FRA hands out Egypt’s first digital factoring license

Monday, 16 Dec 2024

FRA hands out Egypt’s first digital factoring license

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Today at a glance

Fintech

Oliv receives Egypt’s first digital factoring license.

M&A WATCH

Catalyst Partners’ SPAC looks to acquire Qardy through share swap.

Manufacturing

Egypt lays out 23 priority industries for its localization push.

Investment Watch

Qantara West Industrial Zone to welcome two new projects with investments of USD 38 mn.

IPO

MO Group eyes IPO.

Development finance

Egypt to see EUR 77 mn from Germany.

Also on our Radar

Hill International will reportedly manage Giza Zoo development.

PLANET FINANCE

BTC hits another record on news of a first-of-its-kind US BTC strategic reserve.

BLACKBOARD

Diving into the government’s plan for national universities.

What We're Tracking Today

House approves EUR 1 bn package from the EU

Good morning, all. We have a packed issue for you this morning, so let’s jump right in.

HAPPENING TODAY-

#1- Investors can subscribe to CMPE’s capital increase: Investors have between today and Thursday to subscribe to Impact investor Catalyst Partners’ SPAC, Catalyst Partners Middle East’ (CMPE) capital increase. The SPAC wants to raise its capital to EGP 235 mn by offering 22.5 mn shares — valued at EGP 10 per share. CPME is already gearing up for its first acquisition — we have the details in the news well below.

#2- It’s day one of the Debt Management Forum for Africa: The African Development Bank’s two-day Africa Debt Management Forum kicks off today in Abuja, Nigeria. The forum brings together Africa finance ministers, central bank governors, debt managers, and experts to discuss debt sustainability and economic productivity.

PSA-

WEATHER- It’s another chilly day in Cairo, with a high of 21°C and a low of 11°C, according to our favorite weather app.

It’s just as cold in Alexandria, with a high of 21°C and a low of 12°C.

** DID YOU KNOW that we now cover Saudi Arabia and the UAE?

** Were you forwarded this email? Tap or click here to get your own copy delivered every weekday before 7am Cairo time — without charge.

ICYMI- Missed this week’s Inside Industry? In our weekly vertical exploring all things industry and manufacturing, we looked at what the feeder industries need to strengthen local manufacturing. Check out the story here.

SOCIAL SECURITY-

More support for irregular workers: The Labor Ministry has doubled the bonuses disbursed to registered irregular workers to EGP 1k, starting with the bonus to be paid out for Coptic Christmas next month, according to a statement. These bonuses are paid out six times a year on religious holidays as well as Labor Day. This increase in bonuses will cost the state some EGP 1.5 bn annually.

IN THE HOUSE-

MPs approved a EUR 1 bn macro-financial assistance package from the EU, which marks the first phase of a EUR 5 bn set of concessional loans running through 2027 as part of a wider EUR 7.4 bn package from the EU announced in March. The funds will go towards alleviating external financing constraints, easing the government’s balance of payments and budget needs, and boosting FX reserves against the backdrop of regional geopolitical tensions. The package got the thumbs up from the cabinet in August.

ALSO APPROVED- House greenlit USD 500 mn financing program between GASC and the Abu Dhabi Exports Office to facilitate wheat supplies for the authority. The financing will be granted in the form of a revolving USD 100 mn program that will be renewed for five year’s time. “The agreement aims to shore up Egypt’s strategic wheat reserves,” Finance Minister Ahmed Kouchouk told MPs.

THE BIG STORY ABROAD-

It’s a mixed bag in the global press this morning, with major geopolitical shifts in the Middle East, a downbeat warning on the USD, and a once-in-a-century storm all getting ink.

Israel announced plans to expand its population in the Golan Heights, citing the strategic importance of the area. Israeli Prime Minister Benjamin Netanyahu reaffirmed Israel’s commitment to increase its presence in the occupied Golan Heights despite international backlash — “strengthening the Golan is strengthening the State of Israel, and it is especially important at this time. We will continue to hold onto it,” he said in a statement. (Reuters | BBC | Financial Times | Washington Post)

MEANWHILE - Cyclone Chido hits Mayotte: The most powerful storm to hit the French Indian Ocean area of Mayotte in over a century, Cyclone Chido hit the French archipelago last night leaving hundreds dead before heading to Mozambique. In Mayotte local officials fear the death toll could reach thousands as emergency crews struggle with destroyed infrastructure and disrupted communications. (Reuters | BBC | CNN | The Guardian | New York Times)

AND- German Chancellor Olaf Scholz is hoping to lose a confidence vote today in the Bundestag in a bid to trigger snap elections on 23 February.

