Central Bank surprises with 200-bps rate hike

1

What We're Tracking Today

The Grand Egyptian Museum will open its doors soon

Good morning, wonderful people, and welcome to a new workweek. We get underway this morning with the central bank hiking rates by 200 bps and yet another update on prospects for an expanded IMF package, the arrival of which looks to be at least several days away.

WATCH THIS SPACE-

#1- We’re in for more funds from the EU: The European Union has approved additional financial and economic support to Egypt, EU CommissionerOlivér Várhelyi told Foreign Minister Sameh Shoukry during a phone call on Friday, according to a Foreign Ministry statement. The statement did not disclose the details of the additional funding, but the EU welcomed in the “golden age of EU-Egyptian relations” with a EUR 9 bn investment pledge last month following a Shoukry-led delegation visiting Brussels

The fine print: Out of the EUR 9 bn, “we have already mobilized EUR 5.8 bn in investments in Egypt,” Várhelyi said at the time. It is also unclear how much of the remaining EUR 3.2 bn is part of a concrete pledge of fresh capital from the EU and related bodies and how much is private-sector investment the EU hopes will come through.

#2- The GEM is almost ready: Officials are putting the final touches on the Grand Egyptian Museum (GEM) with the aim of having the museum ready by the end of this month and officially open its door to visitors shortly after that, according to a cabinet statement. The museum has been partially open for some time now, hosting a number of events and exhibitions — Enterprise held the first business event there more than a year ago — but the galleries displaying its permanent collection have not been open to visitors.

#3- Robo-advisors are coming to Egypt: The Financial Regulatory Authority (FRA) will “in the coming weeks” publish its robo-advisor regulations and license requirements, FRA boss Mohamed Farid said yesterday, Al Borsa reports. The license will allow local firms to integrate robo-advisors — automated and potentially AI-driven financial advisors that offer a variety of services — into their operations.

HAPPENING TODAY-

#1- Senate reconvenes to discuss agricultural exports: After a two-week break, the Senate is reconvening todiscuss a report on the government’s strategy to promote EU-bound agricultural exports. Agricultural exports increased 25% y-o-y to bring in USD 3.5 bn in 2023, which showcases the country’s “capacity to double agricultural exports to European markets in the coming years in order to narrow the gap between imports and exports and generate greater revenues of FX,” the report argues.

Committees, assemble:

The Industry Committee will discuss a proposal to establish agricultural industries in the New Valley governorate;
the Agricultural Committee will review smart irrigation techniques currently in place;
the Economics Committee will discuss taking advantage of Comesa and the African Continental Free Trade Area to open free economic zones in Africa;
the Energy Committee will review the government’s strategy to expand renewable energy sources.

#2- The French foreign minister is in town: French Foreign Minister Stéphane Séjourné is in Cairo to discuss bilateral relations and Israel’s war on Gaza with Foreign Minister Sameh Shoukry as part of a wider regional tour, according to the State Information Service. A joint press conference is planned for after the meeting, before Séjourné leaves for Amman, followed by Tel Aviv, Ramallah, and Beirut.

#3- Blinken is in the region: US Secretary of State Antony Blinken is landing in the Middle East today, for his fifth trip to the region since Israel’s war on Gaza started. Blinken’s four-day itinerary includes Saudi Arabia, Egypt, Qatar, Israel, and the West Bank, a State Department statement said. The trip will focus on ways to prevent the spread of the conflict in Gaza and the attacks by Yemen’s Houthis in the Red Sea. A specific timeline of Blinken’s trip has not been released.

Speaking of Gaza- An Egyptian official has denied Israeli claims that Egypt has signed off or will be signing off on an arrangement with Israel regarding the Philadelphi Corridor, Al Qahera News reported (watch, runtime: 00:25)

HAPPENING THIS WEEK-

#1- S&P Global will be out with Egypt’s purchasing managers’ index for January tomorrow. The index last clocked in at 48.5 in November, marking the 37th straight month the country's non-oil economy has been in contraction.

