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Wednesday, 22 Nov 2023

What We're Tracking Today
War Watch
Economy
Debt Watch
Kudos
Moves
Last Night’s Talk Shows
Also On Our Radar
Planet Finance
Hardhat
Calendar

Gaza to get four-day reprieve after Israel backs hostage-for-ceasefire pact

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Today at a glance

1

WAR WATCH

Gaza to get four-day reprieve after Israel backs hostage-for-ceasefire pact.
2

Economy

Egypt economic growth to accelerate this fiscal year as privatization boosts FDI -BMI.
3

What We're Tracking Today

e-KYC could be coming next year.
4

DEBT WATCH

Emirates NBD Egypt signs EUR 30 mn loan agreement with Hayat Egypt.
5

Also on our Radar

More Saudi investments coming.
6

What We're Tracking Today

Binance CEO CZ steps down after pleading guilty in money laundering case.
7

PLANET FINANCE

Dubai Taxi set to raise USD 315 mn in IPO.
8

What We're Tracking Today

Fed looks set to hold rates, but is still erring on the side of caution.
9

HARDHAT

Gov’t looks to private sector for infrastructure ahead of planned Olympics bid.

Wednesday, 22 Nov 2023

What We're Tracking Today
War Watch
Economy
Debt Watch
Kudos
Moves
Last Night’s Talk Shows
Also On Our Radar
Planet Finance
Hardhat
Calendar
1

What We're Tracking Today

CZ, head of crypto giant Binance, steps down after guilty plea in money laundering case

Good morning, ladies and gents: Before we get started, a quick programming note…

We’re taking a publication holiday tomorrow (Thursday, 22 November) to allow our team to work ahead on a couple of new projects — and to get a bit of extra shuteye. EnterpriseAM, EnterprisePM, Enterprise Climate, and Enterprise Logistics will all be off, but our Weekend Edition will appear as usual on Friday morning. We’ll be back to our customary schedule on Sunday. Happy Thanksgiving to all of our readers celebrating.

WATCH THIS SPACE-

We’re hoping for news today and tomorrow of additional Gulf investment in Egypt, particularly in manufacturing, real estate, and tourism, as the EGY-GCC Business Forum kicks off today. The gathering, which wraps tomorrow, is expected to be well-attended by Gulf and Egyptian business leaders.

Saudi investors have over 150 Egyptian projects to pick and choose from: The Madbouly government showcased over 150 investment ideas to Saudi investors yesterday during the Saudi-Egyptian Business Council, head of the Trade Ministry’s Commercial Representation Authority Yehia El Wathek Bellah told Al Arabiya (watch, runtime: 4:49). Saudi Minister of Commerce Majid Al Qasabi had a bullish outlook on future business and trade between the two countries as obstacles facing Saudi investors are being addressed, he said in an interview with Al Arabiya yesterday.

It’s already been a pretty good week on that front: Units of Saudi Arabia’s Fawaz Abdulaziz Alhokair Company (Alhokair) could invest as much as USD 1.5 bn in Egypt next year. Meanwhile, Al Lami Holding Group and Batterjee are eyeing separate investments worth more than a combined USD 555 mn in our tourism, real estate, and pharma sectors.

SMART POLICY-

#1-e-KYC coming next year? The Central Bank of Egypt (CBE) plans to roll out e-KYC, or an electronic know-your-customer process, deputy assistant governor of the CBE Ehab Nasr told Asharq Business, without mentioning a timeframe. However, Al Mal reports that the system should be in place by 3Q 2024.

It’s huge news for banks and other players in the financial services industry who are desperate to move away from wet signatures. A switch to e-KYC allows current and potential customers to verify their identities online — getting low-value transactions out of branches (if you’re the bank) and saving you the hassle of driving to, parking, and queuing at the branch (if you’re the customer).

Remember: The central bank in 2020 introduced streamlined light KYC regulations that paved the way for banks to use an agent to onboard customers using only each individual’s national ID.

#2- An app for opening bank accounts remotely? The CBE also plans to launch a new mobile app next year that will allow users to open bank accounts online from anywhere in the world, according to another report from Asharq Business, citing who it says to be a government official. The app will be managed by the Digital Financial Identity Company (DFIC), the source added. The CBE is helping set up DFIC with EGP 275 mn in capital, or a 55% stake, according to the bank’s FY 2022-23 financials (pdf).

