Egypt, Ethiopia agree to resolve GERD dispute

1

What We're Tracking Today

Sisi heads to Kenya + Sudan peace talks to restart in Saudi Arabia

Good morning, wonderful people, and welcome to a short workweek.

THE BIG STORY here at home this morning: We’ve just buried the hatchet with Turkey — are we about to do the same with Ethiopia? Signs of another diplomatic breakthrough were in the offing last week after a seemingly cordial meeting between President Abdel Fattah El Sisi and Ethiopian prime minister Abiy Ahmed in Cairo. The two leaders have agreed to try and find an agreement within four months to finally end the GERD dispute and reach a settlement that allows Ethiopia to generate electricity without jeopardizing Egypt’s water security.

ON THE BUSINESS FRONT- The National Bank of Egypt’s fintech Momkn looks to be the target of a group of private equity firms, NUCA just closed another huge securitized bond, and Alstom wants to make its rolling stock and signaling systems here in Egypt.

^^ All that and more in this morning’s news well, below.

PSA #1- We have two four-day weeks ahead of us. We’re all off Thursday-Sunday in observance of Islamic New Year and Revolution Day. All Enterprise editions will be off and will resume publication on Monday, 24 July.

PSA #2- Look for the heatwave to continue through the long weekend, with the mercury in the 40-43°C band with reasonably high humidity in the mornings.

PSA #3- Attention pre-series A startups: Silicon Valley VC 500 Global has partnered with the Communication Ministry’s Information Technology Industry Development Agency (ITIDA) to launch the Scale Up Program in Egypt, it said in a press release (pdf). The seven-week program will focus on local pre-series A startups, offering them the mentorship necessary to help them scale up their operations. Interested startups can join the waitlist here.

PSA #4- Customs evaders could face up to EGP 10k in fines: The Customs Authority will start handing out EGP 10k fines to anyone caught lying on their customs declaration forms, failing to clear goods, or preventing custom officials from carrying out their jobs, Al Mal reported.

PSA #5- The application deadline for the USAID Scholars Activity and USAID EgyptianPioneers scholarship programs is this Thursday, 20 July. The programs offer scholarships to 250 Thanaweya Amma students in public, experimental and STEM schools. Apply here.

HAPPENING TODAY-

El Sisi heads south: President Abdel Fattah El Sisi is in Kenya today to participate in the African Union’s midyear coordination meeting, Ittihadiya said yesterday. El Sisi will go through Egypt’s agenda as the head of the New Partnership for Africa's Development Agency (NEPAD). He’ll also talk about climate change, according to the statement and is expected to meet with his Kenyan counterpart, President William Ruto, for one-on-one talks.

Sudan peace talks are back on: Representatives of Sudan’s warring factions arrived in Saudi Arabia yesterday to restart peace talks, Sudanese government sources told Reuters. The meeting comes hot on the heels of the summit in Cairo last week that brought together all eight of Sudan’s neighbors to discuss bringing an end to the conflict. We have the details in this morning’s news well, below.

HAPPENING THIS WEEK-

The National Dialogue’s committees are set to meet this week to finalize a communique for the dialogue’s last round of sessions ahead of presenting it to the board of trustees, Youm7 reports. The National Dialogue sessions — which have been on pause since the Eid Al Adha break — will then resume next week, according to the newspaper. The National Dialogue kicked off in May, holding three weekly sessions discussing political, economic, and social issues.

When does the National Dialogue end, you ask? It’s anybody’s guess. There’s been no official comment on a potential end-date for the process since a senior official involved in the process said in early May that it would run at least 2-3 months more, adding that it was “not possible” to set a timeline for it to wrap up.

G20 finance ministers are meeting in India this week: The war in Ukraine, rising global interest rates, climate finance and crypto regulations will all be on the table when G20 finance ministers meet in Gandhinagar this week, according to Bloomberg.

Reminder: Egypt has a seat at the table. India has invited Egypt to take part as a guest at this year’s G20 meetings.

THE BIG STORY ABROAD-

Soaring global temperatures are making the headlines this morning as the onset of El Niño threatens to push the mercury to record levels. The Associated Press, Reuters, the Wall Street Journal, the Washington Post and CNBC have more.

Two stories out of the US worth keeping an eye on this fine Sunday morning:

Republicans are looking for a fight over the US Defense Department’s budget, having inserted into a key defense spending bill provisions aimed to curb “abortion rights, diversity training and medical care for transgender patients,” the Financial Times reports.
Economists in the US are dialing-back their predictions of recession. They still expect GDP to contract, but now say it will happen “later, and by less, than previously [predicted],” the Wall Street Journal writes.

ALSO- You need to go new series to enjoy — the next season of your favorite US show is going to be delayed. Hollywood actors have joined writers on strike in a move that has effectively shut down all production of movies and television series in the United States. The New York Times has a nice scene-setter.