`#2- Attention, gold miners: The deadline for the — three times extended — international gold and minerals exploration tender from the Shalateen Mining Company is this Thursday.

CIRCLE YOUR CALENDAR-

Fancy studying in New Zealand?The government of New Zealand is offering full scholarships for postgraduate degrees in food security and agriculture, climate change and the environment, renewable energy, and good governance. Applications for the New Zealand Manaaki scholarship are open until 29 February. Check it out, here.

Want funding for your climate project? Egyptian climate projects in their pre-feasibility study stage can now apply to take part in the Climate Finance Accelerator and receive access to investors, coaching, and networking. The application door closes on Monday, 12 February. Read more and apply here.

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

***
Want to read EnterpriseAM Egypt in Arabic or know some who would? Check out the Arabic version of the website here or subscribe here.

Looking for an end-of-day news wrap or thoughts on what to watch or where to go tonight? Sign up for EnterprisePM, delivered to your inbox just in time for the drive home or post-work unwind, Sunday through Thursday.
***

RED SEA WATCH-

Suez Canal receipts almost halved in January: Suez Canal receipts fell 47% y-o-y to USD 428 mn in January as the number of ships passing through the waterway dropped almost 37% to 1.4k last month thanks to Houthi attacks on shipping in the Red Sea, Suez Canal Authority boss Osama Rabie told Kol Youm (watch, runtime: 9:28).

The latest: French shipping giant CMA CGM has again suspended shipments through the Red Sea until further notice due to the heightened risk of attacks from Yemen’s Houthis, Reuters wrote, citing sources it says have knowledge of the situation. The shipping firm returned to the Red Sea in January, after pausing transit in December.

THE BIG STORIES ABROAD-

#1- One story dominates the international front pages this morning: The US and the UK hit 36 Houthi facilities in Yemen yesterday, just a day after the US launched airstrikes on some 85 targets in Iraq and Syria with reported ties to Iran’s Revolutionary Guards Corps (IRGC), killing 40 and compounding fears of regional escalation, Reuters reported. “Our response began [on Friday]. It will continue at times and places of our choosing,” US President Joe Biden said in a statement. The attacks come in response to an Iran-backed attack that killed three US servicemen in Jordan last week.

Iraq summoned its US charge d’affaires in Baghdad to insist on “its refusal that its lands be an arena for settling scores or showing force being warring countries,” according to a statement from the Iraqi Foreign Ministry.

#2- More signs of thawing Egypt-Iran relations: Foreign Minister Sameh Shoukry called his Iranian counterpart Hossein Amirabdollahian on Thursday to discuss bilateral ties and developments in Gaza, an Iranian foreign ministry statement wrote.

Remember: Egypt and Iran have been in talks for some time now about normalizing ties, with the two countries’ presidents meeting for the first time in November and speaking of restoring ties in a phone call a month later.

IN THE TECH WORLD- Inching closer to the world’s first AI Act: EU officials have signed off on the “final compromise text” for the AI Act — the world’s first. The landmark legislation that was voted on last month aiming to safeguard the use of AI. The act now awaits the greenlight from EU lawmakers.

Central Bank of Egypt hikes rates to keep inflation in check

The Central Bank of Egypt (CBE) hiked interest rates by 200 basis points at its first Monetary Policy Committee meeting of the year on Thursday, it said in a statement (pdf). The first rate hike since August aims to reinforce the downward trajectory of inflation as pressures mount amid geopolitical uncertainty, disruption of shipping in the Red Sea, and supply chain setbacks “raised uncertainty surrounding the inflation outlook.”

Where rates now stand: The Monetary Policy Committee (MPC) raised rates by 200 bps, leaving the overnight deposit rate to 21.25%, the overnight lending rate to 22.25%, and the main operation and disc. rates to 21.75%.

