Egytrans’ board nods to NOSCO acquisition through share-swap

Wednesday, 19 Apr 2023

Egytrans’ board nods to NOSCO acquisition through share-swap

An independent publication supported by

Opening up a world of opportunity

Realize More

Live More

Powering with nature

Driving growth

Today at a glance

M&A WATCH

Egytrans’ board approves NOSCO share-swap acquisition bid.

Energy

Gas output from Zohr field falls but Egyptian LNG exports stay steady.

Energy

Eni to start drilling East Med exploration well + Chevron wants to hunt for more natgas off our shores.

Real estate

Consultant JLL is feeling positive about the future of our real estate, hospitality sectors.

Startup watch

Nigeria’s Autochek acquires a majority stake in local startup AutoTager.

Also on our Radar

El Nasr Automotive is still in talks to find a foreign EV partner.

Diplomacy

Egypt continues diplomatic efforts as Sudan violence enters a fifth day.

PLANET FINANCE

Investors wager on further falls to come for the USD.

HARDHAT

How did real estate development fare in FY 2021-2022?

What We're Tracking Today

THIS MORNING: EGX off from tomorrow + More on the regional realignment

Good morning, wonderful people, and a very happy THURSDAY-equivalent. Welcome to the final work day in Ramadan before we head off to celebrate Eid. The week is ending just as briskly as it began with another busy news day to see us into the extended long weekend.

The BIG STORY here at home this morning:M&A takes top billing as Egytrans moves forward with its acquisition of NOSCO. We also bring you plenty of energy news, both positive (as major firms press ahead with more exploration off our shores) and not quite so positive (output from the supergiant Zohr field reportedly dipped last year.)

BUT FIRST- The EGX will be closed from tomorrow, 20 April through next Tuesday, 25 April to mark Eid El Fitr and Sinai Liberation Day, the bourse confirmed in a news bulletin yesterday. That makes a full house: The CBE, the private sector, and the public sector have already been confirmed as getting those days off.

We wish you a very happy Eid: EnterpriseAM will be back next Wednesday morning, 26 April, at the appointed hour.

Not enough holidays for you? We’re getting yet another long weekend very soon after Prime Minister Moustafa Madbouly made Thursday, 4 May a holiday for the public and private sector to mark Labor Day, which falls on 1 May. The decision was published in the Official Gazette.

** SO, WHEN DO WE EAT? We’ll be breaking our fasts at 6:24pm CLT today. You have until 3:52am tomorrow morning to hydrate and grab a bite to eat.

The Enterprise Exports & FDI Forum, our latest industry-specific conference, is taking place on Monday, 15 May. The Enterprise Exports & FDI Forum will give insiders and newcomers alike the chance to talk about how to develop an export-centered business and how their companies can help Egypt build an export-led economy that makes us a magnet for foreign direct investment (FDI).

Why exports & FDI? In the wake of successive floats of EGP, exports and FDI have never been more important to our economy — or our businesses. We’re gathering some of the CEOs, top execs from local companies and multinationals, investors, bankers and finance folks to speak on how businesses can adapt their strategies to be export-oriented and what Egypt as a country can do to draw foreign investment and much-needed FX. Expect it to be heavy on lessons learned in Egypt and other global growth markets — and lots of success stories.You can learn more on our conference website here.

And what better place to discuss moving our goods than Egypt’s original logistics zone — the Nile. That’s why we’re looking forward to holding the event by the river’s vistas at the Four Seasons, Nile Plaza.

Some of the biggest names in business and finance are on board — are you? The Enterprise Exports and FDI Forum is taking place with the generous support of our friends, including:

Banking partners: Banque Misr | Al Baraka Bank | Emirates NBD | HSBC

Event partners: Beyti | Concrete | Global Corp | Grant Thornton | Hassan Allam Utilities

WANT TO BECOME A COMMERCIAL PARTNER? Ping a note to Moustafa, our head of commercial, here.

HAVEN’T REQUESTED AN INVITE YET? If you’re a C-suite exec, business owner, DFI staff, export executive, investor or banker, please fill out the form here to signal your interest, letting us know your name, title and where you work.

More banks launch high-interest certificates of deposit:

HSBC Egypt is offering a fixed, three-year CD at a rate of 17.25%, according to the bank’s website. Interest is paid monthly and the minimum deposit is EGP 10k.
Suez Canal Bank is offering a three-year fixed CD at a rate of up to 19%. The minimum buy-in is EGP 1k.
EGBank has launched three-year CDs — a fixed certificate at 19% and a declining-rate certificate that starts at 23%. Interest is paid monthly on both CDs and the minimum deposit is EGP 1k, according to the bank’s website.
Industrial Development Bank (IDB) has launched three-year CDs with an interest rate of 39% —equivalent to 13% annually — with the return paid in advance on the day following the purchase of the certificate, according to the bank’s Facebook page. The minimum deposit is EGP 50k.

