EBRD interested in acquiring stakes in United Bank, Banque du Caire

Wednesday, 29 Nov 2023

EBRD interested in acquiring stakes in United Bank, Banque du Caire

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Privatization

EBRD interested in acquiring stakes in United Bank, Banque du Caire.

Investment Watch

Turkish textile firm to invest USD 500 mn in new Egypt factory.

M&A WATCH

e-Finance could acquire two digital payments firms + Savola’s Panda bids for Alfa stores.

DEBT WATCH

NUCA closes second EGP 15 bn securitized bond issuance this year.

WAR WATCH

Egypt, Qatar + US push longer ceasefire in Gaza.

Also on our Radar

DP World breaks ground on USD 80 mn Sokhna logistics park.

PLANET FINANCE

Greenback slips to three-month lows as market bets on Fed rate cuts.

HARDHAT

Amendments to the Building Reconciliation Act will soon be the law of the land. Here’s what to expect.

What We're Tracking Today

Madbouly wants to bridge the gap between official and black market USD rate + Is this the end of the EGX rally?

Good morning, folks: There’s more cause for cautious optimism in this morning’s still-tepid domestic news cycle: the EBRD has signaled it wants to get more involved in the government’s privatization agenda; a Turkish manufacturer is planning a major investment in the SCZone; and Gaza could get an extra few days respite from Israel’s brutal war if Egypt, Qatar and the US get their way. All that and more below.

EGX WATCH- The benchmark EGX30 fell 3% during yesterday’s trading to close at 25.1k. This comes following a weeks-long rally that resulted in the index hitting a series of unprecedented highs triggered by investors rushing into alternatives to LCY cash deposits in response to the prolonged currency uncertainty.

Driving the fall: Credit Agricole (-5.8%), CIB (-4.8%), and Eastern Company (-4.4%).

What’s up: A wave of profit-taking — and perhaps an (early) suggestion that folks are taking a wait-and-see approach to whether the EGP has stabilized against the greenback for the moment.

The USD currently stands at anywhere between 48-53 to the greenback in the parallel market depending on how much you’re buying, when, where, and from whom. Pricing on the black market remains, by definition, opaque — and it is difficult to figure out with any clarity what volumes look like.

Speaking of the EGP: Prime Minister Moustafa Madbouly discussed yesterday what his government is doing to address the FX crunch. The PM told a meeting of committee heads from the House of Representatives that steps have so-far included investor incentives that aim to boost domestic manufacturing, exports and FDI.Bridging the gap between the official and black market exchange rates is at the top of the list of the government's economic agenda, he said.

Remember: Through the team at the Finance Ministry, the PM ultimately guides the nation’s fiscal policy, but he cannot float the EGP or set interest rates. Those tools are the sole purview of central bank Governor Hassan Abdalla.

HAPPENING TOMORROW-

#1- It’s t-minus 24 hours to COP28: The countdown to COP28 is nearly over and global leaders in climate, policy, and business are heading to Dubai for 13 days of intense negotiations to save our planet from climate catastrophe. Check out the full agenda for the summit, which runs from 30 November to 12 December.

The loss and damage fund and who’s going to pay for it is already causing a ruckus:Former world leaders and leading economists have signed a joint letter calling on oil-producing states — like the conference host country and its Gulf neighbors — to pay a USD 25 bn levy to fund the loss and damage fund, the Guardian reports. Little progress has been made on the landmark loss and damage fund over the past year after delegates from some 200 nations signed off on the pact at the close of COP27.

#2- It’s OPEC+ o’clock: OPEC+ member states are meeting tomorrow to discuss how the cartel of oil-producing nations will respond to falling oil prices, decide on next year’s production targets, and make a decision on whether to prolong production cuts. The meeting was initially scheduled from Sunday, but was pushed back after alliance members filed to reach a consensus on the output quotas for African members.

