Language
العربية

Sections

About

Privacy & Support

Get EnterpriseAM daily

Available in your choice of English or Arabic

Tuesday, 17 Oct 2023

What We're Tracking Today
War Watch
Debt Watch
Debt Watch
Enterprise Finance Forum
Legislation Watch
Last Night’s Talk Shows
Also On Our Radar
Planet Finance
Going Green
Calendar

Egypt closes maiden panda bond issuance + El Sisi, Biden to talk Gaza in Jordan tomorrow

An independent publication supported by

Opening up a world of opportunity

Realize More

Live More

Powering with nature

Driving growth

Today at a glance

1

DEBT WATCH

Egypt closes maiden CNY 3.5 bn panda bond issuance.
2

WAR WATCH

El Sisi, Biden to meet tomorrow in Jordan. PLUS: Is the Rafah crossing opening to aid?
3

What We're Tracking Today

Egypt’s summit of world leaders on Gaza to take place this Saturday.
4

What We're Tracking Today

S&P Global will review our credit rating this Friday.
5

DEBT WATCH

Four banks could receive EBRD loans to fund SMEs, green projects
6

LEGISLATION WATCH

Foreign investors can become importers + expat car import program gets extension.
7

Also on our Radar

Alfa eyes stakes in three Cairo hospitals.
8

What We're Tracking Today

Madbouly in Beijing for Belt and Road forum.
9

ENTERPRISE FINANCE FORUM

How professional services help investors navigate a turbulent market.
10

Going Green

Egypt’s first locally produced EV is a low-range, low-speed commuter set to launch in 2024.

Tuesday, 17 Oct 2023

What We're Tracking Today
War Watch
Debt Watch
Debt Watch
Enterprise Finance Forum
Legislation Watch
Last Night’s Talk Shows
Also On Our Radar
Planet Finance
Going Green
Calendar
1

What We're Tracking Today

El Sisi, Biden to meet in Jordan Wednesday ahead of Egypt’s Gaza summit

Good morning, friends, and welcome to another exceptionally busy news day.

THE BIG STORY here at home, the region, and the world at large continues to be the war in Gaza. We have the full rundown for you in this morning’s War Watch, below, but the key things to know:

  • Biden and El Sisi will meet in Jordan tomorrow, after the US leader stops in Israel to show “unwavering support”;
  • Aid convoys were moving toward the Rafah crossing at dispatch time, but there is no confirmation on when (or if) Israel will allow the border to open today;
  • Israel has yet to launch a ground offensive;
  • There are (early) signs Hamas may be considering releasing some of its hostages in a bid to ease tensions.

Egypt’s Gaza summit will take place on 21 October — and the invite list includes global and regional powers. Egypt is inviting world leaders to the new capital on 21 October to attend the summit announced Sunday that will discuss the “developments and future of the Palestinian issue.” State broadcaster Al Qahera News said yesterday that a large number of regional and international leaders are expected to attend the event, which is being called the Cairo Peace Summit (watch, runtime: 0:51).

On the guest list?Sky News Arabia reported yesterday that leaders of Arab nations and the members of the UN Security Council (China, France, Russia, UK and the US) will be invited, citing senior Egyptian officials. Separately, Asharq Business reported that Saudi Arabia, the UAE, Kuwait, Jordan, Qatar, and the Palestinian Authority have all received invites. Qatar and Kuwait have both confirmed that they’ve received invites. The news outlet also said that the US and French presidents are expected to attend.

Western countries are yet to publicly accept: US Secretary of State Antony Blinken and French Foreign Minister Catherine Colonna have both publicly welcomed the summit but stopped short of confirming attendance. German Chancellor Olaf Scholz yesterday declined to say whether he would attend when asked at a presser yesterday.

AND- Speaking of Scholz — he’s coming to Egypt: The chancellor confirmed yesterday that he will head to Egypt and Israel this week following reports from Reuters and DeutschePresse-Agentur had reported earlier that he would visit both countries on Tuesday. Scholz didn’t provide a timeframe. The visit comes following talks with the leaders of Jordan and Qatar in Berlin. German foreign minister Annalena Baerbock was in Egypt and Israel last week.

It’s fair to say that the two countries aren’t on the same page over the conflict: While Egypt has been calling for an immediate ceasefire and the entrance of humanitarian aid into Gaza, Berlin has backed Israel’s attack on Gaza, pledged to supply it with military aid, and cracked down on pro-Palestinian protests.

Another warning from Tehran: Iran’s foreign minister Hossen Amir Abdollahian yesterdaywarned that “pre-emptive” action against Israel could take place “in the coming hours” if it keeps up its assault on Gaza. Earlier he suggested that a widening of the conflict was becoming “inevitable.”