IN BUSINESS NEWS- Trump policies will likely change how investors feel about the USD, Bloomberg writes, explaining that the greenback will likely face pressures next year on the back of president-elect Donald Trump’s policies and upcoming rate cuts. Major banks like Morgan Stanley and JPMorgan Chase see the USD peaking mid-2025 before falling.

PLUS- It’s interest rate week in the United States, with the Federal Reserve set to hold its final meeting of the year on Tuesday and Wednesday. The Bank of England and the Bank of Japan will follow suit on Thursday.

Expect the Fed to sound a note of caution. The expectation since Donald Trump cruised to victory last month is now for fewer rate cuts over a longer period of time. A quarter-point cut this week seems fairly likely (though less so than before US voters returned The Donald to office), but the swaps market is pricing in just 0.75 bps worth of cuts by next September, suggesting we could see as few as two 0.25 bps cuts next year. The FT has more on what to expect from the three meetings.

*** It’s Blackboard day: We have our weekly look at the business of education in Egypt, from pre-K through the highest reaches of higher ed.

In today’s issue: We dive into the government’s plan for national universities.

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House of Representatives What We're Tracking Today

Somabay, every reason to fall in love.

Fintech

Oliv receives Egypt’s first digital factoring license

FRA hands Egypt’s first digital factoring license to Oliv: SME-focused fintech firm Oliv has secured Egypt’s first digital factoring license from the Financial Regulatory Authority (FRA), according to a statement (pdf) by the company. The move will see Oliv leveraging the government’s e-invoicing infrastructure to bring a fresh product to the underserved SME financing market this week. We spoke with CEO Ziad Mokhtar (LinkedIn) and CFO Hatem Sabry (LinkedIn), the company’s co-founders, to get the inside track on the company’s vision and plans.

(Tap or click the headline above to read this story with all of the links to our background as well as external sources.)

Digital factoring? Factoring is a transaction where a business sells its accounts receivable (invoices) to a third party (factor) at a discount in exchange for immediate cash. Digital factoring leverages online platforms to enable faster and more efficient invoice financing.

The offering: Oliv will extend invoice-financing to SMEs in under 48 hours. “This is a breakthrough,” said Mokhtar, seeing as the process typically takes weeks — if not months — with traditional factoring companies. “What's unique about this is that [Oliv] is going to be the first ever digital factoring company to finance invoices without any paperwork whatsoever and implement a very quick data-driven process,” Mokhtar explained.

The mechanism: Oliv analyzes data from the e-invoicing platform — which the client gives the company access to upon registering through the app — along with information from the Egyptian Credit Bureau (I-Score) and other data. It runs its own algorithms to assess creditworthiness and assign a credit limit within minutes. “Clients select which invoices they want an early payment for and then they select how long it will take them to collect this money and pay it back to us. Then they are presented with the exact cost of this financing and they can sign the contract digitally,” Mokhtar told us.

There’s only one physical touchpoint. The company collects repayment checks ahead of their due date. “This is why the process takes 48 hours and not 15 minutes,” Mokhtar said.

It’s an entirely new domain for SMEs: “Small clients never really do factoring, so we’re actually creating that market for this segment,” said Mokhtar. It’s not economically viable for traditional factoring companies to extend invoice financing to smaller businesses because the due diligence process is extensive regardless of transaction size, Mokhtar explained. “It doesn't make sense to go and visit, inspect the invoices, call clients, check the inventory, revise the financial statements, and make sure the documents are all sound. We believe the only way to make it economically viable is to provide the service digitally.”

So how much does Oliv finance? “It's part of our commercial strategy to focus on low tickets that are typically above the micro-finance ticket sizes,” said Sabry. “We aim to finance up to EGP 5 mn pretty soon and then ramp up that amount next year. There's really no minimum amount.”

The company is in the process of raising more funds: “We're speaking with a number of banks and venture debt firms to be able to secure local currency debt facilities and we've identified a number of banks that are a strategic fit,” said Sabry. “We’re targeting a portfolio of EGP 200 mn next year and want a sizable portion of it to be financed using debt facilities.” Oliv is backed by Cairo-based Algebra Ventures and San Francisco-based Alter Global.

And wants to help grow the industry’s client base 10x in three years: Oliv aims to serve over 5k clients by 2028, up from the 605 clients served by the entire factoring industry in 2023. “But I’m sure that’s just the beginning. Others will join and this will definitely stimulate the real growth of the sector,” Mokhtar said.