MORNING MUST-READ- If you’re grappling with what AI does and doesn’t mean for your business, you may want to go read Ben Evans’ blog,the former a16z partner (LinkedIn). His AI and the automation of work is among the more nuanced pieces we’ve read in a while — and makes clear that there really aren’t a lot of easy answers just yet.

CIRCLE YOUR CALENDARS- The Enterprise Finance Forum is taking place on 18-19 September at the St. Regis Hotel in Cairo. This flagship forum is the latest in our must-attend series of invitation-only, C-suite-level gatherings that allow senior members of our community to openly and frankly discuss critical issues in key sectors of the economy.

TAP OR CLICK HERE if you want to express interest in attending. We’ll be sending out the first batch of invitations soon.

Do you want to become a commercial partner? Ping a note to Moustafa Taalab, our head of commercial, or fill out this form and we’ll be in touch.

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

DID YOU MISS THE ENTERPRISE EXPORTS AND FDI FORUM? Tune in to the Enterprise Podcast and listen for yourself: The Enterprise Podcast is back with another installment of our forum series, where we bring you audio recordings of what was said on stage at the Enterprise Exports and FDI Forum,which took place in May.

WANT TO LISTEN? Head to: Apple Podcast | Spotify | Google Podcast. We’re releasing a new episode every Sunday morning.

IN THIS WEEK’S EPISODE- From deciding the target markets, to focusing on quality, marketing in new markets, and restructuring a business around exports, our panelists discuss and provide key insights on what businesses need to focus on when building an exports and FDI strategy. We were joined on that panel by Hossam Sallab, CEO and vice-chairman of Sallab Group and Royal Ceramica, Mark Wyllie, CEO of Beyti Egypt, and Kareem Abou Ghaly, the chairman and CEO of Pasta Regina.

ENTERPRISE IS LOOKING FOR SMART, TALENTED PEOPLE of all backgrounds to help us build some very cool new things. Enterprise — the essential morning read on all the important news shaping business and the economy in Egypt and the region — is looking for writers, reporters and editors to help us build out new publications.

NEVER WORKED IN A NEWSROOM BEFORE? We have the Enterprise Business Writing Development Program. Whether you are a recent graduate, an industry vet, or looking to switch careers, the Enterprise Business Writing Development Program will give you the tools you need to tell the most important stories to our audience of C-suite officials, government ministers, diplomats, financiers, investors and entrepreneurs.

Not an internship program — a career: The three-month program will see full-time, paid participants take part in workshops and lectures from veteran business journalists, while also working on and filing stories that will run on any of our publications. Those who have successfully completed the program, will then be given long-term job offers.

Apply directly to jobs@enterprisemea.com and mention “reporter development program” in your subject line.

Book your summer vacation with Stayr at Somabay and indulge in a first-class selection of vacation homes, in-tune with each unique holiday mood. Experience ultimate relaxation by our breathtaking coastline and allow our team of experts to plan the perfect getaway to suit your mood. For booking inquiries, call +20 15 5600 5693 or visit our website.

Egypt’s fintech industry sees new licensing requirements as “big step forward”

INDUSTRY REAX- Fintech players laud new regs for fintech licenses: The Financial Regulatory Authority’s (FRA) newly-issued regulations for obtaining fintech licenses are a major step for the sector and for Egypt’s financial inclusion push, according to several industry players Enterprise spoke with. These regulations have been in the making for around a year, our sources say, and could unlock significant growth in the industry.

REFRESHER- The updated regulations (pdf) to the Fintech Act — which flesh out licensing requirements published in brief last year — introduce clear requirements for fintech providers looking to get licensed by the regulator. Would-be providers need to demonstrate they have the right equipment, access to basic facilities and infrastructure, applications, and databases to support their activities. The changes also introduce better protections against fraudulent transactions and cybersecurity risks, and require providers to prove they would be able to recover from a security breach.

The biggest game changer in the new regs: Opening the door for a fully digitized onboarding process for new clients. “This is a massive achievement for our agenda as an economy when it comes to financial inclusion,” Ahmad Hammouda, CEO of stock-trading app Thndr, told Enterprise. “It’s a great and long-awaited development that the industry has been trying to introduce for years,” Azimut Egypt Asset Management CEO Ahmed Abou El Saad told Enterprise. Requiring “wet signatures” during the onboarding of new clients “makes no sense” with the advent of new technology that can fulfill the same functions of verifying identification and linking a user’s information to the civil registry database, Abou El Saad said.