THE FRONT PAGES- The conflict continues to everywhere on the front pages this morning:

  • Biden will head to Israel and Jordan as concerns mount that Israel-Hamas conflict will spread (AP)
  • Biden to visit Israel on Wednesday; Iran issues warning (Reuters)
  • Joe Biden set to visit Israel as push to open Gaza crossing falters (Financial Times)
  • Biden to visit Israel as rocket attacks continue and Gaza crisis grows (BBC)

ALSO HAPPENING THIS WEEK-

#1- The Belt and Road Forum starts today:Prime Minister Moustafa Madbouly is in Beijing to attend the two-day Belt and Road Forum, a gathering aimed at coordinating the development of China’s ambitious Belt and Road Initiative. Representatives of more than 130 countries are expected to attend the event, which marks the 10-year anniversary of the multi-tn USD global infrastructure investment strategy aimed at deepening China’s trade ties with the world and expanding its economic influence.

Egypt has signed several agreements already:Egyptian aviation companies signed three framework agreements with China’s largest construction company to upgrade two of the country’s airports, the cabinet said yesterday. Under the agreements, the China State Construction Engineering Corporation will construct a new passenger terminal at Hurghada Airport and the two would develop Cairo International Airport including by building a new hangar.

Making its debut at the forum: The Taliban, which since its return to power in Kabul in 2021 has been trying to build economic ties with Beijing, according to Reuters. Afghanistan, which has potentially tns of USD of untapped mineral wealth, is looking to attract “large investors” into the country during the forum, a commerce ministry spokesperson.

#2- S&P is next up to review our credit rating: S&P Global Ratings will publish its review of our sovereign credit rating on Friday. Moody’s downgraded its rating for Egypt to Caa1 from B3 earlier this month due to worsening debt affordability and the FX crunch.

And Fitch makes three: The last of the big three agencies will be out with its review on 3 November.

#3- The deadline is ticking for Dar Venture’s DarE incubator applications: Submissions for the DarE Incubator program by Dar Al-Handasah’s venture capital arm Dar Ventures will come to end this Friday. The six-month program is set to accelerate the growth of promising tech startups from the region.

WATCH THIS SPACE-

#1- Eastern stake sale to wrap up soon? State-owned tobacco manufacturer Eastern Company’s parent company Chemical Industries Holding Company (CIHC) will finalize the USD 150 mn sale of a 30% stake in the company to UAE-based Global Investment Holding (GIH) by the end of October, Al Mal reported yesterday. However, a government source reportedly told Asharq Business in a story published the same day that the sale will go through by the end of the week following the approval of the House of Representatives.

Where’s the money going? The government reportedly plans to build a new fertilizers factory as well as to develop a number of state-owned fertilizer plants, according to Asharq Business. These include the factories of Delta Fertilizers, El Nasr for Fertilizers and Chemical Industries (Semadco), and Egyptian Chemical Industries (Kima), Asharq’s sources said.

#2- Could oil hit the EMX? The Egyptian Mercantile Exchange (EMX) is ready to list oil products on its electronic trading platform, EMX chair Ibrahim Ashmawy said yesterday, during a meeting with Oil Minister Tarek El Molla and EGX chair Ahmed El Sheikh, an EGX statement read. The statement did not give a timeline for when we could expect to see oil products on the exchange.

CORRECTION- We slipped up on our subsea cable story in yesterday’s issue: Our coverage yesterday said that Jordan and Egypt had scaled back their initial planned upgrade to our electricity link between the countries to 1.1 GW for the time being due to economic headwinds. Instead, they are studying channeling 1.1 GW of a total 2.2 GW link through a subsea cable as a cheaper alternative to on-land cables, according to a government source that spoke with Enterprise.

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

*** It’s Going Green day — your weekly briefing of all things green in Egypt: Enterprise’s green economy vertical focuses each Tuesday on the business of renewable energy and sustainable practices in Egypt, everything from solar and wind energy through to water, waste management, sustainable building practices and how you can make your business greener, whatever the sector.

In today’s issue: Egypt’s first locally produced EV — a low-range, low-speed commuter for urban areas — is almost ready for launch.

Tags:

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

2

WAR WATCH

El Sisi, Biden to meet tomorrow in Jordan. PLUS: Is the Rafah crossing opening to aid?

Joe Biden is heading to Israel, Jordan as the IDF prepares an invasion of Gaza:President Abdel Fattah El Sisi will meet his US counterpart in Amman tomorrow as global leaders try to find a way to get aid into Gaza and prevent the conflict from spilling over into a regional war. The two leaders will be joined by Jordan’s King Abdullah and Palestinian Authority President Mahmoud Abbas on Wednesday, the White House said yesterday.

