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Tuesday, 13 Jun 2023

What We're Tracking Today
Legislation Watch
M&a Watch
Commodities
Last Night’s Talk Shows
Egypt In The News
Also On Our Radar
Planet Finance
Around The World
Going Green
Calendar

FY 2023-2024 budget gets final approval from the House of Representatives

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Today at a glance

1

LEGISLATION WATCH

 MPs give their final stamp of approval to the FY 2023-24 budget.
2

M&A WATCH

 Greek Campus, MQR to join forces in merger.
3

Commodities

 India has not extended a line of credit to Egypt — but INR trade is in the works.
4

LAST NIGHT’S TALK SHOWS

 Some City of the Dead tombs to be rehoused in new Cemetery of the Immortals.
5

ALSO ON OUR RADAR

 EgyptAir is launching new flights to the UK, India.
6

What We're Tracking Today

 Iraq’s PM is in Cairo to sign a slew of cooperation agreements.
7

PLANET FINANCE

 EM bulls still think this could be their decade + QIA on the expansion track.
8

AROUND THE WORLD

 Saudi Arabia and China seal their friendship with USD 10 bn in investment agreements + Putting the US back in UNESCO.
9

Going Green

E-scooters may be green, but can they change how we travel?

Tuesday, 13 Jun 2023

What We're Tracking Today
Legislation Watch
M&a Watch
Commodities
Last Night’s Talk Shows
Egypt In The News
Also On Our Radar
Planet Finance
Around The World
Going Green
Calendar
1

What We're Tracking Today

Iraq’s PM is in Cairo. PLUS: EGX trading to resume today after glitch + US Fed meetings kick off

Good morning, wonderful people, and happy hump day. The news cycle is giving us a slight breather after a hectic start to the week — but there’s still plenty going on.

THE BIG STORY here at home: Next year’s fiscal budget will soon be signed into lawafter MPs gave it their final stamp of approval yesterday. The budget debate was short but not all that sweet, with several opposition and independent MPs voicing their worries over high levels of government borrowing. We have the full story in our Legislation Watch section, below.

AND- The EGX is back: Trading on the EGX will resume today after a technical glitch caused the system to go down yesterday afternoon, the bourse said in a bulletin. The bourse yesterday denied rumors that the disruption was caused by a cyberattack and said it was working with Nasdaq to resolve the issue. Enterprise was unable to reach an EGX representative for comment yesterday.

EGX boss Ramy El Dokany yesterday took to the airwaves to confirm there was no foul play at work, telling Kelma Akhira’s Lamees El Hadidi that technical glitches are common across global exchanges(watch, runtime: 4:29). Transactions that took place before trading came to a halt yesterday have been executed and traders’ data is secure, he said. The topic was also covered by Lubna Assal on Al Hayah Al Youm (watch, runtime: 4:28).

The Enterprise Finance Forum is our flagship gathering — the one so many of you have been waiting for. The two-day event takes place this September and will be the latest in our must-attend series of invitation-only, C-suite-level gatherings. Stay tuned for more information on the location.

TAP OR CLICK HERE if you want to express interest in attending. We’ll be sending out the first batch of invitations just after the 30 June holiday.

Do you want to become a commercial partner? Email mtaalab@enterpriseadvisory.com.

STAY TUNED for more detail about our exciting agenda in the weeks to come.

HAPPENING TODAY-

Iraqi PM in Cairo: Iraqi Prime Minister Mohammed Shia Al Sudani arrived in Cairo yesterday ahead of today’s Iraqi-Egyptian joint higher committee meeting, according to a cabinet statement. Prime Minister Moustafa Madbouly and Al Sudani are expected to sign some 10 MoUs in the fields of reconstruction, housing, labor, and sports, and to preside over a bilateral business forum. International Cooperation Minister Rania Al Mashat yesterday met with Iraqi Trade Minister Atheer Al Ghurairy to lay the groundwork for the signing of the agreements.

In the House: The House of Representatives will hold plenary sessions today on a number of foreign agreements. They include two grants from the European Bank for Reconstruction and Development to renovate the Cairo Metro, and one to expand the Takaful and Karama program; bills on Egypt’s membership of the African Continental Free Trade Agreement and the African Space Agency; and five laws licensing the Oil Ministry to contract the Egyptian General Petroleum Corporation and foreign companies to explore for oil in the Med.