REMEMBER- Both state-owned and private-sector banks haveintroduced new high-yield certificates of deposit in the wake of the central bank’s decision last month to raise interest rates by another 200 basis points.

FROM THE RUMOR MILL-

SFE receives offers to develop the dissolved National Party’s HQ: Four companies have responded to the Sovereign Fund of Egypt’s (SFE) tender to develop the former HQ of the defunct National Democratic Party, Al Shorouk reported yesterday, citing anonymous sources. The head of the Saudi Egyptian Development Company last year confirmed that the company had submitted a bid alongside Dubai-based ASGC Group. The other bidders include an American-Emirati consortium and two offers from Saudi and local companies, according to Al Shorouk.

AND- Another sign of movement on the privatization program? Prime Minister Moustafa Madbouly met with SFE head Ayman Soliman and chair Hala El Said as well as other sovereign fund officials to follow up on its efforts to draw investment, according to a cabinet readout. Local media has reported that we could see news on SFE and government efforts to sell down stakes in state-owned assets soon after the Eid holiday.

French wheat exports to Egypt could be in jeopardy: The French government is trying to maneuver around an imminent ban on the insecticide phosphine by the country’s health watchdog that would stop their wheat suppliers from exporting to North African countries including Egypt, RFI reports. The ban is scheduled to go into effect on 25 April. Wheat shipments to Egypt aren’t allowed into the country unless treated directly with phosphine, according to the news outlet.

THE BIG STORY ABROAD-

The two words on every front page this morning: Fox and Dominion. The international press is focusing on the USD 787.5 mn settlement reached in the e-voting company’s defamation lawsuit against Rupert Murdoch’s US news channel. Dominion filed the USD 1.6 bn defamation lawsuit in 2021 after Fox anchors aired false claims that the company had swayed the 2020 presidential election in Joe Biden’s favor. (Reuters | AP| Bloomberg| CNN| CNBC| Washington Post | Wall Street Journal | FT)

THE REALIGNMENT-

Qatar and UAE to restore diplomatic ties in coming weeks: Qatar and the Emirates are reportedly in the process of restoring diplomatic relations and reopening embassies, two years after a Saudi-led deal ended the boycott on Doha, Reutersreports, citing a UAE official and a statement from Qatar’s international media office.

When is the question: A Gulf official reportedly told the newswire that new ambassadors will be in office by mid-June while another source said that diplomatic ties will be restored within weeks.

A broader push for reconciliation: Restoring ties between Doha and Dubai comes within the broader push for reconciliation in the region. Saudi Arabia and Iran have agreed to normalize relations in a China-brokered agreement, Egypt and Turkey are preparing to reappoint ambassadors, the war in Yemen looks to be winding down, Syria is close to reentering the Arab League, and Turkey is making up with countries in the Gulf.

Speaking of Yemen: Saudi Arabia held talks in Yemen with the Houthi movement earlier this week as the two sides negotiate a permanent ceasefire agreement and an end to the nine-year war, according to Reuters. The two sides agreed to exchange around 900 detainees during the talks, which were described by the Houthi’s chief negotiator as “serious and positive.”

Saudi FM in Syria as ties warm: Saudi Foreign Minister Prince Faisal bin Farhan visited Damascus for talks with Syrian President Bashar Al Assad, according to the Saudi Press Agency, becoming the first Saudi FM to visit the country since 2011. Saudi Arabia and Egypt have in recent weeks pushed to bring Syria back into the Arab fold following more than a decade of isolation, and have held a series of talks aimed at restoring diplomatic ties.

King Salman could be heading to Iran: Iran has invited Saudi King Salman for an official visit to the country as ties between the two rivals continue to improve following last month’s shock agreement to restore diplomatic relations. Iranian president Ebrahim Raissi’s invite, announced at a presser by the country’s foreign ministry spokesperson yesterday, comes after he received a similar invite to visit Riyadh. Saudi Arabia has yet to respond to the invitation.

Looking to build on its recent diplomatic coup, China offers to mediate Palestine-Israel peace talks: China has offered to facilitate peace talks between Palestine and Israel, stating that it is willing to play a constructive role in resolving the longstanding conflict in the region. Foreign Minister Qin Gang expressed his support for a “two-state solution” during a phone call with both parties, state media agency Xinhua reported on Monday.