The CBE is making strides on the digital inclusion front: The bank in March 2022 launched its digital payment platform InstaPay after issuing regulations for the instant payment network (IPN) back in 2021. The app — which provides instant payments between Egyptian banks, Meeza cards, and mobile wallets — has seen its user base grow 82% over the past eight months to over 4 mn users.

Uhm, can we be greedy and ask for more? If we can speak on behalf of our friends in the banking community to our friends at the CBE: It would be most awesome if we could move to digital record storage, too, rather than requiring banks to store hard copies of records.

HELP GAZA-

Want to support relief efforts in Gaza, but don’t know how? We’ve got you. More than 1 mn people in Gaza have been thrown from their homes and every human being there lacks access to food, water, and fuel amid the most intense bombardment any population has endured this century.

The folks at Talabat are processing donations for a range of Gaza relief appeals by charities including the Egyptian Food Bank and Misr El Kheir. Pay in EGP using your credit card.

Or check out our list of charities to which you can make direct donations via bank deposit and / or Fawry.

HAPPENING TODAY-

#1- Shoukry & Co. head to London and Paris: Foreign Minister Sameh Shoukry and the rest of the delegation of Arab and Islamic officials are heading to the UK and France today to press officials to back a ceasefire on Gaza, according to Turkish media. The delegation is visiting the five permanent members of the UN Security Council in a bid to build momentum for a ceasefire, and has so far visited Beijing and Moscow. We have more on yesterday’s talks with Russian officials in this morning’s War Watch, below.

#2- MERIS may be getting some competition: Today is the last chance to apply for a credit rating license from the FRA after it loosened requirements last year.

#3- It’s the last day of payment and fintech conference Pafix today as part of Cairo ICT2023at the Egypt International Exhibition Centre in New Cairo.

HAPPENING TOMORROW-

#1- The Bahrainis are in town: A Bahraini government delegation will land in Cairo tomorrow to kick off the Egyptian-Bahraini Government Committee’s first session. Finance Minister Mohamed Maait and his Bahraini counterpart Salman Bin Khalifa Al Khalifa are set to discuss trade, economic, scientific, and technological cooperation, according to the Finance Ministry readout yesterday

#2- Even more Saudi real estate investment incoming? Tomorrow’s Saudi Egyptian Real Estate Investment Conference in Riyadh with industry insiders and government policy makers from both countries will focus on opening up Saudi investment potential in Egypt and utilizing our real estate know-how, according to a statement picked up by Zawya.

#3- Education, Education, Education: The Worldview Education Fair is kicking offon Friday with representatives for 20 universities and business schools looking for bright and eager students to enroll.

THE BIG STORIES ABROAD-

#1-Dominating the global news agenda this morning: The Israeli government has agreed a hostage swap pact with Hamas that will see a four-day pause in the fighting, at least 50 Israeli hostages released, and 150 Palestinian detained freed. We have the full story in this morning’s War Watch below. (Associated Press | Reuters | Bloomberg | Financial Times | New York Times | Washington Post | Wall Street Journal | BBC)

#2- This morning in corporate crime: The CEO of the world’s largest crypto exchange pleads guilty to money laundering:Binance CEO Changpeng Zhao (known as CZ in the crypto world) has stepped down and pleaded guilty to breaching anti-money laundering laws in the US in what was described by prosecutors as one of the heftiest corporate penalties in US history, according to statements from the US Treasury and Justice Department yesterday. The company has agreed to pay a USD 4.3 bn settlement to the government, and completely exit the US.

The charges: Binance failed to report over 100k suspicious transactions with organizations including Hamas, Al Qaeda, and ISIS. The crypto platform also failed to report transactions with websites selling child abuse content and was one of the biggest recipients of spoils from hackers using ransomware.

Another crypto king dethroned: FTX founder Sam Bankman-Fried is now looking at up to 115 years in prison after being found guilty of seven counts of criminal fraud earlier this month, including stealing from customers on his platform.

Zhao will likely serve no more than 18 months in prison as part of a plea agreement, despite facing a sentence of up to 10 years.