Another delay could still be in the cards: Reuters picked up chatter from OPEC+ sources that the once-delayed meeting may be delayed again as African member states seem adamant on their refusal to cut production quotas for 2024.

ELECTION 2023-

The presidential election is fast approaching: Egyptian expats are set go to polls on 1-3 December to choose between incumbent President Abdel Fattah El Sisi, Al Wafd Party’s Abdel Sanad Yamama, the Egyptian Social Democratic Party’s Farid Zahran, and the Republican People Party’s Hazem Omar.

Voters here at home will cast their ballots on 10-12 December. First-round results are due on 18 December and a runoff, if necessary, will take place in early January 2024.

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

HELP GAZA-

Want to support relief efforts in Gaza, but don’t know how? We’ve got you. More than 1 mn people in Gaza have been thrown from their homes and every human being there lacks access to food, water, and fuel amid the most intense bombardment any population has endured this century.

The folks at Talabat are processing donations for a range of Gaza relief appeals by charities including the Egyptian Food Bank and Misr El Kheir. Pay in EGP using your credit card.

Or check out our list of charities to which you can make direct donations via bank deposit and / or Fawry.

THE BIG STORIES ABROAD-

Charlie Munger, right-hand man of Warren Buffett, dies aged 99: Bn’aire and market sage Charles Munger, who was second-in-command to business magnate Warren Buffett for almost 60 years, has died aged 99. Under their management of Berkshire Hathaway, the previously-failing textile company averaged an annual gain of 20% between 1965 and 2022 — roughly twice the pace of the S&P 500 Index — to become the multi-bn USD conglomerate that it is today.

Expo 2030: Riyadh was successful in its bid to host the World Expo in 2030, beating out South Korea’s Busan and Rome, which had also launched sharp-elbowed bids to host the event, Reuters wrote. The event usually attracts mns of visitors and helps its host general USD bns of investments.

CZ can’t go home: Binance founder Changpeng Zhao can’t leave the US until the court decides whether he should stay in the country until his sentencing hearing in February or be allowed to return to his home in the UAE, according to a federal judge’s ruling (pdf) on Monday. The former CEO of the world’s largest cryptocurrency exchange last week stepped down and pleaded guilty to breaching US anti-money laundering laws. (WSJ | Reuters | Bloomberg)

*** It’s Hardhat day — your weekly briefing of all things infrastructure in Egypt: Enterprise’s industry vertical focuses each Wednesday on infrastructure, covering everything from energy, water, transportation, and urban development, as well as social infrastructure such as health and education.

In today’s issue: We dive into what to expect from the amendments to the building reconciliation act soon to be signed into law.

Tags:

economy EGX foreign exchange Moustafa Madbouly What We're Tracking Today

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EBRD wants to snap up stakes in Egyptian state lenders: The European Bank for Reconstruction and Development (EBRD) is interested in acquiring minority stakes in several state-owned financial institutions that have been earmarked for privatization under the government’s offering program. The European lender has opened talks with the Sovereign Fund of Egypt (SFE) about investing in both United Bank and Banque du Caire — two of the three banks on the official privatization list — but is still waiting for clarity over the size of the stakes the government is willing to sell, Heike Harmgart, who heads the bank’s south- and east-Mediterranean operations, told Al Arabiya.

Refresher: The government rebooted its privatization program earlier this year, naming 35 companies that will sell stakes to private investors as part of the government’s efforts to end the ongoing currency crisis and meet the terms of its USD 3 bn assistance program with the IMF.

It hasn’t been smooth sailing so far: BdC has long planned to IPO on the EGX but repeatedly delayed the share sale due to poor market conditions. Meanwhile, talks with the Saudi sovereign wealth fund to sell 100% of United Bank collapsed earlier this year due to disagreements about how to value the lender amid volatility in the EGP/USD rate. Arab African International Bank is the third lender on the privatization list.

