CBE tightens rules on banks’ bond exposure

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WHAT WE’RE TRACKING TODAY

Automatic fuel pricing returns in 3Q

Good morning, friends, and welcome back. We’ve wrapped another long weekend and have a lot of ground to cover, so settle in.

The CBE is having a busy start to the week. The regulator has tightened the rules on bank investments in corporate and securitization bonds after a recent rise in lenders’ exposure, giving banks six months to align internal policies to a new framework and file board-approved bond rules with the CBE. We unpack the new regulations below. Meanwhile, our latest interest-rate poll has all 11 analysts calling a third consecutive hold on Thursday — the wait-and-see stance holds as the market braces for potential subsidy cuts on one side and global monetary tightness on the other.

There’s a wave of consolidation updates to dive into this morning across M&A. Nassef Sawiris’ OCI move is now backed by the board, Genel Energy makes its entry to Egypt by acquiring Capricorn Energy, Ascom Geology is closing the six-year Raya divestment of Ostool Transport, and the Badreldin family wants to lock up its ownership of Arkan Plaza for EGP 4.1 bn.

BEFORE WE DIVE IN- Congratulations to our Pharaohs and Om el Donia. Egypt has entered the World Cup round of 16 after beating Australia on penalties Friday night. The Pharaohs will now face defending champions Argentina at 7pm CLT on Tuesday, 7 July in Atlanta. Messi’s side needed extra time to edge Cape Verde 3-2 in one of the tournament’s most dramatic matches, setting the stage for a blockbuster last-16 showdown on Tuesday.

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Back to the automatic

We are returning to the quarterly automatic fuel-pricing mechanism this quarter (July-September), Prime Minister Mostafa Madbouly said at the weekly cabinet press conference (watch, runtime: 46:49). The fuel pricing committee will resume reviewing prices every three months, after the government temporarily switched to a cost-recovery model during the subsidy unwind.

The rationale: Madbouly said the government absorbed the cost when global oil prices rose to USD 125 per barrel earlier this year rather than passing the full burden to consumers. The reinstated committee will set prices on average benchmark prices over a period rather than have daily market swings, he said.

REMEMBER- This confirms what a government official told us in April — that the government would return to automatic pricing once global prices stabilized, relinking domestic retail prices for some petroleum products to international benchmarks while trying to curb inflation and hold down the import bill.

Waiting on the banks

The Finance Ministry is reworking the pricing of its next Citizen Bond issuance after banks rolled out competing variable-yield savings products, delaying a tranche that had been expected last month, a senior government official tells EnterpriseAM. “We are waiting for the banking market to finish repricing its products and for investment instruments to stabilize so we can issue the new bonds at an attractive and competitive rate,” the official says, expecting the program to resume later this quarter.

The competition for liquidity is fierce. State-owned NBE and Banque Misr raised yields again last month, taking their three-year fixed certificates to 17.75% annual return (disbursed monthly) and 17.85% (disbursed quarterly), and adding a new variable-rate certificate now at 19.25%. That followed an April rate hike by the two state-owned lenders and shortly after Banque Misr’s 19% variable-rate CD. Private lenders have joined the liquidity fight too — CIB is offering certificates with a variable monthly return of up to 19.5% and HSBC Egypt raised its three-year savings certificate to 17.25%.

The balancing act: The Citizen Bond program is meant to widen the retail investor base for government paper — the first two issuances raised EGP 5.7 bn and EGP 2 bn, with the Finance Ministry also studying fintech distribution alongside post offices to broaden its reach. But it is competing for the same household liquidity as the state-owned and private sector banks, which are sitting on large sovereign portfolios — government bonds are around 34% of Egyptian banks’ assets as of September 2025. This makes pricing the third tranche delicate — too low, and retail money stays in bank products; too high, and the state makes its own EGP 3.4 tn local debt plan for the new FY more expensive.

PSA-

WEATHER- It’s another hot day in Cairo, with the capital in for a high of 36°C and a low of 25°C, according to our favorite weather app.

It’s a few degrees cooler in Alexandria, with a high of 31°C and a low of 23°C.

The big story abroad

Amid no significant developments in the US-Iran peace talks, no single story is dominating the international front pages this morning.

Iran began yesterday a six-day funeral for former Supreme Leader Ayatollah Khamenei, who was killed by US-Israeli strikes at the start of the war in February. Processions will go through different cities in Iran and Iraq and are expected to draw tens of mns of mourners.

US clean power bill soars: US companies are facing a 40-120% surge in green energy costs as the Trump administration restricts renewable tax credits, one survey found. The steep price squeeze is being exacerbated amid a campaign by data center operators to buy up the available clean energy supply.

And in the M&A world: Investment banking giant Goldman Sachs secured its largest share of M&As in Europe, the Middle East, and Africa in nearly a decade during 1H 2026, LSEG data found. The bank advised on 111 transactions, capturing 44% of the region’s USD 676 bn M&A market.

We dive deeper into the trends characterizing global M&A activity in today’s Planet Finance, below.