Only a few saw this coming: Only two of the nine analysts we spoke to for our customary interest rate poll anticipated the hike. Ahmed Hafez, head of Research at Beltone Holding, predicted a 150-200 bps hike as ongoing discussions with the IMF have signaled a shift in priorities toward inflation targeting, suggesting a probable monetary tightening in the coming months. Meanwhile, Economist Mona Bedeir deemed monetary tightening “an urgent necessity at the current stage.”

Another step towards a larger IMF package: “Given the ongoing talks and discussions with the IMF and that we’re so close to reaching a staff-level agreement, I’m sure that part of [the conditions] include further monetary tightening,” Hafez told Enterprise. “I don’t think this 200 bps hike is the end of it. Our initial expectation was of a 300 bps hike during the first half of 2024 … Another 100-200 bps hike should be enough to anchor inflation expectations,” Hafez said.

Further hikes down the road? The anticipated currency devaluation will likely be paired with interest rate hikes, analysts suggest. Two of those we spoke to for our poll expected the CBE to move forward with a devaluation paired with a rate hike, without specifying when it could happen — Zilla Capital’s Head of Research Aya Zoheir saw the CBE raising rates by 300-500 bps in tandem with a devaluation, while IBIS Consulting Economist Ali Metwally penciled in a 300 bps rate hike paired with a devaluation that will see the EGP trading at 40-55 against the greenback. Abu Dhabi Commercial Bank’s Monica Malek separately told Reuters that the hike likely comes ahead of a widely anticipated devaluation of the EGP and the announcement of a larger IMF package.

It’s all about timing, suggests Goldman Sachs’ Farouk Soussa. “The authorities’ preferred strategy is to bring the parallel rate under control before unifying the exchange rate,” he told Bloomberg. “This means bringing demand for USD down through tighter policies and increasing supply through external borrowing. When the parallel rate is at a more reasonable level, the unification of the currency becomes easier through a devaluation.” The rate hike could be seen as a first step in that process, the business information service suggests.

Speaking of: Societe Generale sees the government devaluing to 40-45 against the greenback, up from the current official rate of EGP 30.9, Asharq Business reported, citing a research note from the bank.

The rate hikes got ink in the foreign press: Reuters | Bloomberg.

Egypt is within striking distance of IMF agreement, Fund chief says

IMF staff and Egyptian officials are close to finalizing a new financial support package for Egypt, the Fund’s Managing Director Kristalina Georgieva said during a media roundtable on Thursday. “We are in this very last stretch where we are working on the details of implementation … we’re not talking about a long protracted period at all,” Georgieva said.

Egypt is at the top of the Fund’s priority list: “Working with Egypt is a very high priority. Both because it matters to the Egyptian economy and the Egyptian people, but also because it matters more broadly in regional context,” she said.

The Fund is happy with our progress: An IMF delegation spent almost more than two weeks in Cairo, meeting Egyptian officials to iron out the details of the agreement. The delegation wrapped up its visit on Thursday, having extended its stay by at least two days. Egyptian authorities made “excellent progress” on the conditions that should be met before the Fund moves forward with the long-stalled first and second reviews of Egypt’s USD 3 bn loan program, delegation head Vladkova Hollar said in a statement. The two sides “agreed on the main policy elements of the program. The authorities expressed a strong commitment to act promptly on all critical aspects of Egypt’s economic reform program.”

But no word on how big the package will be: There’s no consensus on how big the loan will be, with local and international outlets putting the figure between USD 6-10 bn. Our sources agree, with seven who have knowledge of the talks putting the package in that range. It appears we have two options: Go for a gradual, managed float and take on less funding — or go for a full float and get a larger assistance package.

The one thing we know: In all cases, the value of the program will include the USD 3 bn the IMF had originally committed.

What’s next? The IMF and Egyptian authorities will continue discussions virtually “to finalize the Memorandum of Economic and Financial Policies (MEFP), and identify the magnitude of additional support from the IMF and other bilateral and multilateral development partners,” Hollar said.

How long before we have a package in place? It’s unclear, but chatter in policymaking circles is that it could take as long as 8-10 days.