There’s plenty of room for growth: Egypt’s factoring volume is around USD 1 bn per year, while Turkey’s is USD 27 bn, said Mokhtar. The size of the local factoring industry stood at EGP 44 bn in 2023, accounting for less than 0.3% of GDP. By comparison, Morocco's factoring industry represents over 2% of its GDP. “If the market is well-served, it could probably be a USD 8-9 bn market. We don't know how quickly we'll get there, but our mission is to move [the industry] towards that point,” he said.

More product launches will follow: The company plans to offer reverse factoring in 2025 to help its SME clients finance their purchases and close the cycle, Sabry said.

Behind it all: Zaki Hashem & Partners provided legal counsel throughout the licensing process. Link Data Centers provided tech infrastructure and cybersecurity services and VLense provided the tech needed to implement digital identity, verification, and contracting capabilities.

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M&A WATCH

Egypt’s first SPAC looks to acquire Qardy through share swap

Egypt’s first SPAC is gearing up for its first acquisition: Impact investor Catalyst Partners’ SPAC, Catalyst Partners Middle East (CPME) is looking to acquire digital lending marketplace Qardy through a share swap, the CPME said in an information memorandum (pdf). The acquisition will be executed through a full or partial share swap, whereby CPME acquires the entirety of Qardy in exchange for issuing new shares.

(Tap or click the headline above to read this story with all of the links to our background as well as external sources.)

What we know about Qardy: Founded in July 2022, Qardy is Egypt's first online lending marketplace connecting financial institutions with micro, small, and medium enterprises (MSMEs) seeking funding. Qardy partners with national and commercial banks, as well as leasing, factoring, and microfinance companies, to offer tailored financial programs supporting MSMEs' working capital and expansion needs.

The move is part of a larger investment plan: The SPAC is looking to acquire six to ten companies — including two fintech and NBFS firms — the firm’s Chairman Maged Shawky previously said.

REFRESHER- CPME made its EGX debut last month, listing 1 mn shares with a nominal value of EGP 10 per share — bringing its total issued capital to EGP 10 mn. During a meeting earlier this month, the extraordinary general assembly approved a recommendation to raise the SPAC’s capital to EGP 235 mn by offering 22.5 mn shares — valued at EGP 10 per share — according to assembly minutes (pdf). The Financial Regulatory Authority (FRA) has since approved the move as well and investors have between today and Thursday to subscribe to the capital increase.

Advisors: Matouk Bassiouny & Hennawy is legal counsel and Beltone Securities Brokerage will broker the transaction.

What’s a SPAC again? A special purpose acquisition company is a type of shell company used by investors to acquire firms. SPACs raise money from the public in an IPO and then use the proceeds to merge with or acquire an appropriate company. Check out our explainer for more on how SPACs work.

Remember: CPME became Egypt’s first SPAC after receiving the green light from the FRA in late September.

IN OTHER M&A NEWS-

Cairo Housing ups stake in United Housing: EGX-listed real estate player Cairo Housing and Development has acquired an additional 21% in United Housing increasing its stake in the company to 70.9% after the two sides carried out a share swap. Cairo Housing was looking to increase its parent company and its subsidiaries’ stake in United to up to 90% — the company and its subsidiaries held a 49.9% stake in the company pre-share swap.

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EGX M&A Watch non-banking financial services Qardy SPACs

Manufacturing

Egypt lays out 23 priority industries for its localization push

Gov’t identifies priority industries earmarked for localization: Transport and Industry Minister Kamel El Wazir laid out the 23 industries that the government is looking to localize, adding that the state is offering incentives and facilities to attract investments into these selected sectors.

(Tap or click the headline above to read this story with all of the links to our background as well as external sources.)

The sectors in question include solar and wind energy components, tires, vehicle batteries, desalination and treatment plant components, baby formula, aluminum products, electrical transformers, seamless pipes, water pump motors, polyester, soda ash, electric motors, generators, water filtration devices, electrical tools, electric control and distribution panels, central air conditioning cooling systems, elevators and escalators, sound systems and cameras, and windshields.

Remember: The ministries of housing and industry had previously selected 12 industries that the Madbouly government will work to localize — the products include electric motors, generators, valves, pumps, water filtration devices, electric tools, solar cells, electrical control and power distribution panels, and elevators.

The government is aiming to localize 152 industries by 2030 in sectors including — but not limited to — the engineering, transport, pharma, and automotive sectors.