Meanwhile, on Wall Street: Faster-than-expected income projections are leading to fears of an impending “earnings bubble,” underpinning the ongoing US stock market rally. Driven by a resilient economy and the AI boom, S&P 500 earnings are expected to surge 25% in 2026, Bloomberg data found.

World Cup haunted by “ghost ticketing”? Online ticket marketplace StubHub is under investigation for allegedly allowing sellers to list World Cup tickets they do not possess, a practice known as “ghost ticketing.” Texas Attorney General Ken Paxton opened a probe into the firm's failure to provide tickets, an issue he says StubHub previously blamed on FIFA’s own ticketing platform.

No hiding in the bond book

The CBE is tightening the rules on bank investments in corporate and securitization bonds, after a recent rise in lenders’ exposure to the instruments, according to a circular (pdf). Banks have six months to bring their internal policies in line with the new framework, which requires board-approved rules for bond investments to be filed with the regulator.

One borrower, one number

The new rules turn bond holdings into a concentration-risk exercise. Banks must set caps on total bond investments as a share of both their credit and investment portfolios as well as limits on exposure to any single sector. They must also cap their holdings of any single company’s corporate bonds as a share of their total corporate bond portfolio, and their exposure to a single originator’s securitization bonds as a share of their securitization portfolio.

Bond books can no longer sit apart from lending exposure. A bank’s holdings of a given company’s corporate and securitization bonds must now count toward its total exposure to that client when calculating single-client and related-party limits — closing the gap between what a bank lends a borrower and what it holds in that borrower’s paper.

Credit quality gets a floor — and a price. Banks must set a minimum acceptable rating for the bonds they buy — no lower than BBB- — and a maximum maturity. Bonds at the bottom of that range carry the heaviest capital charge: the CBE is assigning risk weights that rise as quality falls. For long-term bonds, that’s 100% at AAA, 150% for AA- to AA+, 200% for A- to A+, and 300% for BBB- to BBB+. Short-term bonds carry 150% for A-1 / P-1, 200% for A-2 / P-2, and 300% for A-3 / P-3.

The homework gets heavier. Banks must prepare a full study before investing in any bond, identifying the risks that could affect expected cashflows and assessing the creditworthiness of the issuer or originator from available financial and non-financial data. They must monitor performance on an ongoing basis, with quarterly reports to the bank's risk committee, which raises recommendations to the board.

More gates to clear

FRA clearance stays mandatory. The circular reaffirms an existing requirement — first set out in a 24 September 2025 circular — that banks obtain a letter from the Financial Regulatory Authority before extending exposure to FRA-regulated companies, whether through credit facilities, renewals, or securitization, confirming the company is in good standing, compliant with the rules governing its activity, and has no outstanding violations, measures, or administrative penalties.

Consumer and real estate paper face extra tests. Banks must obtain an auditor’s certificate confirming that issuers or originators comply with the CBE’s cap on installments as a share of an individual's monthly income — a limit set in a December 2019 circular — where it applies. Securitization bonds issued by real estate developers or mortgage finance companies must be backed by portfolios tied to units actually delivered to buyers.

No guaranteeing and holding the same issuance. Banks must secure prior CBE approval before guaranteeing bonds issued by companies or institutions, backed by a full study of the issuer’s cashflows and of the securitization originator. And they cannot invest in an issuance for which they have already issued letters of guarantee.

IN CONTEXT- The CBE’s new bond-investment rules land as regulators keep tightening the bank-to-NBFI funding pipe. The CBE recently barred banks from granting or renewing credit facilities to non-bank lenders unless they are coded with the CBE and reporting customer data to both the central bank and I-Score, while the FRA has been tightening the screws on NBFI expansion risks, leverage, and asset-quality monitoring.

OUR TAKE- The move appears to be aimed at ensuring that regulation keeps pace with the rapid expansion of the debt capital market and banks’ growing appetite for corporate and securitization bonds, which offer a faster and often less operationally intensive way to deploy capital than originating traditional loans.

The more interesting question may be what this does to issuance, not just holdings. Two provisions look like they could do the real work: the delivered-units rule cuts against how developers tend to securitize — against receivables from projects still under construction rather than units already handed over — and the bar on holding an issuance you’ve guaranteed pulls at a structure where banks often sit on both sides. If banks pull back on both, the corporates and NBFIs that have leaned on securitization might find the next window narrower and pricier — and themselves nudged back toward the direct lending the CBE is now watching more closely.

IN OTHER REGULATION UPDATES-

The FRA is giving life ins. and capital-formation companies a faster lane for issuing and renewing group ins. contracts, under a new decision issued over the weekend, according to a statement from the authority. The system replaces prior approval with after-the-fact notification for repeat group business — standard contracts issued or renewed using FRA-approved templates, and renewed non-standard contracts already approved by the regulator when first issued.