MARKET WATCH-

Have rumors of the greenback’s demise been greatly exaggerated? Talk of de-dollarization has been making the rounds in recent months, as a slew of major emerging markets — such as China, Russia, India, Brazil and Saudi Arabia — move towards local currency settlements for international trade. But the dominance of the greenback as the world’s reserve currency, which is used in 88% of global trade transactions, is “likely to last for the foreseeable future,” economist Tyler Cowen writes for Bloomberg. He cites a number of reasons, including the liquidity and openness of the US financial markets and the need for a unified international currency.

Tl;dr- Bloomberg chief EM economist Ziad Daoud sums up Cowen’s argument against the chances of de-dollarization in this tweet.

CIRCLE YOUR CALENDAR-

Visa Everywhere Initiative applications open in Egypt for fintech startups: Egyptian commerce and payment startups can apply until 14 May to the Visa Everywhere Initiative (VEI). The regional leg of the innovation competition offers a USD 20k top prize and the chance to progress to the global stage, as well as networking and support.

Hajj registration extended: Registration for this year’s Hajj through tourism companies has been extended to 27 April, Al Malreported citing an announcement from the Egyptian Travel Agents Association. Registration started on 12 March and was initially set to end today.

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

CORRECTION- In our coverage of Jefferies International MENA analyst Alia Moubayed’s interview with Asharq Business yesterday, we incorrectly wrote that she expects a fourth devaluation of the EGP. We’ve amended the story on our website.

*** 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 review the development of the real estate sector in FY 2021-2022.

Tags:

banking CDs DIPLOMACY FDI foreign exchange Middle East politics Sovereign Fund of Egypt What We're Tracking Today

Colorful spring activities come alive this spring at Somabay: A memorable action-packed week from April 21-28 for everyone. From spirited beach parties, commercial nights, sunset brunches, fashion shows and a bazaar, kids’ camps, adrenaline-pumping classes, selective food trucks and much more awaits you. Every corner of the destination will radiate inescapable Spring vibes, inviting the community to live it up. For more information, please contact book@somabayholidays.com or 16390.

M&A WATCH

Egytrans board approves NOSCO takeover bid

Egytrans is one step closer to acquiring NOSCO via a share swap: Egytrans’ board of directors approved the acquisition of trucking firm the National Transport and Overseas Services Company (NOSCO) at a meeting yesterday, it said in a statement (pdf). The transaction will see the company acquire 99.9% of NOSCO’s shares via a share swap and values NOSCO at around EGP 174.1 mn, according to our math. The acquisition is conditional on the approval of Egytrans’ shareholders at a meeting on 14 May, said Egytrans Chairman Mohamed Gamal Moharam.

The details: Egytrans will exchange one of its shares for every 0.0447 shares of NOSCO’s capital. This will see the company acquire nearly 3 mn of NOSCO’s shares and in return issue 67.1 mn new shares to NOSCO shareholders. A fair value study valued NOSCO at EGP 58.033 per share and Egytrans at EGP 2.594.

About the two firms: EGX-listed Egytrans offers air, sea and land transport services as well as customs clearance and storage. NOSCO is a private trucking company that has implemented several national projects including power stations and refineries, the Zohr natural gas field, the Cairo monorail, and the transport of the Ramses II statue to the Grand Egyptian Museum (GEM).

Background; The acquisition has been in the works since at least October, when Egytrans said (pdf) the two were exploring a share swap arrangement. The company said in March that it expected to close the transaction during the first half of the year.

The move falls in line with Egytrans’ expansion and growth strategy: The company aims to “strengthen the executive and operational capabilities of the group” and target larger logistics projects by using Nosco’s fleet and technical expertise, CEO of Egytrans Abir Leheta said.

Advisors: Egytrans hired Zaki Hashem and Partners as its legal counsel for the transaction, while NOSCO appointed Catalyst Partners as financial consultant and transaction manager. Archer Financial Advisors performed the fair value assessments.

Tags:

EgyTrans logistics M&A Watch NOSCO transport

Energy

Zohr slump hampers Egyptian gas output -report

Zohr gas output slumps in 2022: Gas output from Eni’s giant Zohr gas field dropped 11% y-o-y to 2.5 bn cfd in 2022, Mees reports. The diminished output from the Italian firm’s flagship field, which is 6% below the output cap set on the field in 2021 and 23% short of the field’s total production capacity, likely comes on the back of water breakthrough difficulties, according to Mees.

The slump has exacted a toll on our total gas production, which dipped to a 28-month low of 6.1 bn cfd in February, down 7% y-o-y, according to figures published by Mees earlier this month. Zohr, the Mediterranean’s largest gas field, accounts for some 38% of the country’s gas output. The discovery of the field in 2018 allowed us to pull the plug on gas imports and turned the country into a net natural gas exporter.

But LNG exports remain stable thanks to imports of Israeli gas: Despite the Zohr rout, Egypt’s LNG exports were up 6% y-o-y to 1.9 mn tons in 1Q 2023, buoyed by imports from Israel, according to Kpler data cited by Mees. Israel’s gas deliveries to Egypt surged 49% to a record 606 mn cf/d in 2022.

