt 30% in their first day of trading on the Saudi stock exchange on Wednesday, closing the day at SAR 17.54. The IPO of the Public Investment Fund-backed company had been heavily oversubscribed, with the institutional tranche seeing nearly 10x more demand than there were shares on offer.

EGX30	20,002	+1.8% (YTD: +37.01%)
USD (CBE)	Buy 30.83	Sell 30.96
USD at CIB	Buy 30.85	Sell 30.95
Interest rates CBE	19.25% deposit	20.25% lending
Tadawul	10,586	+0.1% (YTD: +1.0%)
ADX	9,483	-1.1% (YTD: -7.1%)
DFM	3,965	-2.3% (YTD: +18.9%)
S&P 500	4,328	-0.5% (YTD: +12.7%)
FTSE 100	7,600	-0.6% (YTD: +2.0%)
Euro Stoxx 50	4,136	-1.5% (YTD: +9.0%)
Brent crude	USD 90.89	+5.7%
Natural gas (Nymex)	USD 3.24	-3.2%
Gold	USD 1,941.50	+3.1%
BTC	USD 26,866	-0.6% (YTD: +62.4%)

THE CLOSING BELL-

The EGX30 rose 1.8% at Thursday’s close on turnover of EGP 1.97 bn (9.5% below the 90-day average). International investors were net buyers. The index is up 37.01% YTD.

In the green: Alexandria Containers and Cargo Handling (+16.0%), Orascom Construction (+8.2%) and Madinet Masr (+8.2%).

In the red: GB Corp (-2.0%), Heliopolis Housing (-1.7%) and B Investments (-1.7%).

CALENDAR

OCTOBER

9-15 October (Monday – Sunday): The World Bank and IMF annual meetings in Marrakech, Morocco.

Late October-14 November: 3Q2023 earnings season.

15 October (Sunday): House to reconvene.

15 October (Sunday): The Lynx Forum.

15-17 October (Sunday-Tuesday): Egypt Automotive Aftermarket Exhibition, Cairo International Convention Center.

20 October (Friday): S&P Global Ratings to review Egypt’s sovereign credit rating.

20 October (Friday): Deadline for applying for Dar Venture’s Dare incubator.

26 October (Thursday): Daylight saving time ends.

27 October (Friday): Deadline for bidding in tender for five solar plants on north coast.

27 October- 2 November (Friday-Thursday): Gouna Film Festival.

29-31 October (Sunday-Tuesday): Egypt Energy, Egypt International Exhibition Center.

29 October – 2 November (Sunday- Thursday): Cairo Water Week.

30-31 October (Monday-Tuesday): Intelligent Cities Exhibition and Conference, Dusit Thani LakeView, Cairo.

30-31 October (Monday-Tuesday): Global Business School Network, American University of Cairo.

31 October – 1 November (Tuesday-Wednesday): Federal Reserve interest rate meeting.

Signposted to happen some time in October:

Deadline for ins. providers to link their databases with the FRA
Egyptian-Jordanian Business Council, Amman, Jordan
Gov’t expects to finalize sale of Gabal El Zeit wind plant
October or November: Gov’t expects to finalize stake sale for military-owned fuel retailer Wataniya
Saudi and Egyptian officials will meet to follow up on the project to connect the national power grids of Egypt and Saudi Arabia

NOVEMBER

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

3 November (Friday): Fitch to review Egypt’s sovereign credit rating.

8 November (Wednesday): Turkish-Arab Economic Forum 2023, Istanbul.

9-15 November (Thursday-Wednesday): Intra-African Trade Fair, Cairo.

14-15 November (Tuesday-Wednesday): Destination Africa, Royal Maxim Palace Kempinski Hotel.

14-15 November (Tuesday-Wednesday): Egypt VC Summit, Conrad Hotel.

15-24 November (Wednesday-Friday): Cairo International Film Festival, Cairo.

19-22 November (Sunday-Wednesday): Cairo ICT, Egypt International Exhibition Center.

22 November (Wednesday): Deadline to apply to FRA for credit rating license.

23 November (Thursday): Worldview Education Fair, Cairo. (Register here)

30 November-12 December (Thursday-Tuesday): COP28, Dubai.

November: Bidding deadline for 5 gold mine concessions in the Eastern Desert (TBC).

DECEMBER

December: Kenyan trade conference in Egypt.

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

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

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

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

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

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

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

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

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

Signposted to happen sometime in December:

Gov’t expects to finalize sale of a stake in military-owned bottled drinks company Safi
Gov’t expects to finalize sale of Zafarana wind farm

EVENTS WITH NO SET DATE

2023: The inauguration of the Grand Egyptian Museum.

2H 2023: Egyptian government expected to sign agreements with a consultant for the EuroAfrica electricity interconnector.

2H 2023: President Abdel Fattah El Sisi and Turkish President Recep Tayyip Erdogan expected to hold a summit.

3Q 2023: E-Finance to launch in Saudi Arabia.

4Q 2023: EGX to launch its new futures exchange.

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

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

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

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

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

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

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

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

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

November 2024: Egypt to host the 12th session of the World Urban Forum (WUF12).

2Q 2025: Safaga Terminal 2 to start operations.

2024

JANUARY

7 January (Sunday): Coptic Christmas.

25 January (Thursday): Revolution day.

APRIL

6 April (Saturday): Coptic Easter.

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

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

MAY

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

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

JUNE

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

30 June (Sunday): June 30 Revolution Day (TBC)..

JULY

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

23 July (Tuesday): Revolution Day (TBC).

SEPTEMBER

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

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

OCTOBER

6 October (Sunday): Armed Forces Day.

Sections

About

Privacy & Support

Get EnterpriseAM daily