The government says it will have more news on privatization before the year is out: Cabinet is expecting to finalize agreements to sell a significant stake in its hotels holding company and military-owned fuel retailer Wataniya before the end of the year. It wants to sell two wind energy plants, the military-owned bottled water company Safi, the combined-cycle power plant in Beni Suef, and a number of desalination plants before the end of the fiscal year in June.

The EBRD is playing a role in privatizing new and renewable energy projects,Harmgart told the Saudi news outlet. The bank is working alongside the International Finance Corporation (IFC) to increase private-sector participation in desalination projects, and is currently in the initial procurement phase for four plants.

ICYMI: The government expects to offload stakes in four desalination plants during the first half of 2024, as part of a five-year plan drafted by the Housing Ministry to sell stakes in 21 plants.

Tags:

banking Banque du Caire EBRD Heike Harmgart state privatization program United Bank

Investment Watch

Turkish textile firm to invest USD 500 mn in new Egypt factory

This Turkish textiles producer is expanding its footprint in Egypt: Turkish textile manufacturer Küçükçalik Group is planning to start work on a USD 500 mn synthetic fibers factory in the Suez Canal Economic Zone (SCZone) in January, a move that could lower the country’s annual import bill by USD 1 bn, the Arab World News Agency reported yesterday, citing an unnamed government official.

The details: The company will establish the factory through its local subsidiary KC G Textile Egy pt, and is working on obtaining a 250k sq m land plot in the zone. It will produce 500 tons of fibers a year when it becomes operational in 2025, before increasing output to 2.5k tons.

Localizing the industry: KCG is planning to cover a quarter of Egypt’s domestic demand for fibers within two years of operation, the official said. Egypt spends around USD 1 bn a year importing fibers.

Küçükçalik is no stranger to Egypt: KCG has been operating in Egypt since 2007 when it set up a textile factory in Tenth of Ramadan. The factory generates USD 65 mn in annual revenues and works with brands such as Ikea and Zara. The company has invested USD 75 mn in the project.

Tags:

investment watch KCG Textile Manufacturing textiles Turkey

M&A WATCH

e-Finance could acquire two digital payments firms + Savola’s Panda bids for Alfa stores

Two M&A stories have our attention this morning: The first ise-Finance’s bid to acquire two digital payments firms as it works to up its presence in the retail market, while a grocer owned by Saudi conglomerate Savola is reportedly interested in acquiring stores from struggling Egyptian retailer Alfa.

E-FINANCE EYES ACQUISITIONS-

e-Finance could acquire two companies: State-owned fintech firm e-Finance is in talks to acquire two retail-focused digital payments companies, a source at the company told Enterprise yesterday, without disclosing their identities. The first one was approved by the board earlier this month and is expected to wrap up by the end of the year, they said. A second acquisition is currently under study and could be finalized during 1H 2024.

ICYMI: In an EGX filing (pdf) earlier this month, the board said it will disclose the identity of the company it plans to acquire once negotiations are completed. Our source said that the two parties are in the final stages of negotiation over the size and the value of the stake.

The rationale:The acquisitions would facilitate e-Finance’s entry into the retail payments market, our source said. Subsidiary e-Khales currently operates in the market as a bill payment aggregator but does not yet operate its own point-of-sale machines. The retail market is projected to grow in size to EGP 1.5 tn by 2027-2028.

SAVOLA WANTS ALFA STORES-

Savola’s Panda joins other suitors bidding for Alfa stores: Saudi grocer Panda is among three supermarket chains vying to purchase six stores from struggling retailer Alfa Market, Al Mal reports, citing sources it says have knowledge of the matter. The company, owned by Saudi food conglomerate Savola, is reported to have already reached an agreement with Alfa to take over its Maadi branch. The company is expected to sell its branches in Sheikh Zayed and Zamalek by the end of the year, according to Al Mal.

Remember: Alfa is in trouble. Mounting debts have forced the company to enter talks with competitors to sell off assets. Alfa owns nine branches in Greater Cairo, most of which are leased.