Remember: Egypt and Israel signed a landmark gas export agreement in June to ramp up exports to the EU as the continent looks to phase out reliance on Russian fossil fuels. The agreement allows Israel to send more gas to Egypt’s LNG facilities for export to Europe.

Gas is a key source of hard currency for Egypt: The government has sought to maximize gas proceeds to alleviate the FX crunch triggered by the war in Ukraine, and last year began rationing domestic consumption in order to increase exports.

Eni is a key partner for Egypt, producing 60% of its gas and owning a 50% stake in its Damietta LNG plant, one of the country’s two export terminals. Egypt is a major market for Eni, contributing a third of its total gas production during the quarter.

Tags:

energy oil and gas Zohr Field

Energy

Eni to drill new Mediterranean exploration well. PLUS: Chevron seeks drilling vessel to ramp up East Med exploration -reports

Eni is preparing to start drilling an exploration well at its Mediterranean North East Hap’y concession in September, Al Mal reports, citing anonymous industry sources. One of the company’s operating companies in Egypt, the Belayim Petroleum Company (Petrobel),will handle the drilling of the Orion X1 well, which is expected to cost USD 130 mn, the newspaper's sources say.

Eni + Energean own the concession: The well is situated in the North East Hap’y concession, which is 70% owned by Eni and 30% by London-headquartered oil and gas company Energean, which is looking to farm down 12% of its interest (pdf) ahead of the drilling. Petrobel is a 50/50 joint venture between Eni and the Egyptian General Petroleum Company (EGPC).

CHEVRON WANTS MORE EAST MED EXPLORATION-

Energy major Chevron is looking for a drilling vessel to explore for more natural gas off Cyprus, Egypt, and Israel to help fulfill increasing demand for energy in Europe and the region, Reuters reports, citing two unnamed sources. The company reportedly issued a tender to lease the vessel starting in 2024.

REMEMBER- Chevron is expanding in the region: The company is working to exploit Cyprus’ Aphrodite field with its partners Shell and Israel’s NewMed Energy, with plans to export much of that gas to Egypt for liquefaction. Chevron and Eni also announced a significant discovery in the eastern Mediterranean in January.The gas deposit has been said to hold 3.5 ton cubic feet of natural gas though we’re still waiting on the companies and the Oil Ministry to confirm its size.

Tags:

Chevron Egyptian General Petroleum Corporation energy Eni oil and gas

Real estate

The hospitality, real estate sectors are in for a speedy recovery -JLL

Privatization + the EGP deval could boost Egypt’s real estate sector: The long-term outlook for Egypt’s real estate and hospitality industries is positive as the rebooted privatization program and the weaker EGP stimulate growth in the sector, global real estate consultancy JLL said in its latest quarterly report (pdf). New FDI inflows from regional and international investors in the real estate sector will boost demand, it wrote.

Weakening EGP good for tourism: Some 15 mn tourists are expected to visit the country in 2023 — a 28% increase from 2022 — driven by the devaluation of the EGP, improved infrastructure, and the proposed five-year visa, according to the report.

Hotel occupancy on the up:Hotel occupancy stood at 74% in the first two months of 2023, up from 62% in the same period last year. ADRs (average daily rate) rose by 19% to USD 135 and RevPAR (revenue per available room) increased by 40% to USD 100, according to the report. Hotel stock in Cairo remained at 28k keys during 1Q 2023 and 900 are expected to be added by the end of the year.

Real estate growth: Some 4k residential units were added during the January-March period, taking total stock to 249k. More than 29k new units are expected by the end of the year but hikes in construction costs are expected to cause project delays and fewer launches. Rental prices in Sixth of October City saw an 11% y-o-y increase in 1Q 2023 and there was an 8% increase in New Cairo.

Commercial rents inch lower: The average office rent in Cairo decreased by 1% y-o-y in 4Q 2022 to USD 358 per square meter per year (but increased in EGP terms). Demand among multinationals and new market entrants was weak during the quarter, resulting in the vacancy rate rising to 13%.

Some analysts expect office rents to fall dramatically: In a report earlier this month, Fitch Solutions forecast a 30% drop in office rents this year due to falling demand.

Tags:

hospitality real estate tourism

Startup watch

Nigeria’s Autochek acquires majority stake in Egyptian automotive startup AutoTager

Nigeria-based car financing platform Autochek has acquired a majority stake in local automotive startup AutoTager, it said in a press release yesterday. The value of the transaction was not disclosed.

What is AutoTager? Established in 2021 by Amr Rezk (LinkedIn), AutoTager is a digital platform that allows people to sell their cars and access finance to buy new ones.