Notify after, not approve before. Companies must notify the FRA in the first week of the month following issuance or renewal, backed by undertakings from their legal representatives that the contracts match the approved template or previously approved version and follow the technical, actuarial, and reins. arrangements already submitted to the regulator. The FRA can still request copies of the contracts, actuarial reports, actual-experience data, or related documents at any time — a faster lane for repeat group contracts that keeps the regulator’s audit hook intact.

The waiting game continues

The Central Bank of Egypt (CBE) is expected to hold interest rates steady for the third consecutive time when its Monetary Policy Committee (MPC) meets this Thursday, according to an EnterpriseAM poll of 11 analysts and economists. Policymakers are expected to stick to a “wait-and-see” approach, anchoring inflation expectations as the market braces for potential domestic subsidy cuts and global monetary constraints.

The math behind the hold: The consensus is that the overnight deposit rate will stay at 19.00% and the lending rate at 20.00%. While we recently noted that annual urban inflation cooled to 14.6% in May — down from 14.9% in April — the margin for error remains thin. Keeping rates where they are secures a healthy positive real interest rate margin of over 4%, a vital buffer to contain demand-side inflation and keep foreign inflows parked safely in our local debt market.

REMEMBER- The CBE paused its easing cycle at its meeting in May to navigate geopolitical headwinds and contain debt-servicing costs. That stance carries into July MPC after May’s data showed monthly urban price pressures at 1.6%, up from 1.1% in April.

Cooling, for now

“Despite our estimates of relatively contained monthly pressures in June and July, we believe annual headline inflation could accelerate to 16-17% in the coming two months on the back of unfavorable base effects,” Beltone Financial’s Head of Research Ahmed Hafez tells us. Broader electricity tariff increases or another round of fuel price hikes could push inflation toward 18%, he says, “which might trigger a policy response. We are therefore no longer ruling out a 100-bps interest rate hike in 3Q 2026.”

Thndr economist Esraa Ahmed agrees that the upside risk is active, pointing to the potential for another fuel price hike as Brent remains volatile. “Given no foreseeable end to current regional tensions, we believe the CBE will keep rates where they are until further notice.”

Economic analyst Ehab Saied echoes the sentiment. “I expect a hold in the upcoming meeting because the slowdown in inflation is primarily driven by base effects. By August, I expect it to look toward rising again, and therefore it will be difficult for the Central Bank to resume monetary easing, even though it is in dire need of every 1% cut to ease the government debt service burden.”

The deflationary turn

Post-war dynamics are structurally flipping previous supply-side shocks on their head. “The tensions and the war that were pushing prices upward have cooled significantly, which has reflected on global commodity prices, with oil retreating from near USD 80 per barrel to just over USD 60 currently,” Ahly Pharos’ Head of Research Hany Genena tells us. This has trapped producers who bought expensive inventory during April and May, forcing them to face sharp price drops from competitors and devalued stock.

Consumers are also postponing purchases in anticipation of further price cuts, sparking a dual stagnation in demand and supply. “The pressures that were inflationary two months ago have now clearly turned into deflationary pressures,” Genena says. Rather than cutting corridor rates now, he suggests the CBE might eventually trim the reserve requirement ratio (RRR) by 2% to 4% to relieve tight bank liquidity.

AASTMT economics professor Shaimaa Wagieh favors the same cautious route, giving a 70% probability to a hold against a 30% chance of a limited 50-bps cut. “The closest scenario is to fix interest rates during the next meeting, as part of a policy of anticipation and assessing the impact of previous cuts on inflation rates and economic activity,” she says, aligning with the precautionary approach dominating global central banks right now.

The currency cushion

The recent EGP appreciation — dipping below the EGP 50 mark against the USD — has eased immediate macro pressures, driven by a record USD 53.13 bn reserve cushion, robust remittances, and hot money inflows. “The current decline in the USD below the EGP 50 mark has many causes, chief among them the receding intensity of regional geopolitical risks,” London-based economist Ali Metwally tells us. Sustaining those gains, he says, will require continued geopolitical calm, stable energy prices, and the absence of a sudden surge in USD demand.

EFG Hermes’ Head of Macroeconomic Analysis Mohamed Abu Basha also sees little reason for an immediate policy shift, saying that while the US-Iran memorandum of understanding is positive, “uncertainty remains high, and the market will monitor the extent of commitment to the agreement and its effectiveness.” Banking analyst Mohamed Abdel Moneim adds, “I believe the CBE will remain conservative until the outlook clarifies regarding inflation trends, the status of the war, and broader geopolitical developments. The closest scenario is a hold.”

The indirect squeeze

Analysts agree that the CBE’s current policy remains highly restrictive, leaving no room or necessity for premature rate cuts. “The CBE no longer relies solely on raising official interest rates as its exclusive tool to mop up liquidity,” veteran banker and EG Bank board member Mohamed Abdel Aal explains. “During the past period, the CBE allowed public and private banks to proactively deploy high-yield savings instruments, which effectively absorbed a significant portion of liquidity, encouraged EGP savings, limited dollarization, and strengthened the local currency, without the need for an additional direct hike in official policy rates.”