DATA POINTS-

#1- More than 194 kg of gold entered Egypt in 30 days: Egyptians have brought more than 194 kg of gold into the country since the government relaxed customs rules in a bid to stabilize the gold market, the Finance Ministry said yesterday. Under the new rules, Egyptians living abroad are able to bring up to 100-150 grams of gold into the country without paying customs fees.

Gold prices are still elevated: The price of 21-carat gold has risen 50% to EGP 2,560 per gram since the beginning of the year as savers look for safe havens to hedge against the weaker EGP.

#2- GDP time machine: The Planning Ministry has released GDP data going back more than four decades, it said in a statement yesterday.

THE BIG STORY ABROAD-

Most of the international press is focused on Florida, where former US president Donald Trump is today scheduled to make his first appearance in a Miami court on federal charges including the alleged mishandling of classified documents. A Reuters/Ipsos poll found a vast majority of Republicans believe the case is politically motivated. (Washington Post | NYT| AP).

The business press is all about the Fed: The US Federal Reserve is expected to keep itsbenchmark interest rate unchanged within the 5.0-5.25% range following its two-day policy meeting, which kicks off today. This would be the first pause since the central bank began aggressively tightening policy in March last year, which has seen rates rise 500 bps.

It’s a tough call: The Fed has to make a difficult choice between holding rates steady to avert further pressure on a strained banking system, and continuing to hike rates to stamp out inflation. “They’re between a rock and a hard place,” former Reserve Bank of India Governor Raghuram Rajan told the Wall Street Journal. Complicating matters: Uncertainty around the likelihood of a recession and the ongoing threat of stagflation, writes the Financial Times.

But there’s positive mood music in the business pages: The S&P 500 and the Nasdaq both closed at their highest in more than a year yesterday as investors anticipated a pause in rate hikes, the Wall Street Journal, FT, and Reuters report. The heads of investment banking giants Morgan Stanley and Goldman Sachs both told the FT they’re seeing “green shoots” in the business environment.

FACT CHECK-

Aldar isn’t acquiring Capital Group Properties (FKA Imkan Misr):Emirati real estate giant Aldar Properties has denied a media report claiming that it had entered negotiations to acquire Capital Group Properties (CGP),CNBC Arabiareports, citing company sources. Asharq Business reported yesterday that Aldar is in talks to acquire the company in light of the “massive losses that [CGP] has lately incurred thanks to the devaluation of the EGP and the rise in construction costs,” quoting one of two unnamed sources who it said was in the know. These challenges were compounded by the company's decision to offer installment plans over 14 years, the source added.

ICYMI-

Missed this week’s Inside Industry? In our weekly vertical exploring all things industry and manufacturing, we talked to glass manufacturer Pyramid Glass in the first installment of a new monthly series where we profile home-grown and international manufacturers in Egypt.

CIRCLE YOUR CALENDAR-

Green projects have more time to apply for Smart Green Projects round 2: The application deadline for the second iteration of the Smart Green Projects initiativehas been extendeduntil the end of June.Eligible projects must use tech solutions to address environmental issues, present evidence of feasibility or innovation, and provide a written acknowledgement that no awards have been received during the first round of the initiative, among other requirements. Eligible projects can apply here.

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

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. Today, we run four daily Egypt and MENA-focused publications, five weekly industry verticals, and a weekend lifestyle edition designed to make our readers feel just a bit smarter.

We have tons more in the pipeline — come help us build new publications. We offer the chance to work in a fast-paced newsroom on a broad range of topics and in a variety of formats. Our goal is simple: To create value for our growing community of >250k daily readers by telling stories that matter.

Journalists looking to explore business, finance and economic stories are welcome. So are recent journalism school graduates.

That said, we're looking for gifted story-tellers from all walks of life and across all professions, as long as they show a keen interest in learning to write about the stories, topics, businesses, and figures moving markets. Egyptian and foreign nationals alike are welcome to apply. So are job-switchers: If you’re an equities analyst tired of the rat race, we’re a great place to come work.

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.