Ezdehar drops out: The local private equity firm Ezdehar has given up talks with Alfa to purchase some of its stores after failing to agree on a selling price, the source said. Ezdehar Managing Director Emad Barsoum told us in September that the firm was eyeing four Alfa stores, without disclosing their locations.

Other investors are looking to purchase the brand: A consortium of retail investors is in advanced talks with Alfa to acquire its trademark rights, banking on its 5-mn strong customer base, Al Mal’s sources said.

Tags:

Alfa Market e-finance Fintech M&A Watch retail Saudi Arabia Savola Group

DEBT WATCH

NUCA closes second EGP 15 bn securitized bond issuance of 2023

NUCA just completed its EGP 30 bn securitization program: The New Urban Communities Authority (NUCA) has closed a EGP 15 bn securitized bond issuance, the second and final issuance in a EGP 30 bn program, according to a statement (pdf) from Al Ahly Pharos, which acted as one of the financial advisors on the transaction.

About the issuance: The four-tranche issuance was backed by a receivables portfolio originated by NUCA, was composed of four tranches worth EGP 1.3 bn, EGP 3.9 bn, EGP 4.8 bn tranche, and EGP 5.0 bn. The tranches received a rating of Prime 1, AA, AA-, and A-, respectively, from the Middle East Ratings and Investors Service (MERIS).

The buyers: The issuance was subscribed to by Banque Misr, the National Bank of Egypt, Banque du Caire, CIB, Suez Canal Bank, and QNB.

Remember: NUCA in July closed the first EGP 15 bn issuance of the program, which at the time had already been the largest in Egypt so far this year and the first of the EGP 30 bn program. The issuances are the largest in Egypt in 2023, with the crown having previously been held by MNT-Halan, which closed a USD 140 mn (EGP 3 bn) transaction in February.

NUCA keeps its spot as biggest player in the securitization market: NUCA has been setting records in the securitization market in recent years, issuing a total of EGP 70 bn of securities since 2019. It set new records in 2020 with a EGP 10 bn issuance, and 2022 after closing a EGP 20 bn transaction.

Advisors: Al Ahly Pharos, CIB, and CI Capital acted as the financial advisors, transaction managers, book-runners, and arrangers. Banque Misr acted as the custodian, CIB acted as the placement agent, and Baker Tilly was the auditor of the transaction. Dreny & Partners was counsel.

**Feeling a bit lost? We recently broke down the different roles in the securitization process in an explainer.

DATA POINT- Companies have now issued around EGP 77.5 bn worth of securitized bonds so far this year, 71% more than what was taken to market in 2022.

Tags:

Al Ahly Pharos Baker Tilly Banque du Caire Banque Misr CIB debt watch Dreny & Partners National Bank of Egypt New Urban Communities Authority QNB Alahli securitization Suez Canal Bank

WAR WATCH

Egypt, Qatar + US push longer ceasefire in Gaza

Another truce extension in the works? Egypt’s intelligence chief Abbas Kamel and Qatari Prime Minister Mohamed Bin Abdul Rahman Al Thani held talks with the heads of the CIA and Mossad over the possibility of extending the ceasefire between Hamas and Israel for another three days. CIA head William Burns reportedly pushed for the next hostage swap to include men and militants, who have been excluded from previous hostage releases.

The ceasefire continued to hold for a fifth day yesterday despite the two sides trading blame for a series of explosions in northern Gaza. Day five of the prisoner exchange saw Hamas release a total of 13 hostages, while Israel freed 30 Palestinians. The four-day ceasefire was extended for an additional 48 hours yesterday and will now end on Thursday morning, thanks to a pact brokered by Egypt, Qatar, and the US.

Israel might be releasing some Palestinians — but it’s arresting even more: Israel has released 150 Palestinians since the truce entered into force but have arrested 168 in the West Bank during the same period.