Will it be “devalue, then get a package”? Or “get more money, then devalue”? It’s anyone’s guess, but it appears the answer lies in part on how much money we ultimately sign up for.

Will that bilateral support include a massive UAE real estate buy? Chatter ripped through Egypt on Wednesday night and Thursday that officials had lined up a USD 22 bn land sale to the United Arab Emirates. Officials have privately downplayed the idea. We think there were (or are) early-stage talks on investment, but last week’s rumors were heavily overblown.

** Read more: EnterpriseAM last week ran a deep dive into everything you need to know about our imminent IMF package and EGP devaluation.

International coverage: The Financial Times and Bloomberg had the story.

Serial entrepreneur Sherif El Zayat on why he’s stepping down as CEO of EK Holding — and what comes next

Sherif El Zayat stepped down as CEO of EK Holding on Thursday, 1 February 2024, to start a new chapter that will see him focusing on the growth of two family-owned packaging businesses and other ventures that could see him deploy tens of mns of USD in Egypt in the years to come. His passion: Manufacturing for export.

El Zayat will stay on at EKH until the end of March, helping settle in new managing director Jon Rokk (LinkedIn), who formally took the reins on Thursday. Rokk has more than 30 years of experience in a list of industries that overlaps nicely with the business that El Zayat helped take to the next level, including oil, gas, petrochemicals, and infrastructure.

Who’s Jon Rokk? He was most recently chief operating officer of South Tees Development in the United Kingdom, where he oversaw “Europe's largest regeneration project in the energy transition and renewable energy sectors, with investments exceeding GBP 2 bn,” EK Holding will say in a statement (pdf) later this morning. Rokk has a decade of regional experience, particularly in Qatar, the UAE and Oman, and has worked on acquisitions in the UK, China and the Mideast.

El Zayat grew EK Holding’s bottom line nearly 7x since 2015 to USD 241 mn at the end of 2022 (and USD 137 mn in 9M 2023). That’s no mean feat when you consider that (a) most of the company’s lines of business generate revenue in EGP, (b) many of those businesses (gas distribution and electricity come immediately to mind) are highly regulated or have USD-linked expenses, and (c) we’ve had more than one devaluation in that period.

Longtime Enterprise readers know El Zayat as a serial entrepreneur. He and his brother Ahmed led the acquisition and turnaround of Al Ahram Beverages, which they transformed from a failing, state-owned enterprise into an industry pioneer that they later sold to Heineken in a landmark transaction. El Zayat stayed on for a period post-acquisition before leaving to build Misr Glass Manufacturing, which he exited to Middle East Glass in 2016.

We spoke on Thursday at his home in Maadi. Edited excerpts from our conversation:

ENTERPRISE: Why are you stepping down now?

SHERIF EL ZAYAT: It was simply time for someone else to take on the challenge. I told Loay [Al Kharafi, EK Holding’s chairman and largest shareholder] maybe nine or ten months ago that I felt it would soon be time to start focusing on my personal businesses. That started a search process that saw us choose Jon as the next CEO. We’ve been doing handover meetings, visiting our various investments, in the last while. I’m leaving EK Holding in good hands.

E: You had a good run with EK.

SEZ: Yes, alhamdulillah [smiles]. Look at our share price. Last year, we paid our highest dividends ever — USD 150 mn in dividends, or 11 cents per share. CIB paid out USD 50 mn and they’re what … five times … ten times larger than us?

We’ve built EK Holding into a much larger, much more resilient business, one that can perform in any economic cycle. From power generation and distribution to gas distribution, fertilizers, building materials, upstream, and district chilling, the business aligns with Egypt’s macro drivers and will thrive. EK today is robust and very well-positioned to continue growing in the years to come.

E: What are the personal businesses you want to focus on as you step away from EK?

SEZ:There are two: GoodSeal Packaging, which makes aseptic bags and bag-in-box solutions for the food industry, and United Glass Containers Co (UGC), which is best known for making ampules and vials for the pharma industry. GoodSeal is the newer of the two — we started about three years ago and today we export 70-80% of our production to Europe, including Scotland and Germany.