A digitized process expands accessibility + financial inclusion: Businesses would need to set up more branches to ensure service accessibility across different income segments and geographic location, which would increase costs and encourage businesses to focus more on attracting high net worth individuals, rather than looking at a wider customer base, Hammouda said. “If you live outside of Cairo or Alexandria, your chances of having access to these services are low unless the process is taken online,” he said. An in-person onboarding process adds to business’ operational expenses, “which are typically passed to the end consumer,” Digital Finance Holding CEO Shehab Marzban told Enterprise. “A physical token might be useful for B2B transactions but not for B2C such as consumer finance, BNPL, or nano finance players,” he said.

What do businesses need to do to get their hands on a license? The regulations now require businesses applying for a fintech license to submit a proposed tiering system of requirements for incoming customers depending on their risk profile. “This is actually genius because it allows businesses to address how they will handle clients with different risk levels — somebody with a EGP 100 wallet is very different in terms of risk from someone whose wallet is worth EGP 1 mn,”one industry player said. Financial institutions in general struggled with having one set of requirements regardless of the user’s risk profile, which by default makes it more accessible for larger wallets, Hammouda said.

More stringent regulations — but that’s exactly what’s needed: “These are financial transactions we’re talking about, so it’s a serious matter and the regulator needs to make sure that there’s a high level of security,” Abou El Saad told us. “Yes, the requirements are stringent, but that’s exactly what’s required for this type of activity,” he said, stressing that the tight regulations remain “very feasible” for fintech players.

Azimut is ready to take advantage of the new regulations: The asset manager plans to submit its licensing request to set up the country’s first digital mutual fund platform within the coming few days, Abou El Saad said. “We have everything in place — the tech infrastructure, the business proposal, everything — and were just waiting on the FRA to issue these regulations. We started putting things in motion to apply for the license as of Thursday — basically as soon as the regulations were issued,” he told us.

Private equity firms eye 25% stake in Egypt’s Al Ahly Momkn

Investors jostle for stake in Al Ahly Momkn: A group of private equity firms, including Tana Africa, Lorax Capital Partners, and US-based UltraCapital, are bidding to acquire a 25% stake in state-owned e-payments player Al Ahly Momkn, Al Mal reports, citing sources it says are familiar with the matter. Shareholders have reportedly received acquisition offers from several firms from Saudi Arabia, the UAE, Oman, France, and the Netherlands, the sources said, without providing further details.

The sellers: The bidders are looking to acquire the 18.1% stake held by Al Ahly Momkn co-founder Samir Abo Hashem and another 6.9% stake held by several other shareholders.

Momkn is majority-owned by NBE: The National Bank of Egypt’s investment arm Ahli CapitalHolding acquired a 75% stake in Al Ahly Momkn in 2021 in a transaction that was valued at the time at around EGP 140 mn. The acquisition brought Momkn under Tamkeen, a platform for a host of non-banking financial services companies that operate as subsidiaries of a new holding company, Al Ahly Capital Holding Financial Services.

Advisors: Al Ahly Pharos has reportedly been tapped to advise Al Ahly Momkn.

EDITOR'S NOTE- This story was amended on Wednesday, 19 July to correct Samir Abo Hashem's title. A previous version of this story incorrectly stated that Abo Hashem is CEO and chairman of Al Ahly Momkn.

NUCA closes EGP 15 bn securitization issuance, the largest in Egypt so far this year

NUCA just closed Egypt’s largest securitization so far this year: The New Urban Communities Authority (NUCA) has closed a EGP 15 bn securitized bond issuance, the first in an EGP 30 bn program, according to a statement (pdf) from Dreny & Partners, which acted as the authority’s legal advisor.

About the issuance: The four-tranche issuance, backed by a receivables portfolio originated by NUCA, is comprised of an EGP 1.71 bn tranche, an EGP 6.06 bn tranche, an EGP 5.82 bn tranche, and an EGP 1.41 bn tranche. The tranches received a rating of Prime 1, AA, AA-, and A-, respectively, from the Middle East Ratings and Investors Service (MERIS). The statement didn’t disclose how the authority will use the proceeds.

The biggest of 2023 by a wide margin: The crown for the largest issuance of the year was previously held by MNT-Halan, which closed a USD 140 mn (EGP 3 bn) sale in February.

NUCA is the biggest player in the local securitization market: NUCA has twice set the record for the market’s biggest securitization, closing a EGP 20 bn transaction in 2022 and a EGP 10 bn sale in 2020. Since 2019, it has securitized EGP 55 bn of its portfolio.

DATA POINT- Companies have now issued someEGP 37.5 bn of securitized bonds so far this year, more than double the EGP 16.56 bn issued during the same period last year.

Advisors: CI Capital, Al Ahly Pharos and CIB acted as financial advisors, while Banque Misr, National Bank of Egypt, Banque du Caire, and CIB were underwriters. CIB was also custodian and bookrunner, and Baker Tilly was the sole auditor. Dreny & Partners provided counsel.

^^ What does all this mean? We broke down the different roles in securitization in a recentexplainer.