The US is trying to rein in Israel ahead of its expected onslaught on south Gaza: The Biden administration is reportedly urging Israel to refrain from carpet bombing south Gaza in the manner it did in the north, and instead use more precision to target Hamas operatives. Senior US officials told the Associated Press that the administration is telling the Israelis to avoid “significant further displacement” when it resumes its military campaign in a few days.

Precision isn’t Israel’s MO: The Israeli military has been open about its aim to inflict as much destruction on Gaza as possible, with spokesperson Daniel Hagari saying early on in the conflict that “ the emphasis is on damage and not on accuracy. ” The devastating air campaign has led to the displacement of 1.7 mn of the territory’s 2.3-mn population, and forced hundreds of thousands of people to flee the north.

AID- French hospital ship docks in Egypt, prepares to start treating Gazans this week | US aid arrives | UN wants second border crossing to open to accelerate aid delivery | EU: Israel not letting enough fuel into Gaza.

The lack of aid has caused a surge in disease outbreaks. WHO has warned that more people could die from disease than from bombing in Gaza as long as the healthcare system remains unfunctional. A WHO official also pointed to the lack of clean water and sufficient sustenance to the spike in disease — Gaza currently faces a real risk of famine.

DIPLO- Turkish President Tayyip Erdogan told UN Secretary General Antonio Guterres that Israel should be tried in international courts for its war crimes in Gaza.

Tags:

DIPLOMACY Israel Israel-Palestine conflict Middle East politics Palestine war watch

LAST NIGHT’S TALK SHOWS

Egyptian talk shows cover the sugar crisis and bread subsidies

Another night with commodities driving the conversation on the airwaves. The nation’s talking heads continued their coverage of the nationwide sugar shortage, as well as news of new bread subsidies and the fast-approaching presidential election.

Sugar hoarders exposed: Ala Maso’uleety’s Ahmed Moussa took a dive into state attempts to curb the country’s spiraling sugar prices amid an apparent shortage (watch, runtime: 6:49). The Consumer Protection Agency has been carrying out supermarket inspections to crack down on sugar hoarders, which have so far found 128 traders guilty of not disclosing prices, hiking prices, hoarding products, selling foodstuffs of unknown origin, or unlicensed trading. The inspections have so far yielded over 38 tons of sugar being stockpiled in supermarket storage facilities in Alexandria and Qena.

Remember: A sugar supply gap has pushed prices to soar up to EGP 50 per kilo last week and pushed the Supply Ministry to consider introducing sugar price controls and tap into its reserves to help fill the gap. Sugar was trading at EGP 42 per kilo yesterday.

No ration card, no problem. The government will revive a year-old idea and start offering EGP 1 bread loaves for non-ration card holders using prepaid cards starting January, Abdullah Ghorab, head of the bakeries division at the Federation of Egyptian Chambers of Commerce (Fedcoc), told Kelma Akhira’s Lamees El Hadidi (watch, runtime: 8:50). There won’t be a ceiling on the number of loaves that can be bought per person, he said.

In other news- One of our go-to talk show hosts is now a KSA citizen. El Hekaya’s Amr Adib has been granted Saudi citizenship, but don’t worry it doesn’t appear that he’ll be packing his bags for the Kingdom just yet. (watch, runtime: 4:28)

Also on the airwaves last night:

It’s almost time to head to the polls: Voting is a “national duty,” Lamees El Hadidi told her viewers, two days before the polls open for Egyptian expats. (Kelma Akhira | watch, runtime: 2:55)
…and to get vaccinated: Health Ministry spokesperson Hossam Abdel Ghaffar encouraged people to get their flu jabs. (Yahduth Fi Masr | watch, runtime: 2:32)

Tags:

commodities LAST NIGHT’S TALK SHOWS

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EGYPT IN THE NEWS

Egypt is helping other African nations eliminate hepatitis C

It’s a quiet morning for Egypt in the foreign press, aside from Egypt’s efforts to help restore peace in Gaza. The one story worth noting comes from the New York Times as it looks at Egyptian efforts to help treat hepatitis C across the continent after it managed to reduce the prevalence of the virus at home to 0.4%, putting it on track to become the first country to eliminate the virus.