The news is the big story in the business press this morning:Reuters | Bloomberg | Financial Times | CNBC | Wall Street Journal.

#3- OpenAI board is buckling under pressure to bring back Altman: OpenAI’s board is in talks with Sam Altman to bring the highly-popular ex-CEO back to the company, just days after deciding to fire him, Bloomberg and The Washington Post reported the news, citing sources they say are familiar with the matter. Nearly all of the company’s 700 employees have reportedly threatened to leave if Altman is not reinstated.

HAPPENING SOON

#1- Will they, won’t they? OPEC+ oil production cuts edition: OPEC+ member states are meeting on Sunday to discuss how the cartel of oil-producing nations will respond to falling oil prices and how new economic realities could further stifle demand. The bloc’s production cuts are expected to be prolonged to at least the group’s meeting and there’s also talk of an additional 1 mn barrels per day cut, according to industry insider chatter picked up by the Financial Times.

#2- COP28 is only a week away: The countdown to COP28 has begun as global leaders in climate, policy, and business prepare for 13 days of intense negotiations in Dubai to save our planet from climate catastrophe running from 30 November to 12 December. The conference will embark on wrapping up its first Global Stocktake (GST) of the progress (or lack thereof) we have collectively made since 2015’s landmark Paris Climate Accords where we agreed to limit global warming to well below 2 degrees Celsius. Expect to see Egypt pushing its landmark “just financing” policy that it unveiled at last year’s conference in Sharm El Sheikh.

MARKET WATCH-

Fed looks set to hold rates as they are, but is still erring on the side of caution: The Federal Reserve showed “little urgency” for another rate hike according to minutes from an official meeting this week cited in the Financial Times. Officials were keen to emphasize, however, that future rate decisions are still heavily data-dependent and that policy would “remain at a restrictive stance for some time until inflation is clearly moving down sustainably towards the committee’s” 2% target.

Remember: The Fed decided to hold rates steady for the second consecutive time this month, plateauing at a 22-year high of 5.25-5.5% after an aggressive monetary tightening cycle that began in March of last year in the wake of Russia’s invasion of Ukraine.

CIRCLE YOUR CALENDAR-

The Egypt Defense Expo (EDEX) will be firing off from 4 to 7 December: Around 35k defense and security professionals from across the world will land down in Cairo next month for the biennial event at the Egypt International Exhibition Center.

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

*** 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 take a look at how the Madbouly government is looking to the private sector next year to develop our sports infrastructure ahead of our planned Olympics bid.

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2

WAR WATCH

Hamas, Israel agree hostage-for-ceasefire pact

Gaza to get four-day reprieve after Israeli agrees to hostage swap pact: The Israeli cabinet has backed a hostage-for-ceasefire agreement that will see Hamas release a limited number of hostages in return for a four-day ceasefire, Reuters reported this morning, citing the Israeli prime minister’s office. The agreement — the biggest diplomatic breakthrough since the conflict began almost seven weeks ago — follows weeks of negotiations mediated by Egypt and Qatar, and hours of discussions among Israeli officials last night.

What we know:

  • A fifth of hostages to be released: Hamas will release 50 women and children during the four-day truce. The armed group is thought to hold 240 Israeli captives.
  • A prisoner swap: Israel has agreed to release 150 Palestinian prisoners, mostly women and children, during the four-day period, according to Axios.
  • More aid: Israel will allow 300 aid trucks into Gaza every day, a substantial increase from the c.100 trucks that are currently crossing the Rafah border daily.
  • It’s not over the line yet: The agreement won’t come into force until Thursday at the earliest to give for the Supreme Court to rule on the decision.

Arab / Islamic delegation in Moscow: Russia’s chief diplomat Sergey Lavrov became the second P5 foreign minister to call for a ceasefire in Gaza and the release of hostages during talks with a delegation of Arab and Islamic officials in Moscow yesterday, the Russian Foreign Ministry said. Lavrov described Israel’s “collective punishment” of the people of Gaza as “unacceptable,” and urged new humanitarian corridors to be established and steps to be taken towards the creation of a Palestinian state.

Remember: The delegation — which includes Foreign Minister Sameh Shoukry, as well as the chief diplomats from Palestine, Jordan, Saudi Arabia, and Indonesia — is visiting the five permanent members of the UN Security Council to build global support for a ceasefire. It made its first stop in Beijing on Monday where Chinese officials called for an immediate end to the violence.