This is Autochek’s first step into Egypt and second in the region: The company entered North Africa last year after acquiring Moroccan online car marketplace Kifal Auto. It is now active in nine countries across East, West and North Africa and has closed six acquisitions in the past two years.

Tags:

Autochek automotive AutoTager Startup watch

Kudos

Egyptian cinematographer Haya Khairat to receive award at Cannes

Egyptian filmmaker Haya Khairat to receive award at Cannes Film Festival: Khairat announcedthat she will receive the Angénieux Special Encouragement Award at this year’s Cannes Film Festival, which will take place between May 16-27. Since 2018 the prize has recognized young, talented cinematographers from across the world.

Tags:

film Haya Khairat KUDOS

LAST NIGHT’S TALK SHOWS

Violence in Sudan dominates Egyptian talk shows on 19 April, 2023

Another night dominated by the violence in Sudan: Our talking heads continued their coverage of all things Sudan as the Sudanese army and the Rapid Support Forces (RSF) militia continued fighting that broke out on Saturday. We have all the details on Egyptian efforts to mediate the conflict in Diplomacy, below.

“The only loser in this war is the Sudanese nation,” political commentator Mostafa El Feky told Yahduth Fi Masr (watch, runtime: 3:15 | 2:28). He added that every other nation will protect its own interests and therefore Sudan needs to resolve the conflict without foreign interference.

Checking in on the Egyptians in Sudan: Egyptians stranded in Sudan amid the war have reached out to Ala Mas’ouleety’s Ahmed Moussa (watch, runtime: 3:03) telling him that they are fearing for their lives. They also have very limited access to food, water, and electricity, according to Moussa.

Tags:

DIPLOMACY Egypt-Sudan relations LAST NIGHT’S TALK SHOWS

EGYPT IN THE NEWS

El Nasr Automotive in talks with Chinese, Indian firms over local EVs. PLUS: Expat car import scheme raises USD 500 mn so far + Fresh infrastructure, industrial projects

AUTOMOTIVE-

Negotiations continue for EV development at El Nasr Automotive: El Nasr Motors is currently negotiating with Indian and Chinese firms to partner on the development of a locally-made electric car, Al Borsa reports Mohamed El Saadawy, chairman of the Holding Company for Metal Industries, as saying.

The long search: The company’s previous attempts to choose a foreign partner for the project have been unsuccessful, with talks with Chinese firm Dongfeng falling through in 2021. The government has been searching for a replacement partner for the past 18 months.

The latest tally from the expat car import scheme: The Finance Ministry has raised USD 500 mn from the expat car import scheme launched in November to bring in new foreign currency, it said in a statement yesterday. Finance Minister Mohamed Maait added that around 100k expats have registered online while 800 cars bought through the scheme have been released.

That’s 20% of the target set by the ministry, which originally envisioned the initiative bringing in USD 2.5 bn. Following a lackluster response, the government extended the scheme for three months and tweaked the rules to encourage more people to purchase vehicles.

14 May is deadline day: Expats have 26 days to sign up to the scheme and pay the fees to the Finance Ministry. There are no plans to extend it beyond 14 May, Maait said.

EDUCATION-

CIRA board approves new loan to repay EBRD: The board of EGX-listed education services provider CIRA Education has approved plans to apply for a new loan to meet debt repayments to the European Bank for Reconstruction and Development (EBRD), it said in a bourse filing (pdf) yesterday. CIRA obtained an EUR 25 mn loan (pdf) from the European lender in 2019 to establish a university in Nasser City, Assiut.

Rising rates weighing on CIRA: The company said the decision was made after the Central Bank of Egypt raised its lending rate to 19.25%. Rising interest rates caused the company’s financing costs to double y-o-y between September and February and contributed to a 25% fall in net income. Central bank rates have increased 1k bps over the past year.

INDUSTRY-

Methanex to supply SMD with methanol: Canadian-Egyptian methanol producer Methanex Egypt will supply methanol to the Suez Methanol Derivatives Company’s (SMD) facility in Damietta, it said in a statement (pdf) last week.

Aswan-Dam-powered green ammonia? State-owned chemicals maker Kima could convert one of its old factories into a green ammonia facility powered by the Aswan High Dam, CEO Emad El Din Mostafa told Al Mal.

INFRASTRUCTURE-

French finance for wastewater treatment plant: The French Development Agency (AFD) will provide EUR 52 mn in financing to expand the wastewater treatment plant in Helwan, the Housing Ministry said Friday. The project will more than triple the capacity of the plant to 800k cubic meters per day.

REGULATION-

New regs for precious metals funds: The Financial Regulatory Authority has issued new regulations governing funds investing in precious metals as part of efforts to diversify investment and saving options. You can read the regulations in full here.