Alstom to produce rolling stock, electrical systems in Egypt

Alstom to invest EUR 300 mn in Borg El Arab factories: French rail manufacturer Alstom plans to invest some EUR 300 mn in Egypt over the next three years to establish two factories in Borg El Arab to produce electrical systems and metro and monorail rolling stock, Al Mal reports, citing sources it says have knowledge of the matter. The news comes on the heels of cabinet’s approval to allocate land for the two planned factories. A representative of the company declined to comment on the matter when we reached out last week.

Refresher: Cabinet earlier this month approved in principle a plan put forward by Alstom to establish an industrial complex in Borg El Arab. The complex is set to include two factories producing electrical and signaling systems and other parts for railways, metro lines, high-speed rails, and monorails.

Where do the plans stand? Alstom is in talks with the Transport Ministry to finalize the designs of the factories, which should be drawn up in line with the specifications of the Egyptian Railway Authority and the National Authority for Tunnels, according to Al Mal’s sources.

Alstom is a big player in Cairo public transit projects: The company is leading theconsortium in charge of the Sixth of October-new capital monorail, and is a key supplier for the Cairo Metro, providing new rolling stock for Metro Line 1, and signaling and control systems for the third phase of Metro Line 3. It is also set to supply rolling stock and a raft of equipment for the planned Metro Line 6.

AIIB to provide EUR 250 mn loan for Egypt’s Abu Qir metro project

More money for the Abu Qir metro project:The Asian Infrastructure Investment Bank (AIIB) will provide EUR 250 mn in financing for the redevelopment of the Abu Qir railway in Alexandria, the International Cooperation Ministry saidThursday. The two sides signed the agreement during International Cooperation Minister Rania Al Mashat’s visit to Beijing last week.

What metro system? The project seeks to convert Alexandria’s Abu Qir railway into an electric, low-carbon, underground metro. The line connects the center of Alexandria to Abu Qir in the east of the city.

AIIB is chipping in a sixth of the project’s cost: The EUR 1.6 bn project is also getting anEUR 750 mn from the European Investment Bank, EUR 250 mnfrom the French Development Agency, and EUR 250 mn from the European Bank for Reconstruction and Development (EBRD).

Egypt’s cement industry calls for extension to output cuts as demand slides

Keep cement supply cuts in place, industry tells regulators: Cement factories have filed a request with the Egyptian Competition Authority (ECA) to extend a quota system that enforces cement production cuts, according to several industry sources Enterprise spoke with. The quota system, which is set to expire on23 July, aims to buoy cement prices as producers weather a decline in demand and a prolonged supply glut. The news was first picked up by Al Borsa.

Refresher: The ECA in July 2021 introduced a one-year quota system at the request of local companies to put an end to a chronic supply glut that had left many in the industry on the brink of collapse. The system mandated supply cuts of over 10% for the industry, and was extendedfor another year in July 2022 in response to a new wave of requests.

There’s a steep decline in demand: Local demand for cement dropped around 9% y-o-y in 1H 2023, Arabian Cement CEO Sergio Alcantarilla and Lafarge Egypt Commercial, Marketing and Logistics Director Ahmed Abdo told Enterprise. “We would have to go back to 2008 to see lower cement demand,” Alcantarilla said, adding that even 2020 — which saw the worst of the covid-19 pandemic — didn’t see such low levels of demand. Meanwhile, cement prices, measured in USD per ton, “are still 40% below the prices of November 2016, just before the first big devaluation of the EGP,” he said.

Who’s lobbying for the extension? “At least a vast majority of cement factories have asked for another extension of the quota system,” Alcantarilla told us.

The ask: Lafarge Egypt has requested the ECA to extend the quota system for two more years, Abdo told us. Arabian Cement, meanwhile, has asked for a one-year extension, in addition to a reduction in its allotted quota of more than 10% but less than 20%.

A crucial lifeline: If the quota system doesn’t get an extension, factories would be forced to halt operations as they did in 2021, Alcantarilla said, adding that only some would be able to continue operations albeit with hefty losses. The end to the cuts would also “mean a few USD hundreds of mns less income into the country” as exports of cement and clinker would quickly dwindle, he added.

Egypt, Ethiopia agree to push for GERD settlement. PLUS: Sudan peace bid.

Could Egypt and Ethiopia finally end the GERD dispute? President Abdel Fattah El Sisi and Ethiopian Premier Abiy Ahmed agreed to accelerate talks to find a solution to the long-running dispute over the Grand Ethiopian Renaissance Dam (GERD), the two sides said in a joint statement after meeting in Cairo on Thursday. Cairo and Addis Ababa aim to finalize an agreement within the next four months, bringing an end to years of acrimonious negotiations over how to share the Nile’s water.