The statement came in the wake of a phone conversation between El Sisi and Biden last night, during which the two leaders discussed the deteriorating humanitarian situation in Gaza and agreed on the need to protect civilians, according to readouts from Ittihadiya and the White House. The two agreed on the importance of containing the war, according to Ittihadiya, but neither statement raised the possibility of a ceasefire.

WILL THE RAFAH CROSSING OPEN TODAY?

Maybe? An unconfirmed report from Al Arabiya says the border crossing will open at 9am CLT, State broadcaster Al Qahera News reported this morning that aid trucks had begun to move from Al Arish towards Rafah, and CNN says that aid convoys in Egypt are moving toward the border. Neither broadcaster has said when the border might open. A UN spokesperson denied an earlier report overnight by CNN that five fuel trucks had crossed. More than 100 vehicles were waiting to enter Gaza this morning, according to Al Arabiya.

Reports early yesterday morning had suggested the crossing could open Monday, but the gates remained shut all day. Egypt has refused to allow citizens of western countries to evacuate until Israel and the US agree to allow aid in. It has also strongly rejected suggestions from Israeli politicians that it agree to resettle hundreds of thousands of Palestinian refugees in the Sinai. Foreign Minister Sameh Shoukry blamed Israel yesterday for not agreeing to let aid in

There are signs that US pressure on Israel to ease the siege could be working: Israeli Prime Minister Benjamin Netanyahu has agreed to “develop a plan” with the US to allow aid into Gaza without helping Hamas, Blinken said early this morning following nine hours of negotiations, according to Reuters. Blinken was in Israel for the second time in less than a week after failing to secure an agreement to open the Rafah border crossing to foreign national and aid deliveries during talks with El Sisi on Sunday.

Remember: Israel has imposed a total blockade on Gaza for over a week and is refusing to allow food, water, fuel and aid to enter, triggering what the UN has termed a “humanitarian catastrophe.”

BIDEN’S VISIT IN CONTEXT-

He’s trying to dial down tensions with the Arab world… Following a visit to Israel, Biden “will reiterate that Hamas does not stand for the Palestinian people’s right to dignity and self-determination and discuss the humanitarian needs of civilians in Gaza” during his conversation with the Arab leaders, the statement said. Ittihadiya has not confirmed El Sisi’s travel plans.

…but the trip is all about showing “unwavering support for Israel,” the New York Times quotes Secretary of State Antony Blinken as having said. The report did note that Biden will address with Israeli leaders both hostages held by Hamas and “humanitarian aid to Palestinians in Gaza.” The US president has been a strong backer of Israel’s military operation and yesterday called for the Islamist group to be eliminated.

STILL NO GROUND INVASION-

Yesterday saw more extreme rhetoric from Israeli leaders, but the thousands of troops massed on the Gaza border remained in place ahead of a much-telegraphed invasion. Israel will “wipe out” the “bloodthirsty monsters,” Netanyahu told minister s in his emergency cabinet yesterday, though held off on sending in the army.

There’s plenty of speculation about why Israel is continuing to hold off the offensive, ranging from fears of a Hezbollah attack from the north to bad weather. There are op-eds aplenty warning Israel of the dangers of an invasion from media outlets inside and outside the country as well as from the heart of foreign policy-making in Washington.

The death toll: The number of Palestinians killed in Israel’s attack continued to climb yesterday following what witnesses said was one of the most intense nights of bombing in the 10-day war. Almost 2.8k people have now died in Gaza and more than 9.9k are wounded, the Palestinian Health Ministry said last night.

DIPLOMACY-

Progress in the hostage situation? Iran, one of Hamas’ chief backers, said yesterday that the group is willing to release the nearly 200 hostages if Israel agrees to end its bombing campaign. Hamas has “stated that they are ready to take necessary measures to release the citizens and civilians held by resistance groups, but their point was that such measures require preparations that are impossible under daily bombardment by the Zionists against various parts of Gaza,” the country’s foreign ministry spokesperson Nasser Kanaani said.

Some hostages to be released? Non-Israeli captives will be released “when circumstances allow,” Reuters reported Hamas as saying yesterday, soon after one of its senior figures suggested that it could agree to a prisoner exchange with Israel.

Putin is weighing in on the conflict: Among the leaders El Sisi spoke to yesterday was Russian president Vladimir Putin, who engaged in a day of rapid-fire diplomacy after remaining on the sidelines for much of the 10-day conflict. Putin — who has joined with Chinese officials to criticize Israel’s military campaign and explicitly back a Palestinian state — had phone conversations with Netanyahu and the presidents of Iran, Syria and Palestine.

Putin x El Sisi x Netanyahu: El Sisi and Putin both emphasized the importance of the Palestinians being allowed their own state and agreed on the urgent need for aid to be let into Gaza, according to readouts from Ittihadiya and the Kremlin. In a separate conversation with Netanyahu, the Russian president offered to mediate an end to the conflict, while the Israeli prime minister said that Israel won’t end its attack against Hamas until it’s destroyed.