TRANSPORT-

EgyptAir to increase flights to the US of A: EgyptAir will begin operating three weekly direct flights between Cairo and Newark Liberty International Airport in New Jersey from 3 June, it said Friday.

Tags:

ALSO ON OUR RADAR automotive CIRA Education debt watch development finance Education EgyptAir El Nasr Automotive EVs Financial Regulatory Authority French Development Agency industry infrastructure Methanex petrochemicals transport

PLANET FINANCE

Hedge funds are shorting the USD on the back of banking turmoil

Investors are betting the greenback will decline further on expectations that the US central bank will be forced to hold interest rates steady while those in the UK and eurozone rise, the Financial Times reports. Speculative traders have doubled their short positions in the greenback since mid-March to a total of USD 10.7 bn, the FT says citing Refinitiv calculations. “The dollar has had a fantastic run but it’s starting to turn,” Deutsche Bank strategist Alan Ruskin is quoted as saying.

What do you mean “further declines”? We might think of the USD as a perennially “strong” currency, but it’s seen a big reversal of fortunes in recent months. The greenback last week hit its lowest level in a year against a basket of currencies as the US banking crisis quelled expectations of further rate hikes. The drop comes after an 18-month bull run that saw the USD hit a 20-year high back in September.

Also worth knowing this morning:

E-commerce platform Noon has laid off some 10% of its 3.4k-strong workforce as part of cost-saving measures. “We started [layoffs] before the big tech companies did but we’re done now,” said founder Mohamed Alabbar. (Bloomberg)
Goldman Sachs is “narrowing focus” after a tough quarter: The bank is pushing ahead with plans to pull away from consumer banking after 1Q 2023 revenue fell 5% to USD 12.2 bn and earnings dropped 18% to USD 3.2 bn. (WSJ)
HSBC’s biggest shareholder Ping An has renewed calls for the bank to spin off its Asia business ahead of a 5 May shareholders’ meeting. Advisory group Glass Lewis has counseled against the proposal. (Reuters)
Higher oil prices will more than offset any losses to the Saudi purse from the production cuts it agreed with OPEC+, according to the IMF. (Bloomberg)

EGX30	17,539	-0.8% (YTD: +20.1%)
USD (CBE)	Buy 30.84	Sell 30.96
USD at CIB	Buy 30.85	Sell 30.95
Interest rates CBE	18.25% deposit	19.25% lending
Tadawul	11,164	+1.2% (YTD: +6.5%)
ADX	9,638	-0.1% (YTD: -5.6%)
DFM	3,512	-0.1% (YTD: +5.3%)
S&P 500	4,155	+0.1% (YTD: +8.2%)
FTSE 100	7,909	+0.4% (YTD: +6.1%)
Euro Stoxx 50	4,394	+0.6% (YTD: +15.8%)
Brent crude	USD 84.75	-0.0%
Natural gas (Nymex)	USD 2.36	-0.1%
Gold	USD 2,015.80	-0.2%
BTC	USD 30,342	+2.8% (YTD: +83.8%)

THE CLOSING BELL-

The EGX30 fell 0.8% at yesterday’s close on turnover of EGP 1.95 bn. Local investors were net buyers. The index is up 20.1% YTD.

In the green: Abu Dhabi Islamic Bank (+10.0%), Credit Agricole Egypt (+6.7%) and Abu Qir Fertilizers (+6.2%).

In the red: CIB (-6.7%), Telecom Egypt (-3.8%) and Ibnsina Pharma (-1.7%).

Tags:

currencies Financial Markets foreign exchange Goldman Sachs HSBC Noon Planet Finance

Diplomacy

Egyptian FM Sameh Shoukry reiterates impartiality in Sudanese war

It’s day five of the chaos in Sudan: The fighting between the Sudanese Armed Forces and paramilitary group the Rapid Support Forces (RSF) continues after a 24-hour ceasefire brokered yesterday collapsed within hours. At least 270 people have now been killed and more than 2.6k injured in the fighting, which has left residents with limited supplies of food and water and in some cases no electricity.

A broad coalition for peace: Egypt, the US, European countries, GCC nations, and the UN are all speaking in a unified voice calling for a truce in Sudan, US State Department regional spokesperson Sam Werberg told Al Qahera News yesterday (watch, runtime: 8:43). Foreign Minister Sameh Shoukry yesterday told CNN’s Becky Anderson that “We have to concentrate at this stage and try to encourage a peaceful dialogue for an end to the conflict … in conjunction and through our communications with the various neighboring countries, and also those who have influence: the US [and] our European friends,” Shoukry said. Shoukry also spoke to his Greek counterpart Nikos Dendias about the latest developments in Sudan yesterday, following conversations with multiple regional powers earlier this week.