During the program you will learn:

  • The key news stories and trends shaping business and the economy in Egypt and the region, across various sectors;
  • Business and finance for non-finance people: Whether it's industry jargon or key concepts or simply how to read a balance sheet;
  • How to construct an Enterprise story: From idea formulation down to the structure, style and tone of writing;
  • How to develop sources that will give you the key insights needed to tell a complete story;
  • How to communicate these stories with the confidence and language of an insider.

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 “writing development program” in your subject line.

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

In today’s issue: E-scooters are proliferating on the streets of certain Cairo neighborhoods. But are they a viable means of transport in our overcrowded capital?

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2

LEGISLATION WATCH

Egyptian MPs give their final approval to FY 2023-24 budget, development plan

That’s a wrap on the budget: The House of Representatives yesterday gave its final approval to the FY 2023-2024 budget and socioeconomic development plan after just two days of debate. Majority parties Mostaqbal Watan and Protectors of the Nation (Homat El Watan) — who together hold more than 350 of the chamber’s 596 seats — voted in favor of both the budget and the plan.

Approval among MPs was not unanimous: Wafd Party spokesman Mohamed Abdel Alim Daoud and Justice Party chair Abdel Moneim Imam yesterday said they were rejecting the budget, criticizing its “excessive borrowing.” Two other opposition parties, the Egyptian Socialist Democratic Party and the Reform and Development Party, had rejected the budget on the first day of the debate on the same grounds. Several independent MPs also took to the floor yesterday to criticize the government for its wider handling of the economic crisis —- with independent rep Mahmoud Badr saying the cost of living crisis meant that affording foods like red meat had become a “dream” for most people.

REMEMBER- The debt issue has made next year’s budget a controversial one among lawmakers. Gov’t spending is set to rise 34% y-o-y in FY 2023-24, with debt servicing marking the single biggest component of that. Amid a cost of living crisis, the government is also upping spending on social safety programs and subsidies, as well as on wages, commodity purchases, social support, public investment, education and health. The Madbouly cabinet is targeting a 7% budget deficit next fiscal year, down from a projected 8% this fiscal year.

Maait responded to critics: Finance Minister Mohamed Maait defended the budget to MPs at the end of the debate, pointing to the “exceptional” global economic challenges created by a high-inflation, high-rate environment in the wake of the Russia-Ukraine war. Interest rates on government borrowing have more than doubled to some 24%, Maait said. “We expect inflation and interest rates to drop at the end of the current year and when this happens we will do our best to make sure that society reaps the benefits,” he said.

FinMin has more in the pipeline to boost fiscal discipline: Maait said the executive regulations of the Unified Budget Act would be issued within weeks, after they’ve been reviewed by the IMF and other authorities. The bill, which was ratified last year, requires the government to present an annual medium-term budgetary and fiscal strategy to the House and set spending limits for each ministry. A cabinet committee is also working on turning around several loss-making government entities including the National Railway Authority, the National Media Authority, and the National Tunnels Authority, Maait added.

What’s next? The budget will now be sent to President Abdel Fattah El Sisi to ratify.

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3

M&A WATCH

Shareholders of the Greek Campus, MQR join forces to form a merger entity

Greek Campus, MQR are now one: The Greek Campus and coworking space provider MQR have entered into a definitive merger agreement, creating what they say is the MENA region’s largest community of entrepreneurs. The agreement, inked by Greek Campus founder and chairman Ahmed El Alfi and MQR co-founder and CEO Muhammed Nagi, will see both organizations continue to operate independently under a single board, the companies said in a joint statement (pdf).

The new entity in numbers: The newly-established company has more than 50k sqm of commercial space in 14 locations across Egypt and a network of more than 3.5k entrepreneurs representing 450+ companies, according to the statement.

Everything's coming together in one combo: “All the shareholders of both entities will stay involved and will become shareholders in the new entity,” Al Alfi told Enterprise yesterday, confirming that “it’s not an acquisition of one company or the other.” The new entity has “two strong management teams of both brands joining together,” said Al Alfi, without disclosing the board’s composition. He declined to reveal the shareholder structure of the new entity.