REFRESHER- The two countries, together with Sudan, have been unable to agree on how to divvy out the Nile’s water resources following the construction of the USD 4.6 bn dam, which Egypt says presents an existential threat to its water security. Central to the dispute is the timetable for filling the GERD’s reservoir and how much water Ethiopia will release as the dam becomes operational. Ethiopia has been unilaterally filling the reservoir over the past three years without a binding agreement, angering Cairo which in 2021 pulled out of African Union-led negotiations.

An olive branch? Ethiopia will continue to fill the reservoir this year but has pledged to do so in a way that doesn’t cause “significant harm” to Egypt and Sudan and continues to meet their water needs, according to the statement.

Ethiopia says GERD will benefit all: “Ethiopian believes that the dam will be very beneficial to all … helping store Nile water, which can be used in the case of a drought,” Ahmed said in a statement.

EGYPT LAUNCHES SUDAN PEACE BID-

ALSO IN DIPLOMACY- Cairo hosts summit to push for peace in Sudan: The leaders of Egypt and the six other African countries called for a lasting peace in Sudan during talks in Cairo on Thursday. In an eight-point communique, the countries agreed to set up a council of foreign ministers to coordinate efforts to end the country’s three-month civil war and called on both sides to commit to an extended ceasefire.

Background: The summit brought together the leaders of countries that share borders with Sudan: Egypt, the Central African Republic, Chad, Eritrea, Ethiopia, Libya, and South Sudan. The Sudanese army has been fighting against rival paramilitary group Rapid Support Forces (RSF) since April, causing the displacement of mns of people and forcing thousands to flee into neighboring countries. No representatives of either party attended the summit.

In detail: The council is tasked with drawing up an action plan of “practical steps,” communicating directly with Sudanese parties, and setting mechanisms to deliver humanitarian aid to Sudan, among other responsibilities designed to complement the work of the Intergovernmental Authority on Development and the African Union. The council will hold its first meeting in N’Djamena, the capital of Chad, and will present its recommendations at the next Sudan peace summit.

Calls for a ceasefire: The seven countries called on the warring factions to commit to an immediate ceasefire, appealed to other countries not to interfere in the conflict, and agreed to facilitate delivery of humanitarian aid, according to the communique. Saudi Arabia and the US have mediated a series of short-term truces between the two sides but talks collapsed in June following serious violations of the ceasefire.

Warring factions welcome mediation:The Sudanese army and the RSF both welcomed the outcome of the summit in statements on Thursday.

Qalaa Holding 1Q 2023 revenues up

Qalaa Holdings reported a 62% rise in revenues to EGP 30.3 bn in 1Q 2023,according to its earnings release (pdf). Net income for the period fell 84% from the same quarter last year, largely on the back of one-off gains in 1Q 2022 including EGP 842 mn from debt restructuring at its transportation and logistics segment last year. The company also saw higher interest expenses in 1Q 2023 thanks to rising global interest rates and paid higher taxes in the quarter. Revenue growth in 1Q of this year was driven by strong refining margins at the Egyptian Refining Company (ERC), which accounted for some 77% revenues.

Non-ERC revenues also see growth: Revenues excluding ERC increased 38% y-o-y to EGP 6.9 bn during the January-March quarter. Energy distribution subsidiary TAQA Arabia’s revenues rose 27% to EGP 2.9 bn on the back of a strong performance from TAQA Gas and the increase in fuel prices at TAQA Petroleum. Meanwhile, National Printing’s top line grew 54% to EGP 1.4 bn.

What they said: “Qalaa has kicked off the year with a positive and promising performance, amid a difficult operating environment … The past period has seen us focus on reducing our risk levels, primarily by deleveraging and growing Qalaa’s cash flows,” said Managing Director Hisham El Khazindar.

1Q 2022’s figures revised: The company had originally reported a EGP 584.1 mn loss in the first quarter of last year but has now revised this to a EGP 468.9 mn. This occurred after it reclassified the EGP 1.2 bn FX loss suffered during the EGP devaluation in March 2022 as other comprehensive income, removing it from its net income calculation.

Talk shows cover the latest on GERD, Egypt’s efforts for peace in Sudan

It was a diplo-heavy night on the airwaves, with the nation's talking heads focusing on a potential resolution to the years-long Grand Ethiopian Renaissance Dam (GERD) dispute and Egypt’s efforts to resolve the crisis in Sudan.

A GERD resolution on the horizon? President Abdel Fattah El Sisi and Ethiopian Premier Abiy Ahmed over the weekend agreed to once again revisit the GERD dispute with the aim to find a solution within months.

Why the Egyptian rethink? “One of the main points of disagreements was the duration of the filing, with the Ethiopian side persistent that the filling be three-years long, while the Egyptian side was talking about an 8-10 year filling,” Khaled Okasha, general manager of the Egyptian Center for Strategic Studies, told Kelma Akhira’s Lamees El Hadidi (watch, runtime: 3:14). The dam has been in the works since 2011 and the filling started in 2020 yet “our water supplies have not been harmed over the past years,” he added.