I love the food packaging market: The industry as a whole is worth USD 350 bn globally right now and that’s going to be USD 550 bn in the next seven years.

Our focus is all on import substitution in Egypt and on exports, exports, exports. What makes us unique is that we develop low-emission products. We’re taking market share away from high-plastic products, and the fun is working with multinationals to create and produce packaging with CO2 emissions that are 70-80% lower than mainstream options.

One of the great things about the business is that I own 70% of it and the rest of the shareholders are family and friends. It’s time to really focus on how to grow these two businesses heavily, to take them to the next level. There’s the potential to grow the two businesses by multiples — multiples. They’re smaller than EK, of course, but the growth potential is incredible.

E: Do you have any plans to invest outside of Egypt?

SEZ:No, I’m committed to investing a lot more in my country. I believe so much in Egypt as a hub for exports — in harnessing Egyptian knowledge and expertise and competitive advantages. We’re not living up to our potential as an export powerhouse. Europe imports USD 3 tn in products — and from Egypt? Peanuts.

We have a huge advantage against China, against India — even against European companies themselves. The Chinese pay a lot of customs duties. They have huge freight costs. Europeans? High labor and high raw materials costs. Egypt has zero customs access to Europe, our freight costs and time to market are much lower, we have cheaper raw materials and cheaper labor.

When you have good quality control systems and you train your people, nobody can compete with Egypt. The problem is in companies taking the time to learn the markets and hone the unique value proposition they’re offering their offshore clients.

And it’s not just Europe — I’m really excited about Africa, too, for the same reasons and more. It’s zero customs because of Comesa, for example, but when you sell to Africa, you’re eligible for export subsidies from the Egyptian government. Maybe they’re slow in paying the subsidies, but they come.

E: How are GoodSeal and Untied dealing with the FX challenge right now?

SEZ:It obviously helps that while we do sell in the domestic market, we’re very focused on exports. For us, the big thing has become simply to “think” in USD. Six months ago, I told the management team that even though our financials are in EGP, even though we’re an entirely Egyptian business, we’re going to track our P&L in USD. That’s how we measure growth, success, profitability — in USD terms.

E: You mentioned earlier that you’re mulling over some new investments…

SEZ:And I’m not going to tell you about that now. When the time comes. Look, I love my country and I’m going to build companies here — projects that will demand tens of mns of USD. I’m excited — about food packaging, for sure, and about pharma packaging, where I see massive room to grow. And there are other things.

But the joy of running a private company after being CEO of a publicly traded corporation? It will be really nice not to have everyone know everything about the business, about the strategy. You have less ability to maneuver a public business outside the spotlight. You’re judged quarter by quarter by quarter. The market doesn’t appreciate a decision that sees the margins come down because you’re making the right call to invest in something you absolutely know will pay off in much higher growth in the years to come.

E: We’ve known each other for a lot of years—

SEZ:Yes. [Smiles]

E: —and this is as happy as I’ve seen you in a long time.

SEZ:I loved my time with EKH. We took it places — and it has lots of room to grow. But in looking at the potential of my personal businesses? I don’t remember the last time I was this excited about building a business. The only thing that would make it better would be having my sons join me as they finish their university education.

If there’s one thing more fun than being an entrepreneur, it’s building the next generation of entrepreneurs. And if your kids want to join you? If there’s a chance they could share your passion? What more can you ask for in life? All I want is to have fun and see my children be happy.

Egypt’s Finance Ministry introduces bookkeeping scheme to account for FX price differentials

FinMin wants to soften the blow of the FX crunch on the books: The Finance Ministry wants to change the way businesses calculate their foreign exchange costs to determine their tax base, according to a resolution published in the Official Gazette.

What does it mean? The decision seeks to account for the price differences between the FX rates on the official and parallel markets throughout the previous year, targeting companies whose operations necessitate the use of foreign currency, with a specific focus on importers and exporters.