Turnkey solutions in the pipeline: The company will roll out over the next 12 months a “brand-new workspace concept” and new furnishing and procurement services, according to the statement. “We’ll have a division that will provide turnkey solutions to companies that want to come in and set up quickly and be asset-light,” Al Alfi said.

An all-in-one website: Greek Campus members will soon be able to work remotely in any of the locations provided by the newly-established entity via a unified online platform set to go live before the end of the year, according to Al Alfi. The website will provide access to exclusive events, investor nights, and a new set of resources to members, Nagi told us yesterday.

The company could look to attract new investment next year: “We are looking to expand our locations to new areas, and maybe raise capital in the beginning of next year for that purpose,” Al Alfi told us. “Alexandria could be the newest addition to the current cities both entities operate,” he said, explaining that Alex has the largest underserved population for both brands. The companies currently have a presence in Cairo, Sheikh Zayed, Gouna, Menofia, and Aswan.

What’s next: There’s a possibility that “the new entity adds additional brands,” Al Alfi said, without providing further details.

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4

Commodities

India has not extended credit line to Egypt -El Moselhy

No line of credit has been opened with India, Supply Minister Ali El Moselhy told Reuters, after Bloombergquoted him as saying that the country would provide us with a loan of unspecified value. "Nothing of the sort has been implemented but there are discussions so that we can trade in local currencies of countries like India, Russia or China," El Moselhy told Reuters. Intergovernmental credit lines are typically used in the import of key commodities such as food.

We knew trade in INR was on the table: El Moselhy and Indian officials have in recent months said that the two countries were looking into trading in INR rather than the USD, as a way to mitigate the impacts of the USD crunch and tighter US monetary policy. Egypt is also working on similar moves with Russia and China.

Egypt and India have worked to strengthen ties in recent years: Food security was among the topics of discussion when President El Sisi held talks with Indian Prime Minister Narendra Modi in New Delhi earlier this year. Modi is expected to visit Egypt later this month, Indian media reported last week.

We have been receiving int’l loans for food imports: The International Islamic Trade Finance Corporation (ITFC) last week extended us a USD 700 mn loan for grain purchases. The World Bank has also helped pay for wheat imports via a USD 500 mn loan approved last year.

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5

LAST NIGHT’S TALK SHOWS

A potential compromise in the City of the Dead controversy

It was a mixed bag on the talkshows last night, with yesterday’s EGX malfunction and the City of the Dead redevelopment both getting wide coverage.

Yesterday’s glitch in the EGX system got coverage from plenty of the talking heads last night, with EGX boss Rami El Dokany appearing on several programs to explain what went down. We have the rundown in What We’re Tracking Today, above.

Cemetery of the Immortals to replace City of the Dead? Some of the country’s most iconic late figures could find their final resting place in the Cemetery of the Immortals, a new site where tombs and mausoleums from Cairo’s City of the Dead will be rehoused, according to an Ittihadiya statement. The proposal for the new cemetery comes after public outcry over the pllanned demolition of parts of the historic City of the Dead and its surrounding area to make way for a flyover, putting the tombs at risk. Ala Mas’ouleety (watch, runtime: 7:04) and Masa’a DMC (watch, runtime: 4:45) had coverage.

Could some tombs stay put? A prime ministerial committee will reassess the situation and make a decision by 1 July regarding the transfer of tombs in the area of ​​Sayeda Nafisa and Imam Al-Shafi'i, the Ittihadiya statement reads. Kelma Akhira’s Lamees El Hadidi said “development should not be at the expense of history” watch, runtime: 4:27 | 5:13). Hadidi and Masa’a DMC’s Ramy Radwan previously issued pleasto the authorities to reconsider options to carry out their development plans.