DIVE DEEPER- We dove into the ins and outs of Egypt’s localization efforts and the challenges that industrial sector players stand to face in the process of our localization push in an Inside Industry published last month.

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industry Manufacturing

Investment Watch

Qantara West Industrial Zone to welcome two new projects with investments of USD 38 mn

SCZone secures USD 38 mn in fresh investments: The Qantara West Industrial Zone will welcome two new projects with combined investments of USD 38 mn following agreements with the Suez Canal Economic Zone (SCZone), according to a SCZone statement. The new projects — one in food manufacturing and the other in home textiles — will come online during 4Q 2025 and create 1.5k jobs.

(Tap or click the headline above to read this story with all of the links to our background as well as external sources.)

China’s Kelida commits USD 30 mn: Chinese textile manufacturer Kelida will set up a USD 30 mn factory in the industrial zone, creating 1k direct jobs. Over 90% of the factory’s output will be earmarked for exports, with a focus on European and US markets.

Turkish snackmaker Saray Biskuvi will set up a USD 8 mn food manufacturing facility, creating 450 direct jobs. The new plant will export 90% of its production to international markets.

What they said: With the two new projects, the first phase of the Qantara West Industrial Zone will now house eight projects with total investment of USD 309 mn, SCZone head Walid Gamal El Din said, adding that the projects will create some 14.2k jobs.

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investment watch Suez Canal Economic Zone West Qantara Industrial Zone

IPO

Egypt’s MO Group eyes IPO

MO Group wants to IPO: Food and beverage producer MO Group for Food Industries is looking to list its shares on the EGX, with plans to switch to a joint-stock company by next March ahead of its planned IPO, Chairman Hamdy Al Abraq told Hapi Journal. The company will initially offer a 35% stake in an IPO, before increasing the stake listed to 60% within the next three years.

(Tap or click the headline above to read this story with all of the links to our background as well as external sources.)

What we know: The funds raised from the listing will help the company fund its expansion plans and improve financial transparency, Al Abraq said. He didn’t mention the number of shares the company plans on listing or the amount to be raised from the listing.

The company plans to invest USD 10 mn to set up new production lines, particularly for biscuit and chocolate products, Al Abraq added, explaining that the company plans to double its monthly production capacity to 6k tons in 2025, half of which will be earmarked for exports.

Big export target for next year: MO Group wants to increase its exports to USD 20 mn for 2025 through penetrating new markets in Latin America, North America and Europe, as well as expanding its reach in African and Gulf countries.

IPOs are a bit of a rarity on the EGX nowadays, but investor appetite seems to be strong, with the only two IPOs to happen this year being heavily oversubscribed. United Bank’s retail offering, which closed earlier this month, was oversubscribed 59x, while the offering’s private placement was covered 6x — raising some EGP 4.57 bn. While earlier in the year, Act Financial’s retail tranche for its EGP 1 bn IPO was 54.8x covered and its institutional tranche was 20.2x oversubscribed — the highest demand a subscription period has seen in six years.

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IPO watch

Development finance

Egypt to see EUR 77 mn from Germany

Egypt and Germany inked grant and debt swap agreements totaling some EUR 77.3 mn to fund development projects in a number of sectors, according to a Planning, Economic Development & International Cooperation statement.

A fruitful Egyptian-German Cooperation Day: The agreements came during the first Egyptian-German Cooperation day, which was held yesterday.

Germany will provide us with a EUR 48.3 mn grant for the Comprehensive TechnicalEducation Initiative, some EUR 16.3 mn will go towards technical support for the second phase of the program and EUR 32 mn will be in financial support for the program’s second phase. The funding will be directed towards building renovations, setting up green facilities, and equipment upgrades for three technical education centres.

The two sides signed a EUR 29 mn debt swap agreement, under which Egypt will use EUR 29 mn owed to Germany to support health, education and nutrition services for vulnerable groups. The funds will go to ministries of social solidarity, health, and education, as well as the UNICEF and World Food Program.

We’ve heard quite a bit about Egypt-bound investments coming from Germany recently, including a EUR 1 bn direct reduced iron factory courtesy of industrial manufacturer SMS Group, a EUR 30 mn flame-resistant material factory from advanced textile material producer Belchem, a A EUR 5 mn first phase of a bicycle parts factory spearheaded by German bicycle manufacturer Cube, and a factory by auto parts manufacturer Mutares Group that came to light during Investment Minister Hassan El Khatib’s trip to the country late last month.