ALSO-

  • El Sisi also held talks with French Foreign Minister Catherine Colonna in Cairo yesterday and spoke on the phone with the prime ministers of Canada and Italy.
  • Shoukry spoke with his counterparts from China and Syria.
Tags:
3

DEBT WATCH

Egypt closes maiden CNY 3.5 bn panda bond issuance

Egypt closed its maiden panda bond issuance in China yesterday with a CNY 3.5 bn (USD 478.7 mn) issuance, the Finance Ministry said in a statement. The three-year securities were priced at a 3.51% annual rate, lower than the yield on USD-denominated debt, Minister Mohamed Maait said. The issuance attracted “many” Chinese investors, he added, saying the proceeds will be used to meet the country’s sustainable development goals.

Accessing capital markets: “The issuance attracted high-quality onshore investors and allowed access to capital markets despite the recent volatility in global markets and widening of Egypt’s credit spreads,” Vice Minister of Finance Ahmed Kouchouk told Enterprise.

All for a green cause: The proceeds will be used to fund sustainable projects across a number of sectors including clean transport, healthcare, sustainable water use, renewable energy, affordable housing, and digital infrastructure as well as biodiversity conservation, Kouchouk told us. Egypt is the first African country to issue a guaranteed Panda sustainable bond.

International backing: The African Development Bank and Asian Infrastructure InvestmentBank provided guarantees for the issuance, a development Kouchouk said could “pave the way for other issuers, especially sovereigns in Africa, to access RMB-denominated financing and China’s interbank bond market.”

Remember: The inaugural issuance has been in the works since 2019, but was put on hold due to the pandemic. The ministry’s debt management recently brought the transaction back on the fast track for execution.

Reducing reliance on the greenback: The ministry hopes that the CNY can become “an important and significant part of Egypt's basket of currencies” and that yesterday’s transaction will pave the way for further bilateral investment and sustainable financing between the two countries, Kouchouk said.

Tip of the hat to China: “It was a real honor to have worked with our Chinese partners in such a short timeframe to deliver a successful transaction,” Kouchouk said. “Our Chinese partners showed us nothing but the greatest support and cooperation.”

BACKGROUND- Tightening global financial conditions, rising borrowing costs, and with concerns in some quarters about our debt levels have effectively shut us out of Western capital markets. The ministry is planning to close a USD 500 mn issuance of JPY-denominated samurai bonds in the coming weeks, and raised USD 1.5 bn from its first-ever sovereign sukuk issuance in February.

Tags:
4

DEBT WATCH

Four Egyptian banks could receive EBRD loans to fund SMEs, green projects

The European Bank for Reconstruction and Development (EBRD) is considering lending USD 325 mn to four local banks for on-lending to local SMEs and green projects, the bank’s head of institutional funding Hashem Abdel Hakim reportedly told AsharqBusiness. If the plan goes through, the four banks are set to receive the funds before the end of 2023, Abdel Hakim told the news outlet.

Caveat: Nothing is set in stone. An EBRD rep we spoke with confirmed the facilities are being discussed, but said the bank is yet to sign off on anything. It is also not clear if this is an extension of the USD 175.5 mn announced in January by the EBRD for SMEs and green projects or an additional upcoming project.

Under the plans:

  • Our friends at CIB would receive USD 150 mn for on-lending to SMEs and environmental projects;
  • The National Bank of Egypt will receive USD 100 mnfor SME lending. The International Cooperation Ministry said earlier this year that the EBRD would provide a USD 400 mn loan to the state-owned lender;
  • Banque du Caire will also back SME projects with a USD 50 mnEBRD loan;
  • The Export Development Bank (EBank) will receive a USD 25 mn loan to provide FX liquidity to importers.

It’s not just the EBRD: The IFC said this week that it would lend USD 234 mn to Banque Misr to finance MSMEs and women-led businesses.

Tags:
5

ENTERPRISE FINANCE FORUM

Where do lawyers stand in this volatile market?

How professional services help investors navigate a turbulent market: Legal professionals are usually the first point of contact for local and international investors exploring the market, providing assurance and professional services for clients when navigating Egypt’s financial climate and regulatory challenges.

We brought together a panel to explore the legal perspective on Egypt’s investment climate during the second day of the Enterprise Finance Forum.Joining us were Kamel Saleh, managing partner at Saleh, Barsoum & Abdel Aziz; Lamyaa Gadelhak, partner at Baker McKenzie; and Said Hanafi, partner at MHR & Partners in association with White & Case. The session was co-moderated by Bahaa Alieldean, senior and managing partner at Alieldean Weshahi & Partners.