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6

EGYPT IN THE NEWS

Three British tourists in Egypt’s Red Sea boat fire confirmed dead. PLUS: UN raises alarm over arrest of migrants in Libya

Leading the conversation on Egypt internationally this morning: The three British tourists who were declared missing after a diving boat caught fire off the Red Sea coast died in the blaze, tour operator Scuba Travel said in a statement shared with the press. Twelve divers and 14 crew members were rescued from the vessel, which authorities said appears to have caught fire due to an electrical short circuit. The deaths, coming only days after a Russian tourist was killed in a shark attack in Hurghada, have some questioning safety standards in the tourism industry, write the Telegraph and Arab News. (Reuters | The Guardian | The Independent | The Times | Sky News | CNN)

Also making headlines:

  • A wave of arrests of migrants and asylum seekers in Libya has prompted concern from the country’s UN mission. Thousands of Egyptian migrants were deported on foot across the land border back to Egyptlast week. (Reuters)
  • Moustafa Bassiouni, a photo assistant and driver who worked with the Associated Press Cairo bureau for nearly three decades, has died after suffering a heart attack. (AP)
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7

ALSO ON OUR RADAR

New EgyptAir flights to UK, India. PLUS: Stllr x Payoneer + New Abu Soma hotels in Hurghada + PM Madbouly’s localization, investment drive + NoorNation picked for PepsiCo accelerator + Vodafone Egypt goes green

TOURISM-

EgyptAir will launch two new routes to Manchester, England, and New Delhi, India, in the coming months as part of the government’s efforts to stimulate tourism, it said in a statement (pdf) yesterday. The flag carrier will start operating five weekly flights between Cairo and Manchester from July, while four weekly flights to the Indian capital will go live in August.

FINTECH-

Stllr pairs up with Payoneer: Local outsourcing startup Stllr Network has partnered with Payoneer to enable its network of marketing professionals to access the US fintech company’s payment platform, the firms said in a joint statement (pdf). Stllr will be able to make real-time settlements with their clients and users will be able to securely receive global payments in multiple currencies from clients around the Middle East, the statement said. Stllr provides a range of services including SEO, media buying, copywriting and social media for its clients, across Egypt, Saudi Arabia and the UAE, and last year closed a six-figure USD investment round.

HOSPITALITY-

Somabay developer to build two new hotels: Abu Soma Development Company (ASDC) plans to invest EGP 1.6 bn to build two hotels in Hurghada, Al Borsa reports, citing CEO Ibrahim El Messiri. The Somabay developer will complete the first hotel by September 2024 while the second will open in 2025. The two hotels will have a capacity of 380 keys, El Messiri said.

MANUFACTURING-

Madbouly gathers suggestions from industry, investment heads: Prime Minister Moustafa Madbouly discussed potential incentives to help boost localization across various industries with representatives of the Federation of Egyptian Industries, industrial chambers, and manufacturers, a cabinet statement read. The session is the first of several meetings aimed at gathering proposals to help localize manufacturing. Madbouly also sat down with the board of the Egyptian Federation of Investors Associations to discuss policies to help attract investment to the country, according to a separate statement.

Elsewedy Electric breaks ground on KSA cables factory: Elsewedy Electric has begun construction on a Saudi cables factory that should be up and running within two years, CEO Ahmed El Sewedy is quoted as telling Asharq Business, without detailing the investment cost of the project. The factory will produce materials for the local market, he added.

Elsewedy is keen on Saudi: Elsewedy Electric subsidiary Rowad Modern Engineering has plans to expand in Saudi and lock down a portfolio worth somewhere between SAR 500 mn and SAR 1 bn this year, CEO Mohamed Mahlab told Enterprisein May. Another Elsewedy subsidiary is building a 300-MW solar power station for Saudi Arabia’s Al Ghazala Energy. The company in November approved setting up one or more new companies in the KSA.

STARTUPS-

NoorNation joins PepsiCo MENA accelerator: Local renewable energy player NoorNation has been selected for PepsiCo’s 2023 Greenhouse Accelerator Program: MENA Sustainability Edition, which opened to Egyptian projects for the first time this year. The six selected startups — which also include firms from Jordan, Lebanon, and Tunisia — were chosen from more than 180 applicants across 18 countries. They will each receive a USD 20k grant and mentorship to help them scale. One of the six will also get an additional USD 100k at the end of the six-month program.

PepsiCo aren’t the only ones looking at NoorNation: The startup was showcased in the Planning Ministry’s Smart Green Governorates initiative last year and was among six firms in the scheme that were selected to receive technical support, training and business advisory services from the European Bank for Reconstruction and Development.