The Fed constraint

The international monetary backdrop remains hawkish under Kevin Warsh. “The US Federal Reserve’s decision to maintain interest rates unchanged within the 3.50-3.75% range adds an external factor of caution that cannot be ignored,” financial analyst Hany Abou El-Fotouh says. “[Keeping] USD rates relatively high makes any rapid cut in interest rates on the EGP more sensitive regarding capital flows and the exchange rate. Therefore, I project a 75% probability for a rate hold.”

Economic analyst Ahmed Shawky likewise expects global rates to remain elevated as the Fed under Warsh’s leadership prioritizes inflation control, underscoring that the US economy is still growing at a strong pace, which preserves pressure on emerging markets to maintain attractive risk premiums to prevent capital flight.

Initially favoring a possible marginal cut, former Banque Misr Deputy Chair Sahar El Damaty ultimately altered her view: “I see that the CBE may resort more to holding again instead of lowering interest rates, especially since our inflation has gone down... the situation now has become difficult, the USD is very strong and will have an impact on our currency in Egypt... and the interest rate must be kept high so we can continue to attract hot money.”

Take the money

Nassef Sawiris’ EUR 866.6 mn move to consolidate OCI Global anchors this morning's M&A updates, with three other consolidation transactions running alongside it: Genel Energy's USD 360 mn acquisition of Capricorn Energy for its Egyptian foothold, Ascom Geology's closing of a six-year Raya divestment of Ostool Transport, and the Badreldin family's EGP 4.1 bn buyout of Kuwaiti minority stakes in Arkan Plaza.

OCI board backs Sawiris’ buyout

Dutch-listed fertilizer giant OCI Global’s board of directors is advising shareholders to take Sawiris’ money, according to a bourse disclosure. The board — minus Nassef and Nadia Sawiris, who sat out the vote — is recommending investors accept the EUR 4.10 per share allcash buyout from Nassef Sawiris’ family office, NNS Holding. This clears one of the two remaining hurdles to unwinding the company’s long-running ownership saga — a general assembly approval is the second. NNS says the buyout is intended to break the deadlock over OCI’s proposed merger with Orascom Construction, and values the company at roughly EUR 866.6 mn, by our math.

Not everyone is happy with the bid: The court-appointed directors — installed in January after a Dutch court found the board hadn’t given minority shareholders a fair shake — gave the offer a neutral nod and flagged real governance concerns. The directors agreed to let OCI convene an extraordinary general meeting to sign off on the OCI-Orascom merger that the rest of the board had recommended in December 2025.

With some strings attached: The resolution put to shareholders will only take effect once NNS has formally launched its cashoffer, declared it unconditional, and completed settlement. The board still backs the offer and continues to recommend the merger too, saying the two would work best in concert.

What’s next: OCI will call an EGM to approve the Orascom merger once the Dutch financial markets regulator, AFM, clears NNS’s offer memorandum — both will be published together, though no date has been set. The board must then issue its position on the offer at least 10 business days before the tender period closes. The merger agreement expires if the transaction doesn’t close by 31 December 2026.

The numbers stack up: The EUR 4.10 offer looks like the safer wager against a wind-down. The offer represents a 9% premium to OCI’s EUR 3.76 undisturbed close on 24 June and an 11% premium to the 30-day volume-weighted average price of EUR 3.71. Rothschild & Co, the board’s financial advisor, calculated a solvent wind-down would net shareholders between EUR 4.00 and EUR 4.12 a share before tax in its base case — dropping to EUR 3.43-3.53 in a downside scenario — with full liquidation not expected until 2031 or 2032. The board’s sharper argument is tax: money tendered in the offer escapes the 15% Dutch withholding tax that would hit most wind-down distributions, which is why it calls the offer superior to a wind-down even for shareholders who might qualify for a DWT exemption.

Then there’s the number that makes this complicated: Based on Orascom Construction’s ADX closing price on 30 June, the Orascom merger is currently worth about EUR 6.08 a share before tax — EUR 5.16 net of the Dutch withholding tax — 26% above what NNS is offering incash. That gap is exactly why the court-appointed directors said some minority shareholders have told them they would rather take their chances with Orascom stock than cashout now — either way, Sawiris comes out ahead.

SOUND SMART- A solvent wind-down is basically corporate triage in which management chooses to close a business while it’s still financially capable of paying its creditors, instead of throwing good money after bad. This is to preserve as much value as possible for shareholders while freeing up capital to invest elsewhere.

Why just a neutral nod? The two independent directors said the offer price is “not unreasonable” based on their own advisor Axeco’s fairness opinion, but “not sufficiently convincing” for them to actively recommend tendering.

The governance concerns go back to the original Orascom merger structure, which the directors say gave minority shareholders a weak hand from the start:

The rubber stamp: Sawiris’ controlling stake meant he could effectively approve the merger at an extraordinary general meeting without a single other shareholder’s support;
No cash exit: The transaction offered no upfront cash alternative, forcing all shareholders into Orascom Construction stock listed outside the European Economic Area;
Broker gridlock: Some shareholders couldn’t even receive those shares through their existing accounts;
Tax disparities: The exit was structured so Sawiris himself wouldn’t owe Dutch dividend withholding tax, while a significant share of minority holders would;
Incomplete valuations: OCI’s own fairness opinion on the merger only tested the exchange ratio, not what shareholders would ultimately walk away with.