Egypt makes move at the Security Council: Egypt has drafted a UN Security Council resolution that aims to overcome “existing obstacles and imbalances” to the entry of aid into Gaza, the Foreign Ministry said yesterday, without disclosing further information.

Brics leaders meet, fail to reach an agreement. Leaders from Egypt, South Africa, China, Brazil, India, Russia, Saudi Arabia, Ethiopica, Argentina, the UAE, and Iran attended a remote emergency Brics meeting yesterday to look at ways to de-escalate the ongoing war on Gaza. The meeting ended with a joint statement but no joint declaration, which South African President Cyril Ramaphosa blamed on lack of sufficient time rather than the leaders’ divided stances. In the statement, Brics leaders condemned the forced displacement of the people of Palestine — a move that has been pushed by a number of Israeli officials — and called for a humanitarian truce.

South Africa to cut ties with Israel: South African MPs voted yesterday to close the Israeli embassy and cut diplomatic ties until Israel agrees to a ceasefire, the Associated Press reports. The opposition motion was supported by the ruling African National Congress party and came two weeks after the country withdrew its ambassador from Tel Aviv.

Madbouly reassures MPs on Gaza displacement: Egypt has been under political and economic pressure to allow the displacement of Palestinians to Sinai but the government will not allow this to happen, Prime Minister Moustafa Madbouly told MPs yesterday. “The government is well aware of conspiracies aimed at liquidating the Palestinian cause and destabilizing Egypt's national security,” he said during a parliamentary session. “Egypt will take a firm reaction against any attempts to resettle Palestinians in Sinai.”

ON THE GROUND- Death toll rises to 14.1k+ | Gaza received 76k liters of fuel on Monday | 2journalists killed in Israeli airstrike in Lebanon | 2 journalists killed in Lebanon, and at least 53 killed in total, marking the deadliest month for journalists since CPJ began gathering data in 1992.

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3

Economy

Egypt economic growth to accelerate this fiscal year as privatization boosts investment -BMI

State asset sales to underpin stronger economic growth this year -BMI: The Egyptian economy will see improved growth this fiscal year on the back of the government’s privatization program, though the war in Gaza will add to the headwinds bearing down on the economy, according to BMI, a research unit of Fitch Solutions. Economic growth will accelerate to 4.2% this year from 3.8% in FY 2022-2023 as progress on asset sales draws new FDI that will “more than offset” the impact of falling demand and limited ability to cut imports, it wrote in a recent report.

Remember: The government rebooted its privatization program earlier this year, selling stakes in Telecom Egypt, Al Ezz Dekheila, Elab, Ethydco, and EDC, and Eastern Company. Next in line are stakes in its hotels holding company and the military-owned fuel retailer Wataniya.

Slower than expected: BMI’s latest outlook is a slight downgrade from its previous 4.4% forecast following the outbreak of war in Gaza, which it says will drag on investment, consumption, and exports. The war will add “another layer of uncertainty” and encourage businesses to adopt “a ‘wait-and-see’ approach” towards investment, the report says. It has also created “significant risks” for the tourism sector, and forced the government to curb import-intensive projects.

BMI aligns with the government’s forecast: The government this month raised its growth target for the current fiscal year to 4.2%.

It’s not the first int’l institution to downgrade its Egypt growth outlook in recent weeks: Both the IMF and World Bank cut their growth forecasts last month on the back of the ongoing FX crisis and the government’s rising borrowing costs. The lenders are now expecting the Egyptian economy to grow 3.6% and 3.7% respectively during the current fiscal year.

Downside risks: The war could take a heavier toll on the economy if it spills into other countries in the region, to which BMI assigns a 40% probability. “This would result in a more pronounced slowdown in investment activity, reduce travel and tourism receipts, lead to a more prolonged disruption to gas exports, increase oil prices, and lead to a higher import bill,” the report says.