TELECOM-

Vodafone Egypt will invest more than EGP 330 mn this yearto operate its network using renewable energy sources, reports Al Mal, quoting Vodafone Egypt External Affairs and Legal Director Ayman Essam. The company has signed a contract with the New and Renewable Energy Authority (NREA) to supply it with electricity from NREA renewable projects and is working to power its operations entirely by renewables by 2025, in line with Vodafone Group targets, Essam said.

It’s not just Vodafone: All four of the country’s telecom providers last week inked agreements with the Madbouly government to purchase green energy to use in their facilities.

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8

PLANET FINANCE

Could EM assets regain lost ground come 2H 2023? PLUS: QIA eyes expansion in Asia, US

EM bulls still optimistic: Bullish investors in emerging markets are holding out hope that the asset class will stage an extended rally later this year and prove correct Morgan Stanley’s recent prediction that the 2020s will be the decade of EMs, according to Bloomberg.

2023 (so far) hasn’t lived up to Morgan Stanley’s expectations: Waning economic activity in China and high global interest rates have continued to put pressure on EM assets, which have significantly underperformed their peers in advanced economies despite a promising start to the year. MSCI’s EM equity index is up 5% so far this year compared to the 11% increase in developed-market assets, while EM local-currency bonds have only slightly bettered a gauge of global debt.

Yes, but: EM assets stand to finally take off in the second half of 2023 as long as global interest rates peak, Chinese authorities support growth and structural reforms in India reassure the market, investors tell the news outlet.

Qatar’s sovereign wealth fund is going up a gear: The USD 450 bn Qatar Investment Authority (QIA) is planning to expand its investment reach into Asia and the US and strengthen its footprint in the tech sector amid expectations for increased inflows from the country’s natural gas revenues, the fund’s CEO told Bloomberg.

Remember: We’re expecting QIA investments in Egypt.Qatar pledged last year to invest as much as USD 5 bn in Egyptian companies as part of wider Gulf efforts to shore up our economy and provide us with vital FX. The QIA is yet to sign off on any acquisitions but reports in the local press last week claimed that it is close to acquiring Telecom Egypt’s 45% stake in Vodafone Egypt.

ALSO WORTH NOTING-

  • UBS finalizes Credit Suisse takeover: Swiss banking giant UBS has completed the acquisition of its embattled competitor Credit Suisse, ending the lender’s 167 years of independence, it said in a statement yesterday. UBS was forced to acquire Credit Suisse in March after it was left on the verge of collapse following turmoil in the global financial system triggered by rising interest rates. Five of the most senior Credit Suisse execs lefthours after the official takeover.
  • Nasdaq makes its biggest acquisition ever: Nasdaq has entered into a definitive agreement to fully acquire financial software maker Adenza in a USD 10.5 bn cash and stock deal from investment company Thoma Bravo. (Reuters)
  • Turkey’s stock market on a post-election tear: The Borsa Istanbul 100 index has gained 25% since the country’s election to hit an all-time high amid optimism that the reelected Erdogan administration will pursue a more conventional economic policy. (Bloomberg)
  • JPMorgan has agreed to pay USD 290 mn to settle a trafficking lawsuit with the victims of the late disgraced financier Jeffrey Epstein. (AP | the Guardian | The Wall Street Journal | CNN | FT | Bloomberg)

EGX30

17,705

-0.2% (YTD: +21.3%)

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

11,423

+0.2% (YTD: +9.0%)

ADX

9,380

+0.1% (YTD: -8.1%)

DFM

3,702

+0.1% (YTD: +11.0%)

S&P 500

4,339

+0.9% (YTD: +13.0%)

FTSE 100

7,571

+0.1% (YTD: +1.6%)

Euro Stoxx 50

4,316

+0.6% (YTD: +13.8%)

Brent crude

USD 72.09

-3.6%

Natural gas (Nymex)

USD 2,27

+0.5%

Gold

USD 1,969.70

-0.4%

BTC

USD 25,912

-0.5% (YTD: +56.8%)

THE CLOSING BELL-

The EGX30 fell 0.2% at yesterday’s close on turnover of EGP 1.27 bn. Local investors were net buyers. The index is up 21.3% YTD.

In the green: Mopco (+20.0%), Credit Agricole (+2.9%) and Taaleem (+2.6%).