The new regs have been brewing for at least a couple of weeks: Enterprise was the first to report last month that the government was putting together new rules that would enable companies to account for FX price differentials from the volatile exchange rate. The difference between the official and parallel market exchange rates throughout 2023 was calculated at an average of 26.64%, a source at the Tax Authority told us.

In detail: The accounting scheme will augment FX costs booked by companies throughout 2023 by the following percentages:

January-April: 9%
May-August: 24%
September-October: 34%
November-December: 60%

But the rules come with strings attached: The FinMin intends to apply the scheme only to the difference between FX revenues generated from exports and FX costs arising from imports in a bid to discourage companies from selling foreign currency on the black market, one source said. The rules also don’t apply to the official list of goods — including fuel, wheat, and meds — seeing companies are able to source USD at the official rate for such purchases.

What’s next? The Finance Ministry and central bank officials will meet today to set the mechanism by which the new rules will be implemented and iron out the legal details, our source said. The decision will not go into effect until both parties agree on a framework.

Egypt’s net foreign liabilities inch up to record high in December

Egypt’s net foreign asset deficit hit a new record high in December,as pressure on the nation’s external position continues to take its toll. Our net foreign asset deficit inched up to over USD 27.2 bn, after having narrowed to USD 27 bn in November, according to Enterprise calculations based on Central Bank of Egypt figures.

Commercial banks dragged the figure down,with net foreign assets in commercial banks rising to a deficit of USD 16.2 bn in December, compared to a USD 15.8 bn deficit recorded the month before. This comes after two months of net foreign assets narrowing in the banking system.

But on the plus side, the central bank saw slight improvement,with its net foreign asset deficit reducing to negative USD 11 bn in December, from negative USD 11.2 bn in the previous month. This marks the second month in a row wherein the bank’s net foreign assets witnessed marginal improvements.

EIPICO, Ibnsina Pharma, Delta Sugar join Egypt’s EGX30 after index review

Who’s in and who’s out of the EGX30? EIPICO, Ibnsina Pharma, and Delta Sugar have been added to the EGX30, following the bourse’s semi-annual review, according to an EGX statement (pdf). CIRA Education, Credit Agricole, and B Investments were removed from the index to join the broader EGX70 index.

New eligibility criteria for EGX30 listing: EGX30 stocks now must trade for 95% of the trading days, instead of 65%, during the review period to maintain their spot in the index. The move aims to enhance liquidity and activity in the market.

ALSO- EFG Hermes once again topped the EGX’s brokerage league table in January, with a market share of 13.4%, according to EGX figures (pdf). Arqaam Securities came in second place (10.9%), followed by Thndr Securities (7.8%), and CI Capital (5.8%). EFG Hermes continues its streak heading into the new year, having had a monopoly over the top spot in every month but one in 2023.

Is the Egyptian government planning the USD 22 bn sale of Egyptian land to Gulf investors?

Uncertainty was the overarching theme on the airwaves last night. If a devaluation is happening, when and by how much? Is the government selling off a huge plot of land to Gulf investors? The talking heads took their time speculating yesterday evening.

Coming to you straight from the rumor mill: No two people appear to be on the same page on whether or not the government will soon ink an agreement selling a huge piece of land in the North Coast’s Ras El Hekma to Gulf investors for USD 22 bn. It is unclear where the news originated from but social media and media reports have had a lot to say since Wednesday, when the story first broke out.Government and industry sources Enterprise spoke to denied that we are nearing an agreement with such a large sum, but one of them explained that foreign investors have been eying Ras El Hekma for some time now.

Moussa is very pro the idea: Ala Masouleety’s Ahmed Moussa came to the agreement's defense after it was met with scrutiny from Egyptians.“Ras El Hekma will be a global city on Egyptian soil. Its development has been discussed since 1975 — it’s not a new topic,” Moussa said (watch, runtime: 84:19). “What about this project upsets you? It’ll bring in investment, it’ll include a green residential area, a tourism and entertainment hub, a medical complex, universities, and advanced industrial areas.”