More from BMI:

  • EGP could weaken 45% against the USD by March: The EGP is expected to weaken to 40-45 / USD by the end of 1Q 2024 following the central bank’s anticipated currency devaluation, which BMI expects to take place in February.
  • Major rate hikes ahead: BMI expects the central bank to hold off on further interest rate hikes until 2024, when it expects rates to rise by 300 bps during the first six months of the year in the wake of the devaluation.
  • Inflation to temper thanks to the base effect: Inflation is expected to cool to an average of 27.4% y-o-y in 2024 from 34.1% this year, as a favorable base effect outweighs the inflationary impact of the devaluation.
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4

DEBT WATCH

Emirates NBD Egypt signs EUR 30 mn loan agreement with Hayat Egypt

Turkey’s Hayat is borrowing to expand in Egypt: Emirates NBD Egypt has signed a EUR 30 mn medium-term loan agreement with Turkish sanitary product company Hayat’s local subsidiary Hayat Egypt to help it finance a new USD 70 mn tissue factory in Ain Sokhna, the lender said in a statement (pdf) Monday. No further details about the loan were provided.

ICYMI- We first got wind of the planned Hayat tissue factory last month during a trade delegation trip to Turkey to drum up investments. Hayat also talked up the possibility of a USD 35 million industrial detergents plant, a diaper facility of an unspecified size, and of opening a paper factory that uses our abundant date palms as the main raw material.

This is good news for Egypt’s exports: Hayat Egypt’s new tissue plant will be a “exportation hub of Hayat in the region” that “100% serve[s]” exports and will contribute USD 80 mn to our annual export tally, according to Hayat Egypt’s general manager Senol Keserlioglu. The new factory is also set to create 80 new direct jobs. The statement did not give a date for when we can expect to see the factory up and running, but Keserlioglu said earlier this month that the company had a new factory in the works set to open in late 2024 and another in 2025.

We knew that some Hayat investments were in the pipeline: Earlier this month, local media reported that the company was boosting its Egyptian subsidiary’s capital 20% to USD 200 mn and would invest a further USD 120 mn in its operations here by the end of 2025. In July, we also heard that the Turkish sanitary products company was planning to pump in USD 210 mn to establish three additional production lines in Egypt.

Hayat ain't new to the Egyptian market: Hayat already employs 1.5k people and has invested a total of USD 550 mn in its operations here. And you’ve probably seen or bought many of their products, which include Molfix baby diapers, Molped feminine care products, Papia toilet tissues, and Familia tissues.

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5

Kudos

Vodafone goes high tech and low carbon with new data center upgrade

Vodafone’s data center is getting an emissions-reducing upgrade: Our friends at telecoms giant Vodafone Egypt will soon integrate immersion cooling technology, a pioneering method that slashes energy waste generated from thermal heating, in its data center, the company said in a LinkedIn post this week.

AUC young entrepreneurs score gold at a regional fintech competition held in Dubai: A team of AUC students were the winners of an Arab fintech competition initiated by the Central Bank of Egypt for their gamified saving app for Egypt’s youth, according to a recent statement (pdf) from the university.

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6

Moves

Ingy Agha named head of internal audit at HSBC Bank Egypt

Our friend Ingy Agha (LinkedIn), a 24-year veteran of HSBC Egypt, has been named the bank’s head of internal audit, making her one of a very small handful of female leaders to hold the post in our banking system. Ingy has previously served in a number of senior governance and risk-management roles, including corporate governance and secretariat, audit, and compliance. As head of internal audit, she will be responsible for leading the team that “assess and monitors the bank’s risk management process, internal, controls and compliance with regulatory requirements,” HSBC said.

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7

LAST NIGHT’S TALK SHOWS

Gaza hostage agreement dominated last night’s talk show coverage in Egypt

Gaza is once again dominating the airwaves with the nation’s talking heads focusing on the upcoming hostage agreement and Prime Minister Madbouly facing questions from the House of Representatives on how Egypt is handling the war on Gaza.

A hostage agreement is imminent: After weeks of negotiations, Hamas and Israel look like they have finalized a hostage agreement which will see the release of both Palestinains and Israelis held captive, Israel allowing more aid into the enclave, and a multi-day truce. Palestinian political science professor Ayman Al Raqab joined Kelma Akhira’s Lamees (watch, runtime: 6:03) to share the details of the agreements, while Yahduth Fi Masr interviewed Hamas official Ghazi Hamad (watch, runtime: 3:25) on the matter. Ala Maso’uleety (watch, runtime: 7:43) and Masa’a DMC (watch, runtime: 1:44) also had coverage. We have the full details in this morning’s War Watch, above.