In the red: CIB (-2.0%), Telecom Egypt (-2.0%) and Palm Hills Developments (-1.8%).

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9

AROUND THE WORLD

Riyadh, Beijing cement ties with USD 10 bn in mutual investment. PLUS: US to rejoin UNESCO

KSA + China bolster economic ties with USD 10 bn in new investments: Saudi Arabia and China signed investment agreements worth USD 10 bn on the first day of the Arab-China Business Conference in Riyadh on Sunday, the Saudi Investment Ministry said in a statement(pdf) yesterday. The 30+ agreements spanned a slew of sectors including renewable energy, technology, agriculture, tourism, real estate, and healthcare, and come as part of the kingdom’s push to diversify its economy and boost investments in non-oil sectors.

Making the headlines: A USD 5.6 bn MoU that will see the Investment Ministry partner with China’s Human Horizons — which manufactures electric vehicles and develops autonomous driving tech — on EV manufacture, R&D and sales.

Going their own way: Speaking at the conference, Saudi Energy Minister Abdulaziz bin Salman said he “ignores” US objections to the country’s growing ties with China and is focused on collaborating with Beijing rather than competing with it, according to Reuters. “I actually ignore it because ... as a business person .. now you will go where opportunity comes your way,” he said.

MEANWHILE- US to rejoin UNESCO following decade-long absence: The US will rejointhe UN agency and repay over USD 600 mn in dues, more than a decade after it stopped contributing to the agency’s finances due to its decision to make Palestine a member state, the UN agency said yesterday. The move was triggered by concerns over China’s growing influence in the agency’s policy making, US officials told the Associated Press.

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

Published every Tuesday in EnterpriseAM.

Read going Green
10

Going Green

E-scooters are on the rise. Do they represent a trend or a transit revolution?

E-scooters may be green, but can they change how we travel? As the streets of Cairo become increasingly congested, a new mode of transportation is gaining traction among commuters: e-scooters. Though the vehicles have seen a rise in popularity in certain areas of the city such as Zamalek and Maadi, the question remains: are e-scooters merely a passing trend, or do they have the potential to transform Cairo's streetscape for good?

Rabbit Mobility is one company that has gained popularity since launching its services in 2020. “We primarily focused on gated communities when we first started to test operational capacity and technological capabilities,” the company’s co-founder and CEO Kamal ElSoueni tells us. “However, after observing the positive response from users, we expanded our operations to other areas, including Zamalek, Maadi, and Heliopolis. As word spread and demand grew, the company further expanded to other governorates and reached a user base of over 330k by April 2023.”

Location is key: Rabbit Mobility strategically selects areas with high traffic congestion, population density, and limited parking spaces, with locations like Heliopolis, Zamalek, Mohandiseen, Agouza, and Maadi being ideal for e-scooters due to suitable traffic speeds. Yet, other locations such as New Cairo are less suited to the vehicles due to the nature of the roads and the scooters’ limited range, which is typically between 20-25 km, professor of sustainable architecture at AUC Sherif Goubran says.

E-scooters are good for the environment: Unlike traditional cars, e-scooters produce zero direct emissions, contributing to reduced air pollution and carbon emissions in the city. Rabbit, whose app tracks the volume of saved CO2 with each ride, has saved around 65k kg of carbon emissions since January 2022, says ElSoueni. “Despite concerns regarding the environmental impact of lithium-ion batteries, e-scooters have proven to be a greener alternative to the fossil-fuel-burning machines,” he tells us.

But the lack of proper infrastructure and regulation remains a significant challenge: Cairo’s vast and crowded street grid might not be well-suited to accommodate the influx of electric scooters. The absence of designated bike lanes, charging stations, and parking spaces for e-scooters poses safety concerns and inconvenience for riders and pedestrians alike. And unlike cars, they are not registered or licensed.

Solutions could be found abroad: “What we're seeing with the e-scooters in many cases is that it's becoming more endemic, meaning it's becoming very overused and in some cases unregulated, where you walk on some sidewalks and find these e-scooters just lying around obstructing movement,” Goubran says. “But regulations such as dedicated parking locations and fines for scooters outside those areas are becoming common in some cities abroad. Bans and restrictions on the number of operating companies have also been implemented. Considering this global landscape is crucial when discussing Egypt,” he adds.