And why the Ethiopian change of heart? “Ethiopia has a desire to cooperate with Egypt in a number of important African issues including the Sudanese crisis … without Cairo, Addis Ababa won’t be able to manage what is happening in Sudan,” he added (watch, runtime: 2:17).

More coverage: El Hekaya’s Amr Adib also had the news (watch, runtime: 3:51). We have all the details in this morning’s Diplomacy, above.

The response in Sudan to the Cairo summit: The outcomes of the Egypt-hosted summit of Sudan’s neighbors last week were welcomed by the Sudanese army and the Rapid Support forces, Nabd Sudan editor-in-chief Emad Al Sanousi told Al Hayah Al Youm (watch, runtime: 9:33). “The outcomes align with the Sudanese people’s aspirations,” he added. We have the full story in the news well, above.

Also on the airwaves last night:

Your sweet tooth won’t kill you: Artificial sweetener Aspartame, mostly used in diet sodas, is now classified by the WHO as a potential carcinogen but it is safe for consumption within the daily limit — which according to Kasr El Einy Professor Ashraf Omar, is 14-15 cans per day. Goodbye, teeth. (Kelma Akhira | watch, runtime: 1:21) | (El Hekaya | watch, runtime: 4:27)
Not everyone is happy about Travis Scott playing the pyramids: US rapper Travis Scott will unveil his new album with a live performance at the pyramids later this month, but the gig is generating opposition from some quarters due to his response to a fatal crowd crush at his Astroworld Festival in 2021, according to Al Hayah Al Youm’s Mohamed Sherdy (watch, runtime: 3:33).

El Sisi-Abiy Ahmed GERD talks are leading the conversation on Egypt in the foreign press this morning

Politics is leading international coverage on Egypt this morning: President Abdel Fattah El Sisi’s meeting with Ethiopian prime minister Abiy Ahmed (Bloomberg | Associated Press | Reuters) and last week’s summit in Cairo aimed at ending the civil war in Sudan (Reuters | Associated Press) are getting attention in the foreign press. We have all the details on both these stories in this morning’s news well, above.

More money = more inflation: A jump in the money supply in the previous fiscal year could fuel inflation further and put further pressure on the EGP, Patrick Werr writes for Reuters, citing bankers and analysts. M1 money supply climbed 31.9% y-o-y in FY 2022-2023, after growing 23.1% and 15.7% y-o-y in the two previous fiscal years, according to central bank figures. Increasing the money supply has been a tool used by authorities to keep the deficit in check, according to analysts cited by Werr, who say the central bank has done this by lending to the government including by buying government bonds.

Also making headlines:

Egypt: A value destination for hard currency holders. Egypt joins Turkey, South Africa, Japan, and Kenya as the most-affordable summer holiday destinations for UK tourists as named by the Guardian. (The Guardian)
Which A-listers have performed at the Giza Pyramids? With rapper Travis Scott set to unveil his upcoming album at the pyramids later this month, the National is out with a list of the biggest artists to perform at the famous site. (The National)
More mahraganat: In a long read for the Guardian, author Yasmine El Rashidi writes about the rise of Egyptian hip-hop and what the genre’s popularity says about a generation of young Egyptians who came of age after the 2011 revolution. (The Guardian)

Ikarus Electric wants to establish 200 EV charging stations in three years. PLUS: New Radisson hotel, Concrete Plus-Saudi collaboration, EgyptAir in Manchester

AUTOMOTIVE-

One of the new kids on the EV charging block sets out its plans: Local firm IkarusElectric plans to establish 200 EV charging stations worth more than EGP 150 mn within three years, Al Mal reported Thursday. The company recently received a one-year license to build 50 EV charging stations and is in the process of obtaining licenses for another 17, the company’s general manager, Moustafa Mohamed, reportedly told the newspaper.

MANUFACTURING-

#1- Concrete Plus brings in Saudi investor for SCZone tire plant:Concrete Plus has set up a JV with an unnamed Saudi investor to partner on its EUR 750 mn tire factory in the Suez Canal Economic Zone, Al Mal quotes Concrete Plus founder and CEO Tarek Youssef as saying. Concrete Plus will hold 51% of the JV, with the Saudi partner holding the remaining balance, Youssef said. Concrete Plus received approval from the SCZone last month to build the plant.

The details: The plant will be built over several phases, including a EUR 400-450 mn phase to produce 2.5 mn car tires per year, followed by a second phase to expand production to tires for cargo trucks. The company expects to initially produce 5 mn of these tires per year. The output from the factory — which is expected to start operations within two years — will be split 50/50 between exports and the local market.