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debt swap development finance Egypt-Germany relations

DEBT WATCH

Egyptian lenders back bns in energy and port expansion loans

A busy day for debt news, with EGP bns of loans announced to fund energy and infrastructure projects.

(Tap or click the headline above to read this story with all of the links to our background as well as external sources.)

#1- Cheiron secures USD 80 mn to fuel exploration operations: Local energy giant Cheiron Energy secured central bank approval for a USD 80 mn syndicated loan, arranged by the National Bank of Egypt (NBE), Banque Misr, Banque du Caire, Al Baraka Bank, and the Arab International Bank, Shorouk News reports.

The loan will fund Cheiron’s exploration activities, in line with its plan to ramp up production by 20% in 2025.

#2- Petrotrade lands EGP 8 bn loan to fund energy imports: A five-bank syndicate has approved an EGP 8 bn loan for state-owned Petrotrade to fund the import of petroleum products for the Egyptian General Petroleum Corporation (EGPC), Shorouk News reported, citing sources with knowledge of the transaction.

The details: The syndicate — which includes NBE, Banque Misr, Banque du Caire, AAIB, and Qatar National Bank — is expected to finalize the loan agreement before year-end.

#3- Abu Qir Port expansion gets EGP 2.8 bn boost: Gharably Integrated Engineering Company (GIEC) secured a EGP 2.8 bn syndicated loan to fund the Abu Qir Port expansions, Shorouk News reported. The loan was managed by NBE, with participation from Banque Misr, Banque du Caire, CIB, and Bank NXT and is expected to close by 1Q 2025.

The fresh funds will cover additional works after revisions increased the project’s total investment from EGP 19 bn to 28 bn and extended its timeline by 30 months.

#4- Damietta Port Authority secures EGP 1.3 bn, long-term loan from the Suez Canal Bank to fund the development and expansion of the port, Al Ma l reports citing unnamed sources in the know.

Tags:

debt watch energy infrastructure

Moves

inDrive appoints Fady Soliman as Egypt country manager

inDrive appoints new Egypt country manager: Global ride-hailing app inDrive has tapped Fady Soliman (LinkedIn) as its new Egypt country manager, Soliman announced on LinkedIn. Soliman has previously held roles at Jumia Group and Economic Co. Electric.

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inDrive moves

LAST NIGHT’S TALK SHOWS

El Sisi meets with armed forces, police, media officials

One story dominated the airwaves last night: President Abdel Fattah El Sisi met with armed forces and police officials as well as journalists and media professionals yesterday, where he touched on a number of issues.

(Tap or click the headline above to read this story with all of the links to our background as well as external sources.)

During his meeting with the armed forces, police and various security agencies leaders, El Sisi discussed “developments on both the regional and international arenas and their ramifications on Egypt’s national security … [and] efforts by the armed forces, civil police, and apparatuses in safeguarding Egypt’s borders and internal front against various threats,” according to an Ittihadiya statement.

El Sisi also affirmed that “Egypt is closely monitoring the regional and international developments, grounded in the fundamentals of Egypt’s foreign policy.“

The meeting caught the attention El Hekaya’s Amr Adib (watch, runtime 28:53) and Ala Masouleety’s Ahmed Moussa (watch, runtime 3:59)

El Sisi held a separate meeting with media figures, where he discussed developments in Gaza, Syria, Lebanon, Libya, Sudan, Somalia, and Yemen, according to a separate Ittihadiya statement.

“There is communication with the new US administration, and there is a level of mutual trust between both sides. Our views are appreciated and accepted by them, and we will build on that to find solutions to unresolved regional issues,” El Sisi said during the meeting (watch, runtime 7:59).

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Abdel Fattah El Sisi LAST NIGHT’S TALK SHOWS

Also on our Radar

Hill International will reportedly manage Giza Zoo development

LEISURE-

Hill International has been tapped to manage Giza Zoo development: Hadayieq, the firm leading the Giza Zoo revamp, has reportedly tapped US-based construction consultant Hill International to manage the development of the Giza Zoo and the nearby Orman botanical garden, Shorouk News reports, citing what it says are sources in the know. The consortium responsible for the revamp has so far secured EGP 800 mn for the EGP 1.4 bn project, which will transform the dated zone into an open-range, no-cage touristic attraction.

(Tap or click the headline above to read this story with all of the links to our background as well as external sources.)

Want the details? We had spoken to Hadayieq Chairman Mohamed Kamel to learn more about the overhaul and the timeline for its completion in a HardHat published late last year.