Uncertain times? It’s nothing we haven’t seen before: “When clients come to us, they are more concerned about the uncertainty than we are. We’ve seen the ups and downs, and we know how the recovery can happen and how things can turn around,” Saleh said. “The fundamentals are there for the economy, so our role as advisors in general is to give a calming message that this volatility or this uncertainty is not the end of the world.”

But there’s still room for growth: Investors have negative views about the Egyptian tax system and tax policy, Saleh added, pointing to the need for tax reforms, namely ones “rooted in communication and addressing issues quickly which would reduce one of the biggest impediments to investors.”

A crisis isn’t always bad: “We’ve faced a decade of different sorts of challenges which led us to build up resilience and we have seen clients also build resilience … the trick is being creative and resourceful,” Gadelhak said.

Why are startups leaving the country? “Egypt produces a lot of startup ideas … but when it comes to raising capital, the venture capitalists and investors advise them to leave Egypt and start setting up outside Egypt,” Saleh said. Startups are advised to “keep the operations in Egypt but have their holding company outside Egypt, where funds are raised and where further investments happen.”

“This is really a regulatory issue in the first place,” Saleh said. “We have the ideas, the talent pool, and the economy that supports and makes all these startups successful, so why do they leave in search for a better ecosystem? … From a corporate law point of view, all the arrangements and the shareholder agreements are better regulated and easily enforced outside Egypt,” he added.

More support needed: “It is important that [the regulations hindering startups] be looked into very seriously,” Gadelhak said. “The green industry, for example, needs to be centralized from a regulatory and institutional perspective in order to avoid any conflict of interest. There needs to be a coherent strategy to which all relevant stakeholders abide by whether or not it benefits them on an individual basis,” she added.

“I’m actually calling for deregulation completely,” Hanafi said, calling for the removal of all legislations that exist in freezones. He pointed to Saudi Arabia and the efforts being done there “creating this whole concept of economic zones that is completely detached from the base economy.”

Is there a silver lining to this crisis?The silver lining to these difficult times is that Egyptian companies are looking to expand abroad, Hanafi said. “Because of what’s happening they are trying to open up new markets. Investors are looking into Africa — and we were not competing in Africa like we should have been.”

Brain drain is an issue, but there’s a solution: “Every time there’s devaluation, there’s a brain drain and people leave the country,” Saleh said, explaining that firms accept it’s part of the business. “We hire large numbers of people and invest in their training because we know that the turnover rate will be high,” after which they will have the choice between working locally or exporting their professional services to a different market.

But it’s not all bad: Even if the employees eventually leave due to competitive compensation in the Gulf, it ultimately comes back full circle when they return as clients, Saleh added. “Every organization boils down to the people and we expose them to other markets to help fulfill a certain intellectual challenge,” Gadelhak said.

Tags:
6

LEGISLATION WATCH

Foreign investors can become importers in Egypt + expat car import program gets extension

The House of Representatives yesterday gave final approval to a trio of bills, including changes to the importers registry that will allow foreign investors to become importers, an extension for the expat car-for-FX initiative, and the rights to develop and manage the Safaga Port, and several other agreements. Below is a breakdown of the bills that got the thumbs up:

#1- Foreign investors can now become importers (with caveats): MPs voted in favor of allowing non-Egyptian investors to become registered importers for a ten-year period that could be renewed once. The law will also allow them to hold stakes of up to 49% in trading companies that import into Egypt. This includes limited liability companies, joint stock companies, and sole proprietorships. The bill is part of the 22 measures drawn up by the Supreme Investment Council in May to help attract more foreign direct investment into the country.

#2- Extension of car import scheme: The House approved a bill that would let Prime Minister Madbouly extend the expat car-for-FX initiative for three months. The program would allow Egyptians living abroad to import cars tax-free on the condition that they deposit the equivalent of saved duties and taxes in a five-year FX certificate of deposit. The second iteration of the program is expected to generate USD 1.1 bn in hard currency receipts, Parliamentary Affairs Minister Alaaeddin Fouad said at the session. That’s a bit more than the top end of the USD 450 mn to USD 1 bn range on which a senior official guided us earlier this week.

A hard-won yes: The bill ran into loud opposition from MPs, including from House Economic Committee chair Mohamed Soliman, who voiced doubt about the extension generating sufficient FX revenues. “We will approve this bill only to not embarrass the Finance Ministry, which had previously claimed it would generate USD 2.5 bn,” said Soliman.

Remember: The first round of the scheme, which wrapped up in May raised around USD 900mn — a little over a third of the USD 2.5 bn targeted by the Finance Ministry.