Madbouly faces MPs: Prime Minister Moustafa Madbouly yesterday faced MPs and their questions about the measures being taken by the government to prevent Israel from forcibly displacing Palestenians into Sinai. Madbouly said that his government “will never allow” Israel to push Gazans into Egypt and destabilize its national security. Madbouly’s comments received wide coverage in last night’s talk shows, with Kelma Akhira (watch, runtime: 6:01), Ala Maso’uleety (watch, runtime: 4:33), Masa’a DMC (watch, runtime: 9:09), and Al Hayah Al Youm (watch, runtime: 4:24) all giving the story airtime.

Abou El Enein in Washington: MP and Cleopatra Group founder Mohamed Abou El Enein reiterating Egypt’s stance on the situation in Gaza and the Israeli plan to resettle displaced Gazans in Sinai in Washington yesterday during the National Council on US-Arab Relations. Al Maso’uleety had coverage (watch, runtime: 17:46).

ALSO- Gov’t believes soaring gold prices will cool off.Supply Minister official Nagy Farag called in to Kelma Akhira (watch, runtime: 3:28) to voice his belief that gold prices will see a slight drop on the back of cooling global gold prices and an uptick of Egyptians bringing in gold from abroad after recently introduced customs rules. In case you missed it, gold prices have been hitting never-before-seen highs as Egyptians rush to buy the precious metal as a hedge against a weakening EGP and a looming devaluation rumored for the start of next year. The price of 24-carat gold has now climbed above EGP 3,200 per gram.

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8

Also on our Radar

Save the date, Saudi investments are on their way. PLUS: News from Ingram Micro, Telecom Egypt, Valu, and EIB

INVESTMENT-

More Saudi investments incoming: Saudi’s Al Kraida Dates is looking to set up a 10k sqm date factory in Egypt beginning of 2024, chairman Abdul Rahman Al Kraida told Asharq Business (watch, runtime: 3:12) on the sidelines of the Saudi-Egyptian Business Council. The factory will target the local market during its first year of operations before expanding into exports. The company has also acquired 800 feddans to cultivate.

** We dive into all things date production industry in an Inside Industry published earlier this year.

INVESTMENT-

Ingram Micro wants to expand presence in Egypt: American tech distributor IngramMicro wants to invest some USD 60 mn in the Egyptian market in 2024, the company’s country director Mohammed Selim told Al Mal. The company brands itself as the “leading technology distributor with a wide network of resellers across Egypt,” the company’s Egyptian operations account for 80% of its operations in the region.The company offers a number of data center solutions, servers, storage, cyber security, networking, and infrastructure software.

INFRASTRUCTURE-

Better telecom services for Madinet Masr residents: Telecom Egypt will start providing Madinet Masr real estate projects with integrated telecom and “smart city” services, under a cooperation protocol inked between the two sides, the real estate developer said in a statement (pdf). The services will cover landlines, high-speed Internet, and IPTV (Internet Protocol television) broadcast services, public WiFi, and phone signal.

ENERGY-

Copetrole x Petronas: The Egyptian General Petroleum Corporation’s (EGPC) Cooperation Petroleum Company (Copetrole) and Malaysia’s Petronas will exchange expertise and boost cooperation under a cooperation agreement inked between the two sides, the Oil Ministry said in a statement. The Malaysian energy company also expressed interest in making Egypt its regional export hub.

FINTECH-

Valu teams up with Kazyon: Homegrown fintech platform Valu will start offering shoppers at supermarket chain Kazyon financing solutions and BNPL services, under a strategic partnership inked between the two sides, Valu said in a press release(pdf).

FINANCE-

EIB sets up MENA hub in Cairo: The European Investment Bank (EIB) yesterday inaugurated a new regional hub in Cairo, which aims to facilitate and bolster the bank’s cooperation with its partners in the MENA region, it said in a press release. “Strengthening the local presence of EIB Global is crucial to better address investment challenges and increase the impact of engagement with public and private investment partners,” said EIB Vice President Gelsomina Vigliotti.