Genel Energy takes its first Egyptian foothold

London-listed Genel Energy will acquire Edinburgh-based Capricorn Energy for USD 360 mn in a cash transaction that gives the Kurdistan-focused producer its first foothold in Egypt, according to a statement (pdf). The agreement still needs sign-off from Capricorn shareholders and from two Egyptian bodies — the Egyptian General Petroleum Corporation in order to transfer the concessions and clearance from the Egyptian Competition Authority.

The Egyptian portfolio: Genel is inheriting Capricorn’s Western Desert assets — a 50% non-operated interest across the eight concessions Capricorn merged into a single licence, including the Badr El Din Merged Concession, North East Abu Gharadig, and Alam El Shawish West. BAPETCo operates the fields, and Cheiron is Capricorn’s 50% partner. The portfolio produced roughly 20k boepd in 2025, generating USD 81 mn in net income.

Why it matters: The acquisition brings a new international upstream investor into Egypt as the government works to attract fresh capital to boost oil and gas production. It also validates recent efforts to make Western Desert assets more attractive through concession reforms. Earlier this year, EGPC signed a USD 208 mn agreement with Cheiron and Capricorn to merge eight existing production fields at Badr El Din and drill 44 new wells.

Payment structure: Capricorn shareholders are getting USD 4.74 per share — a 34% premium to the undisturbed share price. Genel will pay USD 3.75 in banknotes, while the remaining USD 0.99 will come as a special dividend funded from Capricorn’s own reserves. The USD 75 mn payout is conditional on the company maintaining sufficient liquidity through the transaction’s expected close in 2H 2026.

A wrap on the Ostool saga

Investment conglomerate Raya Holding wrapped up its EGP 641 mndivestment of a 90% stake in Ostool Transport and Logistics to Ascom Geology & Mining — one of Qalaa Holding’s subsidiaries, according to two separate bourse disclosures (here, pdf and here, pdf). The EGX-listed industrial mining outfit now owns 90% of the logistics firm, which Raya Holding had been trying to exit for some six years now. Ostool was founded in 2010 as a joint venture between Raya and Qalaa — making the buyout somewhat of a homecoming for the logistics player.

The price tag: At EGP 8.22 per share, the transaction represents a 30.5% premium over the EGP 6.3 fair value set by independent financial advisor Fact for the buyer. Raya’s board signed off on the fair value study in mid-May, with the FRA clearing the transaction shortly after. Ascom’s own board had approved its side of the fair value study last month.

Market reax: Raya’s shares closed up 0.3% to EGP 7.7 apiece last Wednesday, with Ascom’s stock inching up 0.2% to EGP 59.2.

Full Badr

The family behind Badreldin Real Estate Development paid EGP 4.1 bn (c. USD 83 mn) to acquire the remaining 40% of Al Badr for Investment, the holding company that owns Sheikh Zayed’s Arkan Plaza, the Arabic Press reports, citing two sources it says are familiar with the matter. The exiting investors are two funds affiliated with Kuwait’s Public Institution for Social Security, which held 20% each. The transaction bumps the Badreldin family’s stake from 60% to 100%.

The rationale: The Kuwaiti exit is part of a wider restructuring of the funds’ Egyptian holdings, one source said.

Why it matters: Arkan Plaza, opened in 2012 across some 125k sqm of West Cairo, houses retail, office, and banking spaces alongside a five-star hotel of up to 180 rooms. As Arkan Palm CEO Amr Badreldin told us last year, the complex draws some 45k visitors a day, translating to roughly 12-13 mn visitors a year. With Arkan Plaza fully secured, the family is currently channeling its focus into its massive “205” development in West Cairo — a sprawling central entertainment and commercial hub set to be 11x larger than Arkan Plaza.

AI can help Egyptians shop — Checkout needs proof

Egyptian shoppers are already using AI before they buy. Visa’s Stay Secure 2026 study found that 91% of consumers in Egypt have used AI tools while shopping, whether to compare prices, find gift ideas, or check reviews or product ratings. The appeal is clear: 97% say new technologies, including AI-powered tools, are making online shopping faster and easier.

That comfort drops when AI moves closer to payment. Only 38% trust AI agents to complete checkout on their behalf. For banks, merchants, payment providers, and brands, the gap matters because choosing what to buy and authorizing a payment require different levels of confidence.

Checkout is where reassurance needs to become visible. Shoppers need to know that the payment experience is secure, familiar, and able to alert them when something looks suspicious. As AI plays a bigger role in shopping, the payment step will need to work harder to earn confidence.

AI can also support fraud protection. The study found that 63% feel AI has made scams easier to recognize today, while 88% believe AI will play a critical role in protecting consumers from fraud in the future.