PRIVATIZATION-

Misr Aswan Fishing gears up for privatization: Some 14 public and private companies, including National Bank of Egypt and Arab Contractors, have reportedly authorized the Sovereign Fund of Egypt (SFE) to sell their stakes in Misr Aswan Fishing to a strategic investor, Shorouk News reports, citing what it says are sources with knowledge of the matter. The SFE will likely target a local buyer.

FINTECH-

Beltone Leasing joins FCI: Beltone Holding subsidiary Beltone Leasing and Factoring has joined the Global Representative Body for Factoring and Financing of Open Account Domestic and International Trade Receivables FCI, according to a company press statement (pdf ). Connecting over 400 global members from 90 countries, the FCI facilitates cross-border cooperation. Beltone’s FCI membership will help it access tech platforms that will enhance its presence in international trade and supply chains.

What they said: “[The membership] strengthens our international expansion strategy by leveraging global expertise and the extensive network provided by the organization. Furthermore, the organization's statistics and market studies will provide us with deeper insights into industry trends and challenges, supporting our strategic plans to deliver superior financial solutions to our clients,” Deputy Head of NBFIs for Leasing, Factoring, and Consumer Finance Amir Ghannam said.

REAL ESTATE-

Al Qalaa to redevelop Granada complex: Real estate developer Heliopolis Housing and Development (HHD) has chosen Al Qalaa for Asset Management to redevelop the historic Granada building in Heliopolis, according to an EGX disclosure (pdf). HHD will be entitled to 30% of the project’s revenues in its first year and 40% of revenues in its second year. Al Qalaa’s offer “preserves the heritage and historical value of the Granada Complex.”

Remember: The building was reopened following a EGP 47 mn redevelopment project in the works since 2017. Al Qalaa can redevelop the building into areas suitable for cultural and tourism activities, exhibitions, and parties, as well as a high-level restaurant.

RECYCLING-

The country’s first cardboard recycling plant: Global packaging solutions giant Tetra Pak and local cardboard manufacturer Uniboard have inaugurated a EUR 2.5 mn cardboard recycling plant — Egypt’s first — in Sadat City, according to an Environment Ministry statement. The plant should reach its maximum annual capacity of 8k tons of cardboard within five years.

M&A-

The details of CI Capital’s exit from Taaleem: CI Capital earlier this week exited its strategic stake in higher education outfit Taaleem after a five-year investment period, achieving 4.5x return on equity and an internal rate of return of 50%, according to a company statement (pdf). CI Capital sold its stake in Taaleem in a EGP 956.6 mn transaction, according to EnterpriseAM calculations.

REFRESHER- Palm Hills Development and El Tarek Automotive bought up CI Capital’s entire 13.1% stake in Taaleem, raising their ownership in the firm to 32.6% and 14% respectively.

INVESTMENT-

Local real estate developer Al Ashraaf Developments is looking to invest EGP 1.25 bn to set up 10 new gas stations, CEO Ahmed Massoud said during a presser. The company has already built six stations worth some EGP 700 mn, with plans to set up four more in 1Q 2025 in Sheikh Zayed and New Obour cities.

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ALSO ON OUR RADAR Beltone Leasing and Factoring Fintech Heliopolis Housing and Development investment watch M&A Watch privatization watch real estate recycling Sovereign Fund of Egypt

PLANET FINANCE

BTC hits another record on news of a first-of-its-kind US BTC strategic reserve

BTC hit a fresh record of USD 105k yesterday after legislation was introduced in Texas that would, if passed, set up a strategic reserve for the digital currency. The rules would allow the state to accept taxes, fees and donations in BTC that would be held for a minimum of five years, Reuters and CNBC report. Also yesterday, president-elect Donald Trump said that he would look into setting up a strategic BTC reserve at the federal level.

(Tap or click the headline above to read this story with all of the links to our background as well as external sources.)

In context: The news comes following a rally that saw BTC climb over 50%, spurred on by Donald Trump’s election in the US, and saw it hit the USD 100k milestone for the first time this month.

It’s not the first time we’ve heard of this: In July 2024, Trump initially touted the idea of a strategic national BTC reserve, predicting the digital currency could surpass gold's market capitalization of USD 16 tn.

The US is not alone: The possibility of a US BTC reserve has gained traction following similar moves by Russia, where lawmakers are advocating for a national BTC reserve as an alternative to foreign currency reserves. Analysts predict that BTC’s price could reach as high as USD 800k by the end of next year, resulting in a market capitalization of approximately USD 15 tn, Forbes reports.