#2- Sprea Misr opens sulfuric acid factory: Egypt Kuwait Holding’s (EKH) petchem subsidiary Sprea Misr yesterday inaugurated a EGP 1.4 bn sulfuric acid production plant, according to Al Borsa. The factory will produce some 165k tons a year, 80% of which go towards EHK-majority owned AlexFert, the newspaper quotes EKH CEO Sherif El Zayat as saying.

And more production lines: Sprea Misr also recently added six laminate sheets production lines which produce a combined 3 mn sheets a year, the entirety of which will be exported, El Zayat said. He had previously said that the new production lines will cost some USD 12 mn.

HOSPITALITY-

Radisson plans expansion in Egypt: Radisson Hotel Group will open a new luxury hotel in Marsa Alam in 2025, the company said recently. The Radisson Collection hotel will be situated in Port Phoenice next to the Red Sea and contain 294 rooms, several restaurants and a diving center, the hospitality giant said.

TOURISM-

EgyptAir lands in Manchester: EgyptAir yesterday carried out its first trip to Manchester, the Civil Aviation Ministry said. The flag carrier will make five flights a week between Cairo and the northwestern English city.

COMMODITIES-

Zinc export fee extended for one year: Trade and Industry Minister Ahmed Samir has extended export fees on zinc products for another year, the ministry said yesterday. The import fee of EGP 5k per ton was last extended in January for a six-month period as a measure to help meet local market demands.

REMEMBER- The ministry in December scrappeda ban on the export of salvaged and scrap metals — including steel, copper, lead, aluminum, and zinc — in a bid to help manufacturers struggling with price hikes and shortages of raw materials.

Slowing US inflation is bringing the greenback back down to earth

The greenback is tumbling as US inflation slows — and that’s good news for risk assets: The accelerating decline of the USD on the back of easing US inflation is increasing investor appetite for higher-yielding risk assets around the globe, Reuters reports. The greenback has now dropped almost 13% against a basket of currencies from last year’s two-decade high, and last week hit its lowest level in 15 months. The decline was accelerated by last week’s slower-than-expected inflation data, which is fuelling bets that the US Federal Reserve will soon bring its aggressive tightening cycle to an end.

EM assets stand to benefit: The MSCI International Emerging Market Currency Index has gained 2.4% this year as the greenback’s decline makes USD-denominated debt easier to service. The USD’s fall could also continue to boost the EM carry trade, the process whereby investors borrow greenbacks at low interest rates to invest in higher-yielding EM currencies. The Colombia’s COP has yielded 25% year-to-date, while Poland’s PLN has gained 13%, according to data from Corpay.

India, UAE jump to de-dollarize trade, link payment systems: The UAE and India have agreed to use their own local currencies for cross-border trade and link their payments systems under MoUs inked during Indian Prime Minister Narendra Modi’s visit to the UAE yesterday, according to statements from the UAE and India’s central bank.

We’re noticing a trend here: Major emerging markets such as China, Russia, India, Brazil and Saudi Arabia have accelerated the use of local currency settlements in response to Washington’s unprecedented financial sanctions against Moscow, cutting out the USD for bilateral trade.

ALSO WORTH NOTING-

BlackRock, KKR to exit Adnoc pipeline unit: US private equity giants BlackRock and KKR are reportedly close to selling their combined 40% stake in Adnoc Oil Pipelines to Abu Dhabi wealth fund ADQ for USD 4 bn, and look set to exit in a matter of days. (Bloomberg)
China exports stall: Exports from the world’s second-largest economy saw their steepest fall since the covid-19 pandemic three years ago in May, according to official figures out Thursday. Beijing’s assessment: “a weak global economic recovery, slowing global trade and investment, and rising unilateralism, protectionism and geopolitics.” (Reuters)

EGX30	17,342	+1.2% (YTD: +18.8%)
USD (CBE)	Buy 30.83	Sell 30.96
USD at CIB	Buy 30.85	Sell 30.95
Interest rates CBE	18.25% deposit	19.25% lending
Tadawul	11,708	-0.2% (YTD: +11.7%)
ADX	9,672	+0.5% (YTD: -5.3%)
DFM	4,010	+0.1% (YTD: +20.2%)
S&P 500	4,505	-0.1% (YTD: +17.3%)
FTSE 100	7,435	-0.1% (YTD: -0.2%)
Euro Stoxx 50	4,400	+0.2% (YTD: +16.0%)
Brent crude	USD 79.87	-1.8%
Natural gas (Nymex)	USD 2.54	-0.2%
Gold	USD 1,964	0.0%
BTC	USD 30,311	+0.2% (YTD: +83.4%)

THE CLOSING BELL-

The EGX30 rose 1.2% at Thursday’s close on turnover of EGP 1.40 bn (about 38% below the trailing 90-day average). Local investors were net buyers. The index is up/down 18.8% YTD.