The challenge is clear: AI can make shopping faster and easier, but checkout still needs to earn trust.

Wire for the tire cluster

Chinese steel manufacturer Zenith Steel is investing USD 300 mn in a Sokhna plant that will make raw materials currently being imported for Egypt’s growing cluster of tire factories, according to a statement. The company — a subsidiary of Chinese conglomerate Zhongtian Group — will build on a 320k sqm plot inside the Chinese-operated Teda zone, producing 120k tonnes of steel cord a year and 50k tonnes of bead wire — the steel reinforcement used in vehicle tires. It plans to export around 30% of output to the Middle East, Europe, and the Americas.

The plant supports Egypt’s auto localization push. The government has been trying to move the sector beyond assembly by tying incentives to local content, with the revamped Automotive Industry Development Program (AIDP) setting local-content requirements at 20% and recent auto projects already building in feeder-industry facilities. Zenith is setting up next to the Chinese tire makers already inside Teda — like Sailun’s USD 1 bn plant, which broke ground last year — supplying the steel cord and bead wire those factories would otherwise import.

REMEMBER- The Suez Canal Economic Zone (SCZone) is also set to welcome a USD 291 mn tire plant to support auto component localization, while Chaoyang Langma Tire is lining up a USD 190 mn facility for heavy-truck and passenger-car tires. Elsewhere, China’s Linglong has been mulling a USD 2 bn tire export hub in Borg El Arab, with plans to produce tires for cars and heavy vehicles alongside feeder products including rubber and carbon black.

Also from the SCZone

Kuwaiti logistics heavyweight Agility Logistics Park will invest USD 30-35 mn to build a 53k sqm regional distribution center in the SCZone, handling storage, consolidation, and re-export services, according to a statement. The project builds on Agility’s USD 25 mn Sokhna customs center that opened in February 2025 on a 21k sqm plot. It also cements Agility’s growing local footprint, which includes the Yanmu East Logistics Park developed in partnership with Hassan Allam Utilities in East Cairo.

Why it matters: The Ain Sokhna port is shifting to a fully automated export system designed to slash customs clearance times, integrate inspection authorities, and fast-track outbound shipments. It also fits the government’s wider attempt to use the SCZone as a trade-processing platform, including recent pitches to position the zone as a storage and re-export hub for regional commodity flows.

Raya IT taps new CEO

Raya Holding has appointed Marwa Abbas (LinkedIn) as CEO of Raya Information Technology, succeeding Hisham Abdel Rassoul (bio), according to a company statement seen by EnterpriseAM. Abbas joins Raya IT after more than 30 years at IBM, where she held senior roles in Egypt and elsewhere in the Middle East and Africa, most recently serving as general manager and technology leader for IBM Egypt and North East Africa. She takes over immediately as Raya IT enters its next phase of regional growth, with Abdel Rassoul remaining in place to support the transition through the end of December 2026.

We sat down with Abbas back in 2022 for our My Morning Routine column.

The Octagon is here

President Abdel Fattah El Sisi yesterday inaugurated the Octagon, or State Strategic Command Headquarters, which houses the Defense Ministry as well as the main branches of Egypt’s Armed Forces, Major General Hisham Al Halabi told El Hekaya’s Amr Adib (watch, runtime: 7:11). The complex — located in the New Capital — will enhance digital connectivity within the security apparatus and nearby government functions, giving the Egyptian government the means to predict and respond to traditional threats as well as cyber, social, economic, and political security issues.

During his address, El Sisi gave us a glimpse into Egypt’s post-IMF future — the government will launch a “comprehensive national economic program” upon the completion of the current reform program with the International Monetary Fund, El Sisi said. This program will put Egypt on the path to sustainable growth, improve living standards, and boost economic resilience. Our eighth and final review under the current program with the Fund will kick off in November.

Also, privatization got a shout out, with El Sisi saying that he directed the Madbouly government to accelerate the implementation of the privatization program.

A clean route

The New and Renewable Energy Authority (NREA) signed two contracts to supply state-generated clean power to the Suez Canal Economic Zone (SCZone), according to a statement. The first lets the NREA wheel green power — via the national grid and then the SCZone Infrastructure Company’s distribution network — to the zone’s contracted consumers. The second is a one-year power purchase agreement with the Suez Canal Container Terminal (SCCT) to supply the East Port Said operator with clean electricity.

Why it matters: East Port Said handles around 79% of Egypt’s transshipment trade (as of 2024), and it is one of only two ports — with Morocco’s Tanger Med — on the EU’s list of neighboring container transshipment ports under the ETS. Being listed means a stop there is disregarded for tax purposes — a ship calling at East Port Said en route to or from the EU must still account for 50% of the emissions on the larger long-haul voyage, so the stop no longer “resets the clock.” That removes an advantage the port would otherwise offer and gives carriers reason to reroute through non-listed havens — Saudi or UAE ports, or even Alexandria or Sokhna. Cutting the terminal’s own operational emissions is one way East Port Said stays competitive as those rules bite.