Adib and El Hadidi want more transparency: “If the agreement is this big, why aren’t we being informed? Why not tell us how much we’re getting? The [government’s] silence is suspicious,” Adib said (watch, runtime: 3:15). Kelma Akhira’s Lamees El Hadidi echoed his statements. She called on the government to announce the details of the agreement, explaining that “the economy isn’t run on voice notes or rumors, but on facts and transparency” (watch, runtime: 5:36).

Another thing the nation’s talking heads were speculating about: The when of the imminent EGP devaluation. The central bank will devalue the currency “within weeks,” House Budget Committee head Fakhri El Fiqi told El Hadidi (watch, runtime: 8:44). El Hadidi, meanwhile, seemed confident that a devaluation will be happening “soon.” She expressed her hopes that this devaluation — which would mark the fifth time the country has devalued the EGP since 2016 — will bridge the gap between the official and black market exchange rates (watch, runtime: 2:07).

It’s about a lot more than just devaluating: “If we don’t make the right choices following the devaluation — simplifying bureaucratic processes, bringing in more transparency, supporting industry and exports, and making room for the private sector — we will fall into the same predicament within a year and a half,” El Hadidi warned. Devaluation chatter was also heard on El Hekaya (watch, runtime: 21:13).

AND- More high-interest CDs on the way? Local banks might soon be rolling out new certificates of deposit (CDs) with yields of over 27% after the central bank hiked interest rates by 200 bps on Thursday, banking expert Tarek Metwally told El Hadidi (watch, runtime: 5:46).

The Economist believes Egypt deserves another bail out

Egypt’s coverage in the international press is still all about the economy, with The Economist saying that the country is too big to fail and the world should bail it out again even though previous economic reforms didn’t turn out as planned. “The wider Middle East, already burning, cannot afford a conflagration in Egypt, too. At a minimum, it would render Egypt incapable of helping broker or implement a peace deal between Israel and the Palestinians,” the article reads.

Savers pour EGP 565 bn into Egyptian banks’ high-yield CDs

BANKING-

High-yield CDs reel in EGP 565 bn: Savers have so far put away EGP 565 bn into the high-yield certificates of deposit (CDs) introduced last month by the National Bank of Egypt (NBE) and Banque Misr, Youm 7 reported on Thursday. NBE has racked up some EGP 365 bn, while Banque Misr has attracted EGP 200 bn from the 12-month CDs that offer either a one-time return of 27% upon maturation or monthly payouts at a 23.5% annualized rate.

CAPITAL MARKETS-

EFG Hermes to trim back global operations: Our friends at EFG Hermes will reportedly shutter its frontier operations, close its Singapore office, and fully exit Pakistan, according to an internal memo cited by Bloomberg. The lender is also considering exiting its UK operations and is reassessing its businesses in Nigeria and Kenya, which will operate on an execution-only basis for the time being, the outlet added. EFG Holding declined to comment when Enterprise reached out.

STARTUPS

Flat6Labs backs Estonian AI portfolio company in USD 1 mn round: Cairo-headquartered regional VC firm Flat6Labs participated in a USD 1.05 mn funding round for Estonia-based AI visual analysis startup and Flat6Labs portfolio company CognitiweAI OÜ, according to a statement (pdf). TechOne Venture Capital, Eleven Ventures, Domino Ventures and Caucasus Ventures also participated in the round, the statement added.

CAPITAL MARKETS-

More from Azimut: Asset manager Azimut aims to set up a new metals investment fund and “other investment products” in the coming period, Al Borsa quotes CEO Ahmed Abou El Saad as saying. The company, alongside Evolve Holdings, founded Egypt’s first gold investment fund last summer, whose first tranche was over 15x oversubscribed.

AVIATION-

EgyptAir sells Airbuses to support fleet transformation: US-based aircraft leasing company Azorra has purchased 12 Airbus A220-300 planes from national flag carrier EgyptAir, a statement (pdf) from Azzora’s legal counsel for the transaction Matouk Bassiouny & Hennawy (MBH) said. The transaction will support EgyptAir’s “ongoing fleet transformation,” the statement added.