Meanwhile, New Arab claims that Starbucks has reportedly laid off staff in Egypt after feeling the pinch of a consumer boycott seen as supporting Israel. The story’s claim hinges on one anonymous source with no firsthand knowledge of the scale of the purported job losses.

Tags:

healthcare Starbucks

Also on our Radar

The Sokhna logistics park is coming. PLUS: Another industrial zone in the making and more green financing

LOGISTICS-

#1- DP World breaks ground on Sokhna logistics park: Emirati port operator DP World has broken ground at its USD 80 mn DP World-Sokhna Logistic Park at Sokhna Industrial Zone, according to a Suez Canal Economic Zone (SCZone) press release. The 300k square-meter project looks to provide services to local and regional logistics, commerce, and distribution sectors, bolstering supply chains and trade. The first phase of the project is slated for completion by the close of 2024 and will require USD 50 mn of investment. DP World inked the construction agreement for the investment with the SCZone in August 2022. The zone will create 600 jobs.

#2- South Korean firm to develop Gargoub industrial zone + port: South Korean trading company STX Corporation will work with the government to upgrade Gargoub port near Marsa Matrouh and establish an industrial-logistics zone in the area, the Transport Ministry said yesterday.

A big project aimed at boosting Egypt-Europe-Africa trade: Described by the ministry as “an integrated economic, industrial, development and agricultural zone,” the plan involves establishing an industrial zone, a logistics center featuring a container terminal, and an oil pipeline connecting Libyan fields to the port, as well as residential and tourist areas. The ministry didn’t disclose STX’s specific roles in the project.

INFRASTRUCTURE-

Raya to upgrade Telecom Egypt data hub capacity: Raya Holding’s IT arm Raya Information Technology will help expand the capacity of Telecom Egypt’s regional data center under a contract signed between the two companies yesterday, according to the Communications Ministry. The company will work on the second phase of the project, which will expand its capacity to 7.1 MW, the ministry said. The center is located in Smart Village and opened in 2021.

Raya is doing some heavy lifting: Raya IT will design and build new data centers and power infrastructure, in addition to supplying cooling, fire suppression, and industrial safety systems.

That’s not all: The company plans to eventually expand capacity to 16.3 MW, according to the statement.

ENERGY-

Fresh funds for green projects:The Environment Ministry has received USD 12 mn from the multilateral environmental fund Global Environment Facility (GEF) to help fund four renewable energy and green hydrogen projects, Minister Yasmine Fouad told Al Mal. The selected projects, which were picked by the GEF from 44 proposals submitted by the government, will be announced soon.

AVIATION-

More flights between Egypt and the UAE: Hungarian airline Wizz Air is planning to offer daily flights between Giza’s Sphinx International Airport and Abu Dhabi, according to Al Mal. The budget carrier currently operates four flights a week between the two cities.

PHARMA-

Rameda is out with a new diabetes med: Rameda Pharma has launched a new type 2 diabetes med called Gliptalina, it said in a press release (pdf) yesterday. It is expected to generate more than EGP 20 mn in revenues for the company in the first year.

Tags:

ALSO ON OUR RADAR aviation Data Centers DP World energy infrastructure logistics pharma ports Rameda Pharma Raya Holding Suez Canal Economic Zone Telecom Egypt tourism transport Wizz Air

PLANET FINANCE

Greenback slips to three-month lows as market bets in Fed rate cuts

Investors are ditching the greenback: The USD fell to three-month lows yesterday, putting it on track for its worst monthly performance in a year, after Federal Reserve Governor Christopher Waller hinted at the possibility of rate cuts in the coming months, the Financial Times wrote. The USD index — which tracks the greenback against a basket of currencies — dipped to its lowest since mid-August yesterday, and has lost 3.6% this month in a sign that financial conditions are easing.