The buyer’s own climate math: SCCT operates the main container terminal at East Port Said and is owned by APM Terminals, part of Maersk — which is targeting net-zero emissions by 2040. A clean-power PPA lets a flagship hub cut the carbon footprint of its operations to serve its parent’s decarbonization goals, at a terminal that took the #1 regional and #3 global spot for port efficiency after its 2025 expansion.

Transport corridors

Egypt and Turkey signed an MoU to cooperate on regional and international transport corridors — aiming to strengthen connectivity between Asia, Africa, and the Arab world — during Transport Minister Kamel El Wazir's visit to the Türkiye Maritime Summit. The agreement covers cooperation on transit transport, new trade routes, and strategic corridors including the Middle Corridor and Iraq’s Development Road.

Why it matters: The MoU lays the groundwork for broader transport integration between Egypt, Turkey, Saudi Arabia, Jordan, and Syria, as governments seek to improve multimodal connectivity and diversify trade routes linking Asia, Africa, and Europe. It also supports Egypt's ambition to become a regional transport, logistics, and transit trade hub by expanding its role in emerging trade corridors beyond the Suez Canal.

Beyond logistics

DP World plans to expand its investments in the Suez Canal Economic Zone into manufacturing, Chairman Essa Kazim said during a meeting with Prime Minister Mostafa Madbouly. The UAE logistics giant is looking to build on its existing logistics operations by adding value-added industrial projects and creating jobs.

Joining the party

London-based professional services firm Ernst & Young (EY) is setting up a regional IT outsourcing and consulting hub in Egypt, with the aim of creating 1k specialized tech and consulting jobs over the next three years, according to a statement from the Communications and Information Technology Ministry. Under an agreement with the Information Technology Industry Development Agency, the center will export high-value services to the wider MENA region — from cybersecurity and data analytics to AI and risk consulting.

Why it matters: EY is joining the growing outsourcing industry in the country, which doubled in value to USD 4.8 bn from 2022 to 2025. Unlike traditional industries, exporting tech and consulting services requires minimal capital and almost no imports, and it prints hard currency for the national balance sheet. With heavyweights like Deloitte and Concentrix already pouring serious capital into local hubs, the government may realize its goal of seeing USD 9 bn in digital exports this year.

AI at the wellhead

The Oil Ministry is pitching a new AI joint venture with Abu Dhabi-based AIQ — an Adnoc subsidiary — under the proposed AIQ Egypt JV, according to a statement from the ministry. The platform would plug data from the Egypt Upstream Gateway into AIQ’s tools to support exploration and production decisions, including seismic interpretation, well data analysis, and asset management.

IN CONTEXT- The pitch lands at a time when the government is trying to sustain the petroleum sector’s return to growth after more than two years of contraction. The state has cleared USD 6.1 bn in arrears to international oil companies, introduced new upstream incentives, and is now looking to de-risk a USD 1.3 bn drilling push targeting 101 wells this year.

Raw interest

Several Gulf companies have expressed interest in buying into Arab API’s pharma raw-materials plant currently under construction in Ain Sokhna, Al Arabiya reports, citing Arab Company for Drug Industries and Medical Appliances (Acdima) Chairwoman Olfat Ghorab. The state-owned holding company is open to bringing on new investors for the project, which is targeting operations in 2028 and exports to the Gulf, North Africa, and parts of Central Asia.

REMEMBER- Arab API broke ground in January on the Suez Canal Economic Zone (SCZone) plant, which was billed at the time as a USD 165 mn project to help curb Egypt’s pharma raw-material import bill. Egypt produces most of its finished meds locally (around 91%), but still imports over 90% of raw materials and APIs, making upstream localization the real gap.

The winner’s paradox

Global M&A surged to a record USD 2.8 tn in 1H 2026, up 49% y-o-y, as megadeals swept through markets despite geopolitical turbulence, the Financial Times reports, citing LSEG data. Bain's midyear M&A outlook also points to a broad rebound, with activity in the first five months of the year putting 2026 on track to become the second-best year for M&A on record.

Bigger, not busier: Just 47 transactions worth more than USD 10 bn accounted for more than USD 1.3 tn — nearly half of global M&A value — while the total number of transactions fell 9% to around 24k, a six-year low, according to LSEG data. Bain similarly found strategic M&A value rose 36% y-o-y while transaction count increased just 2%, suggesting companies are making fewer, but bigger wagers.

Corporates are placing the bets — PE is sitting most of them out. Financial sponsor transaction value fell 9% even as strategic buyers pushed ahead, Bain says — a split that shows corporate acquirers, not buyout firms, are driving the rebound.

EMEA is having a moment: Strategic transaction value across Europe, the Middle East, and Africa is up 77% y-t-d (as of May), powered by large targets in the region, Bain says. Europe has become an M&A hotspot as companies chase consolidation and scale, including the USD 24 bn offer for Altice France and Kone's USD 34.4 bn bid for TK Elevator.