#3- Development of the Safaga Port: The draft bill will hand an Abu Dhabi Ports-ledconsortium with Golden Anchor Ships Operator and Silver Anchor Facilities Management the right through its Safaga Stations Operating Company to develop, build, manage, and operate the Safaga Port for thirty years.

What’s next? The three bills will now be sent to President Abdel Fattah El-Sisi to be ratified into law. The House has also adjourned sessions until Sunday, 29 October.

ALSO APPROVED BY THE HOUSE-

AfDB capital increase: A presidential decree was approved to increase Egypt's contribution to the paid-up capital of the African Development Bank (AfDB). The Madbouly government will purchase 19.7k shares from AfDB for USD 16.8 mn in two installments.

Financing for Takaful and Karama: A USD 500 mn loan from theWorld Bank toexpand the Takaful and Karama program was given the green light.

Vienna pact on traffic signals: The House approved the Vienna Conventions of 1968 to adopt a unified international system of traffic signals and road standards to help us become a regional logistics hub.

Tags:

7

LAST NIGHT’S TALK SHOWS

Gaza continues to dominate the nation’s talk shows for the ninth day

The war in Gaza dominated the nation’s talk shows for the ninth straight night, with presenters focusing on aid stranded at the Rafah crossing. The crossing was hit with airstrikes yesterday for the fourth time.

“More than 1 mn citizens in Gaza are homeless,” following the destruction of over 5k residential buildings and 14 hospitals, the Palestinian Ambassador to Cairo Diab Al Louh told Fi Al Masa’ Ma’ Qaswa’ (watch, runtime: 7:57). Palestinian National Initiative Secretary-General Mustafa Barghouti told Kelma Akhira that Israel is engaging in ethnic cleansing in Gaza. He also detailed the reasons for the delay in Israel’s ground invasion into Gaza (watch, runtime: 11:27).

The Gaza side of the Rafah crossing has been hit again by Israeli airstrikes,El Hekaya said (watch, runtime: 22:24). Senior Red Crescent official Raed Abdel Nasser told Kelma Akhira that the airstrike was designed to obstruct the delivery of aid to Gaza (watch, runtime: 5:25). The news also received coverage from Ala Masouleety (watch, runtime: 4:16 | 4:39).

Osama Kamal addressed US President Joe Biden’s comments that occupying Gaza “would be a grave mistake” on Masaa DMC (watch, runtime: 2:31).

Egypt is monitoring the readiness of our health facilities to receive wounded, injured, saysHealth Ministry spokesperson Hossam Abdel Ghaffar, who appeared on several shows including Salet El Tahrir (watch, runtime: 4:02) and Masaa DMC (watch, runtime: 5:20).

A truce looks unlikely, but Lamees El Hadidi predicted that there could be a breakthrough allowing aid to enter into Gaza after President Abdel Fattah El Sisi received a phone call from US President Joe Biden last night. She added that Russian President Vladimir Putin could intervene and support a de-escalation of the conflict (watch, runtime: 00:43 | 5:13). Al Hayah Al Youm gave coverage to the upcoming summit to be held in Cairo this Saturday, to address the ongoing conflict (watch, runtime: 8:25).

Also on the airwaves last night:

  • Food price controls: The government and private sector initiative to reduce the prices of basic food commodities will take between a week and 10 days to roll out, head of the Federation of Egyptian Industries’ food division Ashraf El Gazayerli told El Hekaya (watch, runtime: 5:10).
  • Suez Canal revenues will rise 30% this year to reach USD 10.3 bn, supported by the Suez Canal Authority’s flexible marketing policy, the authority’s head Osama Rabie said last night on Masaa DMC (watch, runtime: 5:49) and Al Hayah Al Youm (watch, runtime: 4:28).
  • EGX30 reaches record high: The Egyptian stock exchange’s EGX30 hit over 21k points — its highest level in six months — receiving coverage from Masaa DMC, which spent time looking into the reasons for its rise. (watch, runtime: 5:04)
Tags:

This publication is proudly sponsored by

8

Also on our Radar

Alfa eyes stakes in three Cairo hospitals. PLUS: Gold news from Aton and Naguib

M&A WATCH-

Alfa Medical eyes stakes in three Cairo hospitals:Alfa Medical Group (AMG) — the group behind Alfa Labs — is currently looking to acquire stakes in as many as three Cairo-based hospitals before the end of 2023 as part of an expansion plan, Al Mal reports, citing sources it says have knowledge of the matter. The local media outlet did not disclose the names of the hospitals or the size of the stakes.

AMG has a lot of investments in the pipeline? AMG is currently building two hospitals and the Alfa Medical City in Sheikh Zayed to add to its existing portfolio of 170 pathology centers, 6 radiology centers and a hospital, according to the company’s LinkedIn. In 2021, the group announced plans to invest some EGP 5 bn in the local market through 2026.