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PLANET FINANCE

Dubai Taxi set to raise USD 315 mn in IPO

Dubai Taxi IPO sees huge investor demand: State-owned Dubai Taxi Corporation’s (DTC) IPO offering up 25% of the company was oversubscribed within the first hour of opening yesterday, Bloomberg reports. The company listed a total of 624.8 mn shares in its IPO on the Dubai Financial Market (DFM).

Offering could fetch more than AED 1 bn: The company has set an indicative price range ofAED 1.80-1.85 per share, valuing the company at up to AED 4.62 bn (USD 1.25 bn), according to a filing to the DFM. The share sale could see DTC — Dubai’s largest taxi operator — raise as much as AED 1.16 bn (USD 315 mn), Bloomberg notes. The final pricing will be announced next Thursday, 30 November.

Sellers: The Department of Finance for the Government of Dubai serves as the seller in the firstsuch offering by the Dubai government in over a year.

Advisors: Citibank, Emirates NBD, and Merrill Lynch are joint global coordinators for thetransaction. Joining them on joint bookrunner duties are EFG Hermes UAE and FAB. Emirates NBD is lead receiving bank, while our friends at Mashreq Bank are also serving as a receiving bank alongside FAB and others. Rothschild is also serving as an independent financial advisor.

SAUDI ALSO HAS BIG IPOs IN THE PIPELINE- Saudi’s MBC taps HSBC and JPMorgan as advisors for upcoming IPO: The region’s largest broadcaster MBC Group has hired HSBC Holdings and JPMorgan Chase & Co as financial advisors ahead of its initial public offering in Saudi Arabia, Bloomberg reported. In what could be one of the most prominent IPOs in the kingdom this year, MBC will offer up 10% of its company to public investors, or 33.3 mn shares.

ALSO WORTH NOTING-

  • Three quarters of foreign funds invested in Chinese stocks left in 2023,marking outflows of nearly USD 25 bn, according to the Financial Times. The dumping of shares has pushed the CSI 300 down 11% in USD terms in 2023 as foreign investors lost faith in the economy as it struggled with a precarious real estate sector and slow post-covid recovery.

EGX30

24,774

+0.1% (YTD: +69.4%)

USD (CBE)

Buy 30.83

Sell 30.96

USD at CIB

Buy 30.85

Sell 30.95

Interest rates CBE

19.25% deposit

20.25% lending

Tadawul

11,129

+0.1% (YTD: +6.2%)

ADX

9,542

-0.4% (YTD: -6.6%)

DFM

3,985

-0.4% (YTD: +19.5%)

S&P500

4,538

-0.2% (YTD: +18.2%)

FTSE 100

7,482

-0.2% (YTD: +0.4%)

Euro Stoxx 50

4,332

-0.2% (YTD: +14.2%)

Brent crude

USD 82.45

+0.1%

Natural gas (Nymex)

USD 2.85

-1.3%

Gold

USD 2,021.80

+1.1%

BTC

USD 36,786.20

-1.7% (YTD: +123.4%)

THE CLOSING BELL-

The EGX30 rose 0.1% at yesterday’s close on turnover of EGP 4.1 bn (48.1% above the 90-day average). Regional investors were net buyers. The index is up 69.7% YTD.

In the green: Telecom Egypt (+4.5%), GB Corp (+4.4%) and Mopco (+4.3%).

In the red: Sidpec (-3.0%), B Investments Holding (-2.5%) and Belton Holding (-1.9%).

Yesterday’s sell-off on Wall Street is continuing in Asia this morning, where much of the region’s indexes are trading lower. Equity futures are pointing to a mixed session in Europe and the US when markets open later today.

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Our weekly deep-dive into infrastructure in Egypt.

Published every Wednesday in EnterpriseAM.

Read Hardhat
10

HARDHAT

Gov’t looks to private sector for infrastructure ahead of planned Olympics bid

One year after we signaled interest in hosting the 2036 Summer Olympics, what progress have we made on sports infrastructure? Egypt has been vying to host the 2036 Olympic games in its new administrative capital (NAC). The government has since spent big on the country’s sporting infrastructure, with plans to attract more investments from the private sector over the next few years.