Egyptian troops in Sudan: Shoukry said authorities are in communications “related to the safety of those personnel” when asked by CNN’s Anderson about Egyptian troops who had reportedly surrendered to the RSF in Merowe. The troops were conducting military exercises in Sudan, Reuters quotes the Egyptian Armed Forces as saying. Shoukry noted that Egypt has “many participants in capacity building in Sudanese life” and is working to ensure the safety of all Egyptians in Sudan. “We maintain impartiality and total commitment to the best conditions for the Sudanese people,” he added.

RSF forces are ready to work with Egypt on the return of the troops, RSF leader General Mohamed Hamdan Dagalo told Sky News Arabia (watch, runtime: 13:22.)

EgyptAir has suspended its flights to and from Khartoum indefinitely.

Tags:

DIPLOMACY Egypt-Sudan relations Sameh Shoukry

HARDHAT

A rundown of the real estate units completed in Egypt during FY 2021-22

By the numbers: Egypt’s real estate developments in FY 2021-2022: Egypt saw some 246.1k residential units built across the country during FY 2021-2022, according to state census bureau CAPMAS. These units include projects from private sector players, as well as the government and other public sector entities, including social housing projects, CAPMAS said in its housing bulletin for the fiscal year. Total investments in these developments reached EGP 143.5 bn, down a slim 4% y-o-y, the bulletin says. CAPMAS does not specify how much each of the public and private sectors invested during the fiscal year.

REMEMBER- The real estate industry has been having a tough time with lots of macroeconomic headwinds over the past couple of years, particularly following the start of the war in Ukraine. Infrastructure players in Egypt have been squeezed by rising raw and building material prices, higher borrowing costs, and the devaluation of the EGP. In 2022, some 10-20% of real estate developers reported halting their construction projects at some point during the year due to fiscal and logistical pressures, while some indicated they sold off projects before starting construction.

The private sector was responsible for a little under half of the units built during the fiscal year: Private sector players built 115.4k residential units during the fiscal year, accounting for 46.9% of all units completed. That’s a 32% y-o-y drop compared to the previous fiscal year’s units.

But the public sector took up the majority of the development work: Some 53.1% of all units (130.7 units) built in FY 2021-22 were developed by the government or public sector, according to the CAPMAS report. Although the government and public sector took the lion’s share of FY 2021-22 housing construction, the number of units they delivered during the fiscal year was down 21.5% compared to the previous fiscal year.

That explains why affordable housing accounted for the biggest portion of developments: Some 56.8% of all housing units built during the fiscal year were affordable housing, followed by middle-income units, which accounted for 28.4% of units constructed in FY 2021-2022. Luxury housing came in third with a 9.2% share, while upper-middle-income housing had the smallest share (5.6%). Affordable housing accounted for 74.5% of construction projects from the government and public sector, followed by luxury housing (12.9%).

For the private sector, middle-income housing was the biggest segment, accounting for 46.3% of the units private businesses constructed in FY 2021-22. Affordable housing came in second with a 36.8% share of private construction activity, followed by upper-middle-income housing (11.9%), while luxury units came in last with a 5% share.

In terms of the geographical distribution of real estate development, Cairo (unsurprisingly) took the lion’s share: Around 38% of all housing units constructed by the government and public sector during the fiscal year were in Cairo, followed by Giza (17.8%). Ismailia had the smallest share, with Ismailia trailing in last spot with a meager 0.2% share. For the private sector, Cairo was again in the top spot with 23% of private companies’ developments in FY 2021-22 concentrated in the capital city. Coming in second was Sharqia, which accounted for 13.1% of private sector developments, while Port Said had the smallest share (0.2%) of private sector developments during the fiscal year.

Meanwhile, the government has been pushing forward with developing informal settlements: Between 2010 and 2021, the government completed 70 projects to develop slum areas and informal settlements. Over those 11 years, the Informal Settlements Development Fund (ISDF) oversaw the building of 89.4k residential units and 2.5k commercial units worth EGP 40.3 bn, according to the CAPMAS bulletin. These developments were concentrated in Cairo, which accounted for around 48% of the units completed over the 11 years, followed by Alexandria (34%), while just 0.2% of these units were built in Ismailia, which had the lowest number of developments, according to CAPMAS. This construction push came as the government has been working to develop informal settlements across the country.

The finances: The government’s FY 2021-22 budget earmarked EGP 50 bn for social housing developments, including building 390k homes and developing 3.9k feddans in unplanned and informal settlements.