MINING-

#1- Aton strikes gold: Egypt-focused Canadian gold miner Aton Resources identified opportunities for mining moderate and high grade gold at the Semna prospect in its Abu Marwat concession in the Eastern Desert, the company announced in its first results release (pdf). “The drilling has indicated that the high grade orogenic style gold mineralisation at Semna continues at depth beneath the old mine stopes, and is also open along strike,” Aton’s interim CEO Tonno Vahk said in the release, adding “these results further indicate the potential of the Abu Marwat Concession to host multiple deposits with a variety of mineralisation styles.”

Aton wants to further its gold mining operations: The Canadian firm wants to obtain a mining license to develop its gold mines at its Abu Marwat concession, Al Borsa reports, and has submitted a request to the Egyptian Mineral Resources Authority detailing its commercial discoveries at the concession.

#2- Naguib Sawiris mulls stake in Pakistani gold mine: Egyptian telecom and real estate bn’aire Naguib Sawiris indicated his interest in investing in the USD 7 bn Reko Diq gold and copper mine in Pakistan, reports Bloomberg. Sawiris, who is no stranger to the gold mining industry, added “I have an advantage compared to other investors. I know the country, I have friends here.”

What we know and what we don’t: The mine is one of the largest undeveloped gold and copper mines in the world, but international companies have been reluctant to get involved on the back of security concerns, the news outlet reported. It is 50% owned by Canada’s Barrick Gold and the remaining 50% is owned by Pakistani state companies and institutions.Sawiris did not elaborate on the size of any future stake purchase or who he would buy it from.

Sawiris is no stranger to Pakistan: The Sawiris-owned Ora Developers also has a presence in the South Asian country and is currently building a luxury housing development. Pakistan, like many other developing nations, also had their first mobile telephone network set up by the Egyptian businessman.

Tags:
9

PLANET FINANCE

What happened to the “year of the bond” in the US?

2023 dubbed a “humbling year” for the US bond market, following initial optimism: Previously given the tagline “the year of the bond” by Wall Street investors, 2023 has turned into one of the toughest years ever for the market, with investors experiencing unprecedented losses due to interest rate fears, Bloomberg reports.

Why the original optimism? The common consensus for 2023 was that the economy would struggle with consecutive interest run hikes, in turn pushing up gains for bonds with the expectation of a relaxation of monetary policy around the corner

What changed? At its core, assumptions that a slow down in inflation would restrain yields did not play out throughout the year.Jobs and economic growth data for the US came in strong despite slowing inflation — presenting accelerating price growth as a real possibility. This sent yields soaring and the US Treasury market into the red for the year.

But a hard landing may still be coming: One analyst warned that a “hard landing is coming,” according to Bloomberg, adding that many on Wall Street view the possibility of the US economy falling into a contraction as a question of when and not if.

In the short-term: While the market briefly bounced back as traders looked for a safe investment amidst the war between Israel and Hamas, treasuries declined again on Monday as concerns eased over the possibility of more countries joining the war.

EGX30

21,032

+3.5% (YTD: +44.1%)

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

10,622

+0.8% (YTD: +1.4%)

ADX

9,479

0.0% (YTD: -7.2%)

DFM

3,943

-0.6% (YTD: +18.2%)

S&P 500

4,374

+1.1% (YTD: +13.9%)

FTSE 100

7,631

+0.4% (YTD: +2.4%)

Euro Stoxx 50

4,150

+0.3% (YTD: +9.4%)

Brent crude

USD 90.17

-0.8%

Natural gas (Nymex)

USD 3.11

-3.9%

Gold

USD 1,933

-0.4%

BTC

USD 28,402

+4.4% (YTD: +72.6%)

THE CLOSING BELL-

The EGX30 rose 3.5% at yesterday’s close on turnover of EGP 4.0 bn (83.5% above the 90-day average). Local investors were net buyers. The index is up 44.1% YTD.

In the green: Mopco (+20.0%), Abou Qir Fertilizers (+18.6%) and Credit Agricole (+6.7%).

In the red: Orascom Development (-1.5%), Palm Hills Development (-1.0%) and CIB (-0.8%).

Tags:

Our weekly deep dive into the green economy and ESG issue in Egypt.

Published every Tuesday in EnterpriseAM.

Read going Green
10

Going Green

Egypt’s first locally produced EV set to launch in 2024

Could we be seeing Egypt’s first locally produced EV soon? The electric vehicle industry in Egypt could finally be starting to gain some much-needed momentum, as our first locally manufactured EVs — a low-range, low-speed commuter for urban areas — could roll off production lines soon. With the government working on providing incentives to localize the industry as part of its automotive strategy, multiple local companies have announced plans to start locally producing EVs in the foreseeable future.