In the green: Amoc (+7.7%), Eastern Company (+4.2%) and Fawry (+3.7%).

In the red: Qalaa Holdings (-2.4%), TMG Holding (-1.6%) and Palm Hills Development (-1.4%).

CALENDAR

JULY

18 July (Tuesday): Islamic New Year.

18-19 July (Tuesday-Wednesday): Egypt Mining Forum, Nile Ritz-Carlton, Cairo.

19-20 July (Wednesday-Thursday): Gov’t to pay out subsidies to second wave of applicants under its sixth export subsidy program.

20 July (Thursday): National holiday in observance of Islamic New Year.

22 - 24 July (Saturday - Monday): US Assistant Secretary of State for International Organization Affairs Michele Sison in Egypt.

23 July (Sunday): Revolution Day.

23 July (Sunday): National holiday in observance of Revolution Day.

25-26 July (Tuesday-Wednesday): Federal Reserve interest rate meeting.

31 July (Monday): Application deadline for the Smart Green Projects initiative.

31 July (Monday): Emigration Ministry’s Egyptians Abroad conference.

Late July: Egypt’s first Environment and Climate Investment Forum.

Late July-14 August: 2Q2023 earnings season.

AUGUST

August: Hassan Allam Utilities + Agility to open Yanmu East logistics park.

2 - 3 August (Wednesday - Thursday): Gov’t to pay out subsidies to second wave of applicants under its sixth export subsidy program.

3 August (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

10 August (Thursday): Shalateen Mineral Resources gold mining tender closes.

22-24 August (Tuesday-Thursday): BRICS summit, Johannesburg, South Africa.

SEPTEMBER

September: Sustainable Debt Coalition Initiative agreed at COP27 to launch.

September: IDH to open first branch in Saudi Arabia.

September: The Egypt-Germany trade and investment joint conference in Cairo.

September: JETRO’s second delegation arrives in Cairo.

9-10 September (Saturday-Sunday): G20 summit, New Delhi, India.

10-12 September (Sunday-Tuesday): The International Agricultural Exhibition for Africa and the Middle East, Sahara.

13-14 September (Wednesday-Thursday): Hydrogen Egypt Summit, Nile Ritz Carlton, Cairo.

15 September (Friday): IMF to review USD 3 bn program.

15 September (Friday): Deadline for FX bureaus to comply with new capital requirements.

17-18 September (Sunday-Monday): Arab Security Conference and Exhibition, Nile Ritz Carlton, Cairo.

17-19 September (Sunday-Tuesday): Sharm Rendezvous, Rixos Premium Seagate, Sharm ElSheikh.

18-19 September (Monday-Tuesday): Enterprise Finance Forum, St. Regis Hotel, Cairo.

19-20 September (Tuesday-Wednesday): Federal Reserve interest rate meeting.

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

21-23 September (Thursday-Saturday): Narrative PR Summit, Somabay.

25 September (Monday): Nasdaq deadline for Swvl Holdings Corp to increase its market value of publicly held shares to a minimum of USD 15 mn.

25-26 September (Monday-Tuesday): Egypt to host the Asian Infrastructure Investment Bank’s annual board meeting, Sharm El Sheikh.

26 September (Tuesday): Prophet Muhammad’s birthday (TBC).

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

28-29 September (Thursday-Friday) Medical Tourism Conference, Sharm ElSheikh.

OCTOBER

October: Deadline for ins. providers to link their databases with the FRA.

2-4 October (Monday-Wednesday): Sharm Rendezvous - Ins. Market, Rixos Premium Seagate, Sharm ElSheikh.

2-5 October (Monday-Thursday): ADIPEC 2023, Abu Dhabi National Exhibition Center.

6 October (Friday): Armed Forces Day.

9 October (Monday): The Narrative PR Summit, Somabay Red Sea.

9-11 October (Monday-Wednesday): Arabs Savings and Financial Literacy Conference, Four Seasons Hotel.

13 October- 20 October (Friday-Friday): The sixth edition of El Gouna Film Festival (GFF).

Late October-14 November: 3Q2023 earnings season.

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

26 October (Thursday): Daylight saving time ends.

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 (GBSN), American University of Cairo.

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

NOVEMBER

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

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

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

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

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

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

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

DECEMBER

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

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

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

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

EVENTS WITH NO SET DATE

2023: The inauguration of the Grand Egyptian Museum.

Summer 2023: EGX to launch a shariah-compliant index.

1H 2023: GAFI roadshow set to launch to drum up foreign investment for golden licenses

1H 2023: Abu Dhabi Islamic Bank intends to launch a digital consumer finance company

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.

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

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

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

2Q 2025: Safaga Terminal 2 to initiate operations.

Sections

About

Privacy & Support

Get EnterpriseAM daily