Your top infrastructure stories for the week:

The government may have to curb the pace of large-scale infrastructure projects amid macroeconomic instability, IMF boss Kristalina Georgieva told reporters.
Elsewedy Electric and major Qatari contractor UCC Holding have signed an EPC contract with the Libyan General Electricity Company (GECOL) to build a 1.0k MW power plant in Libya.
Joint Egyptian-Greek energy projects including the GREGY electricity interconnector topped the agenda in talks between Foreign Minister Sameh Shoukry and Greece’s prime minister in Athens.

Tags:

Hardhat housing infrastructure real estate

CALENDAR

APRIL

April: SCZone roadshow in China.

April: SCZone to begin providing ship bunkering services in the Suez Canal’s ports.

20-25 April (Thursday-Tuesday): Holiday for the public and private sectors as well as banks in observance of Eid El Fitr and Sinai Liberation Day.

21 April (Friday): Eid El Fitr (TBC).

27 April (Thursday): Registration for this year’s Hajj concludes.

28 April (Friday): First day of daylight saving time.

30 April (Sunday) House of Representatives back in session.

30 April (Sunday): Tenth of Ramadan dry port tender deadline.

30 April (Sunday): Deadline for self-employed to register for e-invoicing.

30 April (Sunday): Deadline for corporate tax returns.

30 April (Sunday): End of Mediterranean, Nile Delta oil + gas exploration tender.

Late April – 15 May: 1Q2023 earnings season.

MAY

1 May (Monday): Labor Day.

1 May (Monday): Deadline to apply to VC funds program by GIZ Egypt, AfricaGrow and Dutch development bank FMO.

1-5 May (Monday-Friday): African Private Equity and Venture Capital Association annual summit, Four Seasons Nile Plaza, Cairo.

2 May (Tuesday): National Paints Holding’s and Eagle Chemicals’ MTOs for Pachin ends.

2-3 May (Tuesday-Wednesday): Federal Reserve interest rate meeting.

3 May (Wednesday): National Dialogue begins.

4 May (Thursday): National holiday in observance of Labor Day (TBC).

4 May (Thursday): IEF-IGU Ministerial Gas Forum, Cairo.

7 May (Sunday): Senate back in session.

9-11 May (Tuesday-Thursday): First edition of the Arab Actuarial Conference, Cairo.

12-15 May (Friday-Monday): Egypt Fashion Week.

14 May (Sunday): Expat car import scheme ends.

14 May (Sunday): EgyptAir to launch a new route to Dhaka, Bangladesh.

14 May (Sunday) Egytrans’ shareholders to vote on NOSCO acquisition.

15 May (Monday): Enterprise Exports & FDI Forum, Four Seasons Hotel Cairo at Nile Plaza.

16-18 May (Tuesday-Thursday): Egypt will host its first conferenceon cybersecurity and defense intelligence systems (CDIS-Egypt).

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

19 May (Friday): Arab League summit, Riyadh.

19-21 May (Friday-Sunday): G7 summit, Hiroshima, Japan.

20-21 May (Saturday-Sunday): eGlob Expo, St. Regis Almasa Hotel, Cairo.

22-26 May (Monday-Friday): Egypt will host the African Development Bank (AfDB) annual meetings in Sharm El Sheikh.

JUNE

June: Indian representatives to discuss prospect investments in the Suez Canal.

7-10 (Wednesday-Saturday): The second edition of Africa Health Excon.

10 June (Saturday): Thanaweya Amma examinations begin.

12 June - 15 July (Monday-Saturday): Thanaweya Amma exams.

13-14 June (Tuesday-Wednesday): Federal Reserve interest rate meeting.

15 June (Thursday): Deadline for bids in EGPC’s mature oil fields tender.

19-21 June (Monday-Wednesday): Egypt Infrastructure and Water Expo debuts at the Egypt International Exhibition Center.

22 June (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

28 June-2 July (Wednesday-Sunday): Eid El Adha (TBC).

30 June (Friday): June 30 Revolution Day.

30 June (Friday): Egypt to exit Grains Trade Convention.

JULY

1 July: House of Representatives deadline to approve the FY 2023-2024 budget.

1 July: GAFI to launch the country’s first integrated electronic platform to facilitate setting up a business.

18 July (Tuesday): Islamic New Year.

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

23 July (Sunday): Revolution Day.

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

27 July (Thursday): National holiday in observance of Revolution Day.

Late July-14 August: 2Q2023 earnings season.

AUGUST

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

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

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

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

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.

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

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

OCTOBER

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

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

6 October (Friday): Armed Forces Day.

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

Late October-14 November: 3Q2023 earnings season.

26 October (Thursday): Daylight saving time ends.

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

NOVEMBER

November: Cairo to hostIntra-African Trade Fair.

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

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

DECEMBER

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

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.

2023: Egypt will host the Asian Infrastructure Investment Bank’s Annual Meeting of the Board of Governors in 2023.

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.

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

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

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