That’s not to say that there aren’t regulations on companies operating in the sector:E-scooter firms, like other digital transportation companies regulated under recent legislation governing smart transport, have to meet certain conditions to acquire licenses, a government source told Enterprise. Companies have to pay EGP 30 mn and submit safety and operational documentation in order to be licensed.

But is this all a trend? Goubran thinks so, stating that it might not necessarily fill a mobility gap. As a mobility solution, e-scooters have the potential, but it requires strategic considerations in terms of placement, marketing, pricing, and legislation to ensure it doesn't remain solely a leisure activity. “As a resident of Maadi, I have personally used the scooter a few times to travel from my place to a location near my parents' house, for example. However, in many cases, I observe that most users perceive it more as a fun activity, taking it for a few laps until the battery runs out,” Goubran says. “We really have to consider who this is solving an issue for.”

Some people do see scooters as a viable replacement for cars: “Rabbit Mobility’s e-scooters saved me, not only financially but they also saved me time. I rely on them almost everyday to get through Maadi for work if I don’t feel like walking,” according to one user we spoke to. They no longer drive their car or use Uber.

But the nature of the business could hinder the mass adoption of e-scooters for mobility: “It’s definitely a trend,” says Mohamed Mohi El Dien, co-founder of Vesstoss, an e-scooter company that recently went into hibernation after struggling with the tough nature of the business. “Maintenance and operations emerged as the primary challenges that had a detrimental impact on our business,” Mohi El Dien tells us, highlighting the constant replacement of tires, difficulties in replacing batteries, and long charging times as problems for the company. “This limits the potential for e-scooters to become more than just a passing trend in Egypt at the moment,” he says.

The fate of e-scooters in Cairo hangs in the balance: The future of e-scooters in Cairo hinges upon their ability to evolve beyond a passing trend and truly change the way people move through the city. “All in all, I think it has the potential to be a mobility solution, but there are things we have to consider,” Goubran says. “In order to move away from solely providing solutions for areas that are already easily walkable, [e-scooter companies] could incentivize longer trips, encouraging users to travel greater distances. Another option is to incentivize locking and unlocking the e-scooters at different locations or encouraging multiple uses per day,” he suggests.

Your top green economy stories for the week:

  • Masdar-led consortium secures land for mega wind farm: UAE’s Masdar, Infinity Power, and Hassan Allam Utilities signed a land allocation agreement with the government for a 10-GW wind farm in Sohag. The USD 10 bn wind farm is set to be one of the largest in the world.
  • EFG-backed Ignis to sell EUR 300 mn of its solar portfolio: The EFG Holding-backed Spanish renewables developer Ignis Energia is reportedly preparing to sell five solar power projects with a combined capacity of 380 MW and a value of EUR 300 mn.
  • Telcos go green: All four of the country’s telecom providers inked agreementswith the Madbouly government to purchase green energy to use in their facilities.
  • Egypt Post is trialing electric postal delivery vehicles, Al Borsa reports citing CEO Sharif Farouk.
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CALENDAR

JUNE

June: Suez Canal Economic Zone India roadshow.

June: Egyptian-Saudi business forum.

June: Indian Prime Minister Narandra Modi to visit Egypt.

11 June (Sunday): House reconvenes.

11 June (Sunday): National Dialogue.

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

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

13 June (Tuesday): National Dialogue.

15 June (Thursday): National Dialogue.

18 June (Sunday): Senate reconvenes.

19-20 June (Monday-Tuesday): The forum for insolvency reforms and corporate restructuring in the Middle East and North Africa.

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

19-21 June (Monday-Wednesday): Big 5 Construct, Egypt International Exhibition Center.

20 June (Tuesday): Capital Markets Annual Summit, Nile Ritz-Carlton Hotel.

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): Application deadline for the Smart Green Projects initiative.

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.

5 - 6 July (Monday - Tuesday): Gov’t to pay out subsidies to first wave of applicants under its sixth export subsidy program.

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

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 (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.

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.

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.

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.

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

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.

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

6 October (Friday): Armed Forces Day.

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, (Location TBD).

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)

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.

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