Enterprise spoke with industry experts to find out how Egypt is faring on the EV front, how close we are to locally manufacturing EVs, and how ready the country is for a nationwide switch to green mobility.

Where do we stand? The AAST said it was on the verge of producing affordable, locally-assembled electric cars last February, with a possible launch date by August of this year. The academy’s EV project seems to be inching closer and closer to the finish line. “We’re already done with the design of the vehicle, and there’s already a functional prototype. Production should start in early 2024,” head of the The Arab Academy for Science, Technology and Maritime Transport (AAST)’s EV project Mohamed Elghamry told us. “Output will start at 1k vehicles a month by early next year, then we hope to reach an output of 5k vehicles within seven months of launching,” he said.

Two vehicles at an incredible price point: The AAST plans to release two vehicles — one with a top-speed of 60km/h and a battery capacity of 100 km per charge and another with a top speed of 90 km/h and a battery capacity of 200 km per charge. The EVs will be priced at EGP 120k and 180k respectively, Elghamry said. “The entire body of the vehicle will be manufactured locally, as well as all the internal components — the seats, the glass, etc,” he said. The vehicles’ components are set to be 100% locally manufactured within a year, pending a couple of rounds of testing for the remaining non-local components such as the engine and battery, Elghamry explained.

Think golf carts or “smart cars,” not luxury cars: The vehicles are specifically made for shorter commutes inside the city, which Elghamry believes is what most Egyptians will need. “We’ve created a car that is made for driving inside the city. 80% of private cars are used primarily within the city, where the speed limit is mostly between 60-80 km/h. You don’t really need a car with an expensive engine that moves much faster than the limit,” Elghamry said. “Other than the engine itself being relatively cheap, we can generally maintain low prices as we avoid import customs and longer supply chains, which is what causes auto prices to be expensive in the first place,” he added.

And on the road to a golden license: “The prime minister has agreed to give us a golden license, and we’re going through the process of acquiring it officially in the coming months,” Elghamry said.

But is local production the way to go? “I don’t think we have the know-how and the technology to locally produce a car from scratch,”Abou Ghaly Motors COO Tamer Kotb told us. “We still have to rely on international companies for the know-how on producing EV motors and batteries. The alternative is to attract international companies to produce EVs here, providing a trust-worthy option for the Egyptian consumer who continues to view EVS with an air of skepticism,” he said.

Throw the focus on local assembly instead: Abou Ghaly Motors is set to start locally assembling Geely EVs at some point this year, and Kotb believes the focus should be on turning Egypt into an EV export hub for neighboring markets. “We should be focused on attracting international auto companies to invest here, and produce primarily to export,” he said, “By prioritizing local assembly, we contribute to fixing the FX crisis, we create jobs, and we still provide Egyptian consumers with a product that will earn their trust.”

The EV market is maturing, regardless of who builds them: When asked about the expected market demand, Elghamry said with the prices and technology offered, there will be plenty of consumers ready to adopt AAST’s product. “Charging stations won’t be an issue, as the infrastructure is already available and expanding, and our cars will come with their own chargers,” he added.

The infrastructure to support EVs is taking shape: Renewable energy player Infinity is planning to increase the number of its charging stations to 300 and charging spots to 1k by 2024, as part of a larger plan with the government to set up 6k vehicle charging spots across the country.

And other players are venturing into the space: State-owned El Nasr Automotive had also hoped to put locally manufactured vehicles into the market by 2023, but is still seeking new international partners after talks with Chinese firm Dongfeng fell through. Most recently, El Nasr held talks with Hinduja Group subsidiary Ashok Leyland in May over a potential partnership.

Tags:

CALENDAR

OCTOBER

Late October-14 November: 3Q2023 earnings season.

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

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

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

26 October (Thursday): Daylight saving time ends.

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

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

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

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

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

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

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

Signposted to happen some time in October:

NOVEMBER

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

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

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

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

12 November (Sunday): Deadline for technical and financial offers for Misr Aluminium Company rehabilitation project (extended from 12 October)

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

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

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

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

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

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

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

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

DECEMBER

December: Kenyan trade conference in Egypt.

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

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

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

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

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

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

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

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

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

Signposted to happen sometime in December:

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

EVENTS WITH NO SET DATE

2023: The inauguration of the Grand Egyptian Museum.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

2Q 2025: Safaga Terminal 2 to start operations.

2024

JANUARY

7 January (Sunday): Coptic Christmas.

25 January (Thursday): Revolution day.

APRIL

6 April (Saturday): Coptic Easter.

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

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

MAY

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

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

JUNE

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

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

JULY

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

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

SEPTEMBER

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

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

OCTOBER

6 October (Sunday): Armed Forces Day.

Now Playing
Now Playing
00:00
00:00