What he said: “I am increasingly confident that policy is currently well positioned to slow the economy and get inflation back to 2%, Waller — a hawkish member of the Fed board — said yesterday. If inflation continues to decline for “several more months … we could start lowering the policy rate.”

US treasuries gained ground: Yields on US government debt fell to two-month lows following Waller’s comments. The rate on the 10-year bond slipped further to 4.35%, and has now fallen from above 5% in just five weeks.

A cause for celebration in our neck of the woods: A weakening greenback is good news for countries with USD-denominated debts or for those heavily dependent on imports, like Egypt. A weaker USD makes it cheaper to service USD debt and to pay for imports.

Rain on our parade: Another Fed governor, Michelle Bowman, still believes that further hikes may be in the cards to bring inflation down “in a timely way.” She warned against “prematurely declaring victory in the fight against inflation.”

ALSO WORTH NOTING-

Gulf states look ‘very, very attractive’ to Ray Dalio: Bn’aire hedge fund investor Ray Dalio, founder of the world’s largest hedge fund Bridgewater Associates and recent subject of a negative take in a high-profile biography that suggests his secret sauce wasn’t a method, but his whim, emphasized the GCC’s fast-emerging appeal to global investors amid a changing world order. (CNBC)

EGX30	25,122	-3.0% (YTD: +72.1%)
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	11,101	+0.2% (YTD: +5.9%)
ADX	9,541	+0.3% (YTD: -6.6%)
DFM	4,009	+0.4% (YTD: +20.2%)
S&P 500	4,555	+0.1% (YTD: +18.6%)
FTSE 100	7,455	-0.1% (YTD: +0.1%)
Euro Stoxx 50	4,348	-0.2% (YTD: +14.6%)
Brent crude	USD 81.66	+2.1%
Natural gas (Nymex)	USD 2.71	-3.2%
Gold	USD 2,060	+1.3%
BTC	USD 37,979	+2.5% (YTD: +131.2%)

THE CLOSING BELL-

The EGX30 fell 3.0% at yesterday’s close on turnover of EGP 5.2 bn (81.7% above the 90-day average). Regional investors were net buyers. The index is up 72.1% YTD.

In the green: Orascom Construction (+3.1%), Edita (+0.9%) and Palm Hills Development (+0.3%).

In the red: Credit Agricole (-5.8%), CIB (-4.8%) and Eastern Company (-4.4%).

It is looking like another mixed session for Asian markets in early trading this morning with indices split between gains and losses. Futures suggest a mixed open in Europe later this morning, while major US benchmarks are likely to rise at the opening bell.

Tags:

currencies Federal Reserve Financial Markets interest rates Planet Finance

HARDHAT

Amendments to the Building Reconciliation Act will soon be the law of the land. Here’s what to expect.

Everything you need to know about the new building reconciliation act: The Madbouly government’s new building reconciliation bill received final approval from the House of Representatives last week. The long-awaited law is set to make it easier for owners of unauthorized buildings built by 15 October of this year to legalize their properties in return for paying a reconciliation fee, and to set a clear procedure for the process. We have the rundown on everything you need to know about the amendments, as well as positive reactions from the industry, below.

Why were the amendments made in the first place? The law replaces a bill from 2019 that did not specify procedures for how local authorities would collect fees, leading to a backlog of unresponded reconciliation requests and unpaid fines.

The highlights:

We now have a standardized practice for collecting reconciliation fees, including measures like installment plans and reductions to help ease the process;
Buildings that lie outside of the scope of the law will be evaluated on a case-by-case basis;
Prime Minister Moustafa Madbouly now has the right to extend the period for reconciliation requests for another three years;
And there’s less red tape — especially for bigger buildings.