SIGN OF THE TIMES? Shares of OQ Base Industries fell 3.6% in Oman yesterday, becoming the third regional IPO in a row to disappoint in their trading debut. Talabat’s USD 2 bn IPO saw its shares on the Dubai Financial Market dip 7% on opening day, while shares of retailer Lulu closed flat in their first day on the ADX.

Background: State-owned OQ sold a 49% stake in methanol producer OQ Base Industries in a transaction worth USD 489 mn before the start of trading, pricing the offering at the top of the range.

Advisors: Morgan Stanley, Bank Dhofar and Bank Muscat quarterbacked the offering.

MARKETS THIS MORNING-

Asian markets are mixed after South Korea’s president was impeached over the weekend, and as investors await key interest rate decisions from the Bank of Japan and the People’s Bank of China. South Korea’s Kospi is hovering near the flatline, while Kosdaq is up nearly 0.7%. Japan’s Nikkei is also up, while China’s CSI 300 and Hong Kong’s Hang Seng are both down.

Over on Wall Street, futures are calm following a losing week for the S&P 500 and the Nasdaq.

EGX30	30,776	-0.1% (YTD: +23.6%)
USD (CBE)	Buy 50.73	Sell 50.87
USD (CIB)	Buy 50.75	Sell 50.85
Interest rates (CBE)	27.25% deposit	28.25% lending
Tadawul	12,060	-0.3% (YTD: +1.1%)
ADX	9,265	-0.1% (YTD: -3.3%)
DFM	4,830	+0.4% (YTD: +19.0%)
S&P 500	6,051	0.0% (YTD: +26.9%)
FTSE 100	8,300	-0.1% (YTD: +7.3%)
Euro Stoxx 50	4,968	+0.1% (YTD: +9.9%)
Brent crude	USD 74.49	+1.5%
Natural gas (Nymex)	USD 3.28	-5.1%
Gold	USD 2,676	-1.2%
BTC	USD 102,645	+1.6% (YTD: +143.1%)

THE CLOSING BELL-

The EGX30 fell 0.1% at yesterday’s close on turnover of EGP 3.1 bn (26.3% below the 90-day average). Local investors were the sole net buyers. The index is up 23.6% YTD.

In the green: Cleopatra Hospitals (+3.3%), Faisal Islamic Bank - USD (+1.9%), and ADIB (+1.8%).

In the red: Juhayna (-1.9%), TMG Holding (-1.8%), and Egypt Kuwait Holding - EGP (-1.2%).

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crypto Donald Trump Financial Markets Planet Finance

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BLACKBOARD

Diving into the government’s plan for national universities

Egypt to set up more national unis as gov’t works to enhance higher education access: The Madbouly government is ramping up its efforts to set up more national universities in response to growing demand and shifting market dynamics. The Higher Education Ministry is planning to add eight new national universities to the current roster of 20, aiming to meet the increasing demand for affordable, high-quality education, ministry spokesperson Adel Abdel Ghaffar told EnterpriseAM.

(Tap or click the headline above to read this story with all of the links to our background as well as external sources.)

Where will we see these new universities? The eight new universities set to open next year include campuses in Cairo, Kafr El Sheikh, Sohag, and New Valley.

National universities at a glance: Some 55k students enrolled in national universities during the current academic year, representing a 34% y-o-y increase. National universities across Egypt offer 410 programs across 200 faculties, covering fields such as medicine, engineering, and humanities.

SOUND SMART: While both state and national universities are public universities operating under the supervision of the Supreme Council of Universities, state universities typically have higher admission thresholds and larger student bodies, while national universities offer smaller class sizes and more modern curricula. National universities also tend to have higher tuition fees and pricier accommodation compared to the more affordable, traditional housing at state universities.

In line with market needs: National universities continue to reduce the gap between public and private universities by offering modern systems and labor-market-focused programs. Many programs are designed in collaboration with industry to prepare graduates for the workforce. For example, Helwan National University offers 22 specialized programs, including medicine, pharmacy, and digital transformation, and serves 10k students, according to Helwan University president Sayed Kandil.

Why are students flocking to national universities? National universities have become an attractive option due to their lower entry requirements — 5% below public universities — and mid-range tuition fees that fall between public and private universities. These institutions also offer credit-hour systems, operating on a two-semester model. They maintain close ties to established public universities and offer programs of similar qualities, which enhances their credibility among students and parents, President of the Egyptian E-Learning Universities Hisham Abdelsalam told EnterpriseAM.