Turkey’s Erdogan taps new central bank governor

Turkey has a new central bank governor: Turkish President Recep Tayyip Erdogan has appointed Fatih Karahan (bio) as the new head of the country’s central bank after its former governor Hafize Gaye Erkan stepped down, claiming to be facing a smear campaign from local media, Bloomberg wrote.

About Karahan: He has experience working as an economist at the New York Fed and Amazon. He taught at Columbia University and New York University and received his PHD in economics from the University of Pennsylvania. He has been serving as the central bank’s deputy governor since July 2023.

Too much change for an already fragile economy: Erkan held the position for a mere eight months but resigned following allegations that her father was involved in the bank’s affairs. The TRY fell against the greenback following the news, dipping 0.5% to 30.5 per USD — the currency is down 23% against the USD since Erkan assumed her position in June.

ALSO ON PLANET FINANCE-Plans laid for delayed Reddit IPO: Social media platform Reddit has chosen the New York Stock Exchange for its market debut penciled in for March. The company is aiming for an initial valuation of USD 5 bn when it goes public, down from a USD 10 bn valuation in 2021, an unnamed source told the Financial Times.

EGX30	28,434	+0.5% (YTD: +14.2%)
USD (CBE)	Buy 30.83	Sell 30.96
USD at CIB	Buy 30.85	Sell 30.95
Interest rates CBE	21.25% deposit	22.25% lending
Tadawul	11,914	+1.0% (YTD: -0.4%)
ADX	9,456	-0.1% (YTD: -1.3%)
DFM	4,229	+0.2% (YTD: +4.2%)
S&P 500	4,959	+1.1% (YTD: +4.0%)
FTSE 100	7,616	-0.1% (YTD: -1.5%)
Euro Stoxx 50	4,655	+0.3% (YTD: +2.9%)
Brent crude	USD 77.33	-1.7%
Natural gas (Nymex)	USD 2.08	+1.4%
Gold	USD 2,054	-0.8%
BTC	USD 43,050	-0.1% (YTD: +1.8%)

THE CLOSING BELL-

The EGX30 rose 0.5% on Thursday’s closeon turnover of EGP 5.2 bn (49.7% above the 90-day average). Regional investors were net sellers. The index is up 14.2% YTD.

In the green: Delta Sugar (+8.6%), Juhayna (+6.8%) and Madinet Masr (+6.2%).

In the red: Egypt Kuwait Holding (-8.3%), CIB (-3.5%) and Eastern Company (-2.3%).

CALENDAR

2024

FEBRUARY

8 February (Thursday): Deadline to apply to Shalateen Mining Company’s international gold exploration tender.

11 February (Sunday): Deadline to apply for the Chicago Booth Executive Programin El Gouna.

15-16 February (Thursday-Friday): Brazilian President Luiz Inácio Lulada Silva meets with President El Sisi in Cairo.

19-21 February (Monday-Wednesday): Egypt Energy Show, Egypt International Exhibition Center

25 February 2024 (Sunday): Deadline to bid for 23 blocks in an international oil and gas tender.

MARCH

10 March (Sunday): First day of Ramadan (TBC).

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

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

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

APRIL

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

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

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

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

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

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

MAY

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

5 May (Sunday): Coptic Easter.

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

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

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

JUNE

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

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

JULY

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

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

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

SEPTEMBER

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

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

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

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

OCTOBER

6 October (Sunday): Armed Forces Day.

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

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

NOVEMBER

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

DECEMBER

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

EVENTS WITH NO SET DATE

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

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

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

1Q 2024: Egyptian-Qatari Joint Supreme Committee.

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

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

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

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

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

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

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

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

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

2025

EVENTS WITH NO SET DATE

2Q 2025: Safaga Terminal 2 to start operations.

2027

EVENTS WITH NO SET DATE

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

Sections

About

Privacy & Support

Get EnterpriseAM daily