First thing’s first: Good news for buildings lying outside of the scope of the law. The government will accept reconciliation requests for buildings outside of the scope of its law and assess them on a case-by-case basis, according to a document detailing the law seen by Enterprise. Prime Minister Moustafa Madbouly was also handed the authority to establish committees to assess these cases, the document said. This includes buildings that defy regulatory requirements, like height, as well as buildings located outside of residential areas, according to the document. The one condition is for buildings in remote areas to be connected to utilities, with other conditions to be identified in the executive regulations, the document adds.

And for old reconciliation requests: The government will revisit all previously rejected requests made under the previous version of the act, the document said.

The committees will be tasked with ensuring the process is not stalling and that any challenges that arise are immediately addressed, Mohamed Al Fayoumi, the head of the House’s housing committee, told Enterprise.

There’s also good news for unfinished buildings looking for approvals: The law allows buildings that are still in their construction phase to resume construction until they receive their approvals, provided that a committee conducts a routine inspection to ensure the building is safe, according to the document.

Larger buildings get less red tape: Buildings built over a piece of land wider than 200 square meters will be exempt from having to submit a report from a consultant or an engineer, and will need only to submit the blueprint for the building, according to the document.

The good news for residents: The law sets a range of EGP 50-2.5k per square meter for reconciliation fees, according to the document. While residents are required to pay 25% of the fee upfront, they are now handed more lenient terms like three-year, zero-interest installment plans, and can also get reductions of up to 25% for people who pay the full amount upfront, the document said.

The gov’t will get bns of EGP in return: The government is expecting to rake in some EGP 100 bn in reconciliation fees, EGP 22 bn of which have already been collected, MP Ihab Mansour told us.

There are still some details to iron out: The executive regulations for the law are being drafted and should be out within two weeks, Al Fayoumi told us. The government is fine-tuning some details regarding buildings in violation of the law and buildings in governorates outside of Cairo, the sources told us. The regulations will be out once the act is ratified into law.

This is all good news for our real estate sector: The resumption of reconciliation processes in line with the new amendments will help speed up the process of issuing building permits, which have been stalling until the new amendments are drafted and brought into effect, Al Fayoumi said. The law will also help unify standards of building, which will give more impetus to the sector, a member of the Egyptian Real Estate Council, told us. It also helps address the problem of encroachment on agricultural land, El Degwy added.

Your top infrastructure stories for the week:

Egypt cements its name as a leading global outsourcer. Egypt came in third on Ryan Strategic Advisory’s Offshore BPO (business process outsourcing) Confidence Index for 2023.
Megamind eyes EGP 4 bn investment in healthcare automation: Saudi-based IT services and consulting firm Megamind is in talks to implement a EGP 4 bn project aimed at automating Egypt’s healthcare sector.
Cabinet approved allocating a 10k sq km land plot in the New Valley governorate and a 46.7 sq km plot in Benban to the New and Renewable Energy Authority (NREA)to build renewable energy stations.

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CALENDAR

NOVEMBER

30 November (Thursday): OPEC+ Ministerial Meeting takes place virtually.

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

DECEMBER

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.

14 December (Thursday): Bidding deadline for five gold mine concessions in the Eastern Desert.

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 stake sale for military-owned fuel retailer Wataniya.
Gov’t expects to finalize sale of Zafarana wind farm
FRA to announce chosen consortium for credit rating license
Kenyan trade conference in Egypt.

EVENTS WITH NO SET DATE

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

EVENTS WITH NO SET DATE

The Grand Egyptian Museum could be officially open to visitors some time between February and May 2024 .

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

JANUARY

1 January (Monday): Egypt to join the Brics.

7 January (Sunday): Coptic Christmas.

17 January (Wednesday): A delegation of Egyptian companies to visit Istanbul.

25 January (Thursday): Revolution day.

FEBRUARY

11 February (Sunday): The deadline to apply for the Chicago Booth Executive Program

APRIL

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).

5 May (Sunday): Coptic Easter.

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

29 May (Wednesday): Chicago Booth Executive Program

JUNE

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

30 June (Sunday): June 30 Revolution Day.

JULY

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

23 July (Tuesday): Revolution Day.

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.

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