REMEMBER- For a city to be eligible for hosting the games, the city needs to have an Olympic village capable of housing, feeding and providing medical care to some 11k-16k athletes and their trainers, a media village for international press personnel, a media center to broadcast the competition, 40 unique venues to host the 300 sporting events, and ceremonial and green spaces, according to a contractual framework (pdf) from the International Olympic Committee. That’s not to mention at least 40k hotels for spectators to lodge.

But we’ve got competition: Countries including India, Poland, China, Hungary, Italy, Denmark, Canada and Qatar have all indicated that they might be bidding for the hosting rights, according to reports from FoxSports and NBC.

Construction on the first phase of the sports complex in the New Administrative Capital is complete: Most of the infrastructure for the EGP 2 bn sports complex — which includes an indoor hall, an Olympic swimming pool complex, and squash and tennis courts — is ready, with the remaining work left spanning services and equipment that can service the area, the source added.

What’s left? On top of the sporting facilities, there are also plans in place to have a sports medicine hospital, hotels, an open-air theater, and a shopping center in the Olympic City, Fox Sports said.

There’s more than just the Olympic city: We’ve also built a new sports city in Port Said, a youth city in the Asmarat district, in addition to the establishment of the covered hall at the Army Stadium and the Cairo International Stadium, according to the project profile on Concord’s website. The government also spent somewhere around EGP 2.6 bn on developing existing sporting infrastructure and stadiums, according to our source.

We’re spending big: We’ve invested a total of around EGP 30 bn in the last five years on developing sports facilities, as part of “an effort to attract other investments in the private sector,” Youth and Sports Minister Ashraf Sobhi told local media this week.

And the investments are paying off: The investments the government has made so far in 366 youth centers achieved some EGP 3.2 bn in returns, our source said.

The state now wants private sector involvement:The private sector can start bidding for the contract for the Olympic city, as well as more youth centers, next year, Atter Hannoura, director of the Finance Ministry’s PPP unit, said, adding that we’re looking to investors to aid in the process of equipping and preparing our stadiums, according to our source. The total investment costs for the city, as well as its launch date, are still being decided, Hannoura said.

The gov’t is also eyeing investments through IPOs: The government is planning to establish a company for the state-owned sporting club El Nadi, ahead of a planned IPO on the EGX sometime in the next two years, Sobhi said this week, according to Hapi Journal. The IPO will take place after the club opens its third branch, Sobhi added. Its current branches are located in 6th of October and Sheraton.

More infrastructure expansions to come: There are also plans to expand our youth centers and sports clubs at the governorate level, the source said. “We now have 4,503 youth centers nationwide and 30 sports stadiums, in addition to developing and raising the efficiency of new buildings and youth centers, and there are plans for the construction of more in the coming period,” they added.

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CALENDAR

NOVEMBER

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

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

22 November (Wednesday): The EGY-GCC Business Forum opening session.

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

23 November (Thursday): The Saudi Egyptian Real Estate Investment Conference.

26 November (Sunday): The 36th OPEC and non-OPEC Ministerial Meeting takes place in Vienna.

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

Signposted to happen some time in November:

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

DECEMBER

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

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

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

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

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

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

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

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

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

Signposted to happen sometime in December:

  • Gov’t expects to finalize sale of a stake in military-owned bottled drinks company Safi
  • Gov’t expects to finalize stake sale for military-owned fuel retailer Wataniya.
  • Gov’t expects to finalize sale of Zafarana wind farm
  • Kenyan trade conference in Egypt.

EVENTS WITH NO SET DATE

2023: The inauguration of the Grand Egyptian Museum.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

2Q 2025: Safaga Terminal 2 to start operations.

2024

JANUARY

1 January (Monday): Egypt to join the Brics.

7 January (Sunday): Coptic Christmas.

17 January (Wednesday): A delegation of Egyptian companies to visit Istanbul.

25 January (Thursday): Revolution day.

FEBRUARY

11 February (Sunday): The deadline to apply for the Chicago Booth Executive Program

APRIL

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

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

MAY

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

5 May (Sunday): Coptic Easter.

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

29 May (Wednesday): Chicago Booth Executive Program

JUNE

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

30 June (Sunday): June 30 Revolution Day.

JULY

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

23 July (Tuesday): Revolution Day.

SEPTEMBER

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

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

OCTOBER

6 October (Sunday): Armed Forces Day.

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