Looking to international players: National universities are following private institutions in establishing collaborations with international universities. Institutions like Galala University and King Salman University offer dual degrees through agreements with global players such as Arizona State University and the University of Louisville.

The private sector could play a bigger role: To enhance investment, the government is exploring private sector participation in establishing and managing national universities. According to a government source, legal frameworks now allow private entities to enter the sector under similar regulations, including tuition caps and admission policies.

Challenges remain: While the expansion has been significant, challenges like achieving international accreditation, addressing high living costs for students, and bridging rural-urban disparities in access persist.

REMEMBER- National universities recently underwent some changes after the cabinet approved draft amendments to the law governing private and national universities that introduce the foundation year system. The amendments allow high school students who wish to enter a specific college without meeting admissions criteria to join a foundation year beginning academic year 2024-25.

DIG DEEPER- We took a look at how the education sector is preparing for the foundation year system in a Blackboard published earlier this year.

Looking ahead: The government’s long-term strategy sees more private sector involvement in the establishment and management of national universities, with plans to introduce incentives to encourage investment in underserved areas.

Your top education stories for the week:

The Higher Education Ministry has invested EGP 10 bn in upgrading the digital infrastructure of public universities as part of its efforts to integrate AI in the learning process to support students. (Statement)
The Egyptian Trade Union Federation launched an initiative to qualify 1 mn workers to work inF the digital economy. The initiative will offer workshops aimed at equipping workers with the digital skills to address labor market challenges.(Statement)
FSI, IEB offer master’s degree in financial markets: The Financial Regulatory Authority’s Financial Services Institute has partnered with Spain’s Institute of Stock Market Studies (IEB) to offer a master's degree in financial markets. The program aims to equip students with advanced knowledge of global financial practices. (Statement)

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Blackboard Education Higher Education Ministry

CALENDAR

2024

DECEMBER

12-21 December (Thursday-Saturday): Turathna handicrafts and heritage exhibition, Egypt International Exhibitions Center, Cairo

15-17 December (Sunday-Tuesday): Nebu Expo for Gold & Jewelry, Cairo, Egypt

16-17 December (Monday-Tuesday): Mining World Conference 2024, London, UK

22 December (Sunday): The Nahda University Economic Forum’s third edition is set to take place

22 December (Sunday): Waha Connect 2024, New Assiut Technology Park, Egypt

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

EVENTS WITH NO SET DATE

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

2025

January: CBE to launch InstaPay remittances for Egyptians abroad

February: Orascom Pyramids Entertainment to bring total investments in the Pyramids Plateau to EGP 1.5 bn

1 January (Wednesday): The minimum pension will increase to EGP 1.5k, and the maximum to EGP 11.6k

14 January (Tuesday): The 4th edition of the Egypt Economic Summit will take place.

28 January (Tuesday): Nigeria to inaugurate the USD 5 bn Africa Energy Bank in Abuja

17-19 February (Monday-Wednesday): EGYPES Technical Conference, Egypt International Exhibition Center, Cairo, Egypt.

18-19 February (Saturday-Sunday): German-Egyptian Joint Economic Committee meetings, Cairo, Egypt

7-10 April 2025 (Monday-Thursday): EFG Hermes One on One conference, Dubai, UAE

May 2025: Egyptian Exporters Association (Expolink) exhibition, Italy

May 2025: French rolling stock manufacturer Alstom will submit technical and financial bids for Cairo Metro Line 6.

July 2025: The first operational trail of Egypt-KSA electricity interconnection line.

March 2025: Operation of phase one of the Amotope wind farm

EVENTS WITH NO SET DATE

Early 2025: The Communications Ministry will unveil the second edition of its national AI strategy in early 2025

1H 2025: Digital Financial Identity Company will launch an electronic bank account opening service

1Q 2025: Eipico’s biopharma plant to begin operations

1Q 2025: Finance Ministry to launch public consultations on its tax policy document

2Q 2025: Financial Regulatory Authority (FRA) to introduce derivatives on the EGX

2Q 2025: Safaga Terminal 2 to start operations

Mid-2025: The Administrative Capital for Urban Developments to roll out the second phase of offering industrial plots to investors

2025: The InterAcademy Partnership assembly

2025: Nile Basin States Summit, Cairo, Egypt

2025: Release of the government’s Startup Charter document

2027

20 January-7 February: Egypt to host the African Games

EVENTS WITH NO SET DATE

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

September 2028: First unit of the Dabaa nuclear power plant begins operations

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