AI is also pushing M&A beyond tech: Technology led all sectors with USD 649 bn of announced transactions in 1H, according to LSEG. Bain points to the proposed NextEra Energy-Dominion Energy merger as an example of how data centers are reshaping acquisition tactics, with utilities looking for the scale needed to build power generation for large-load demand data centers.

The catch? Bain calls it a “winner’s paradox”: Companies are chasing scale and resilience at the same time that AI transformation is becoming impossible to ignore. Or, as the report puts it: “How could we possibly manage an AI transformation alongside, or through, a massive integration program? At the same time, how can we afford not to?”

That means every acquisition thesis now needs an AI lens. Bain says acquirers need to assess how AI changes the target's business model, where synergies can arrive faster, and how much extra cost AI transformation adds to integration. In short: The M&A market is hot again, but integrating acquisitions while reinventing the business for AI may prove the harder task.

What's next: Bain has global dealmaking on pace to top USD 5.3 tn for the full year — just short of 2021's record USD 5.6 tn. Whether that pace holds through 2H will say a lot about whether this is a genuine cycle or a megadeal sugar high.

EGX30	50,533	+0.1% (YTD: +20.8%)
USD (CBE)	Buy 49.06	Sell 49.19
USD (CIB)	Buy 49.00	Sell 49.10
Interest rates (CBE)	19.00% deposit	20.00% lending
Tadawul	10,827	-0.3% (YTD: +3.2%)
ADX	9,901	+0.9% (YTD: -0.9%)
DFM	6,059	+1.1% (YTD: +0.2%)
S&P 500	7,483	0.0% (YTD: +9.3%)
FTSE 100	10,679	+0.3 (YTD: +7.5%)
Euro Stoxx 50	6,413	+0.8% (YTD: +10.6%)
Brent crude	USD 72.12	+0.5%
Natural gas (Nymex)	USD 3.25	+1.5%
Gold	USD 4,187	+1.5%
BTC	USD 63,315	+0.9% (YTD: -27.7%)
S&P Egypt Sovereign Bond Index	1,072	+0.1% (YTD: +8.0%)
S&P MENA Bond & Sukuk	152.08	-0.1% (YTD: +0.1%)
VIX (Volatility Index)	15.81	-2.1% (YTD: +5.8%)

THE CLOSING BELL-

The EGX30 rose 0.1% at Wednesday’s close on turnover of EGP 7.6 bn (12.0% below the 90-day average). Local investors were the sole net buyers. The index is up 20.8% YTD.

In the green: Qalaa Holdings (+5.9%), E-finance (+2.2%), and Orascom Construction (+1.4%).

In the red: ADIB (-3.8%), GB Corp (-1.7%), and Emaar Misr (-0.7%).

CALENDAR

JULY

9 July (Thursday): Monetary Policy Committee’s fourth meeting of 2026.

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

AUGUST

19 August (Wednesday): Connected Banking Summit, Fairmont Nile City Hotel.

20 August (Thursday): Monetary Policy Committee’s fifth meeting of 2026.

26 August (Wednesday): Prophet Muhammad’s birthday.

SEPTEMBER

8-10 September (Tuesday-Thursday) El Alamein International Airshow, El Alamein International Airport.

10-12 September (Thursday-Saturday): Egyptian Entrepreneurship Sector Diagnostics Report Summit, El Gouna.

15 September (Tuesday): IMF to hold its eighth review of Egypt’s USD 8 bn EFF arrangement.

24 September (Thursday): Monetary Policy Committee’s sixth meeting of 2026.

27-29 September (Sunday-Tuesday): Global Conference on Population, Health, and Human Development.

OCTOBER

6 October (Tuesday): Armed Forces Day.

10-11 October (Saturday-Sunday): Egypt Women's Health Summit (EWHS), Cairo Marriott Hotel.

26-28 October (Monday-Wednesday): IEX Egypt, Egypt International Exhibition Center, Cairo.

29 October (Thursday): Monetary Policy Committee’s seventh meeting of 2026.

NOVEMBER

6-8 November (Friday-Sunday) : Global Entrepreneurship Festival, JW Marriott Hotel, New Cairo

DECEMBER

7-10 December (Monday-Thursday): Food Africa, Egypt International Exhibition Center, Cairo.

17 December (Thursday): Monetary Policy Committee’s eighth meeting of 2026.

EVENTS WITH NO SET DATE

July 2026: British Prime Minister Keir Starmer set to visit Egypt.

2H 2026: Operations at Deli Glass Co’s new USD 70 mn glassware factory kick off.

2026: The Egyptian-American Economic Forum.

4Q 2026: Banque du Caire IPO.

2027

16-18 January (Saturday-Monday): Agri Expo, Cairo International Convention Center.

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

April 2027: Tenth of Ramadan dry port and logistics hub to begin operations.

EVENTS WITH NO SET DATE

2027: Egypt to host EBRD’s annual meetings.

2027: Egypt-EU Summit 2027.

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

September 2028: First unit of the Dabaa nuclear power plant begins operations.

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