GDP grows at fastest pace in years

Tuesday, 1 Jul 2025

GDP grows at fastest pace in years

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Today at a glance

WHAT WE’RE TRACKING TODAY

Gov’t is looking to complete the fifth review of our IMF program this month.

ECONOMY

GDP grows at fastest pace in three years in 3Q FY 2024-25.

INVESTMENT WATCH

We could be in for USD mns of new Chinese investments.

Manufacturing

Al Safy wants to produce batteries + more Xiaomi products locally.

Automotive

Auto sales record highest figure in almost three years in May.

Moves

Kima taps new executive managing director.

ALSO ON OUR RADAR

Saudi investor snaps up 12.1% of Raya Holding.

PLANET FINANCE

USD bns of capital cross the Atlantic as investor confidence in the US wanes.

Going Green

Breaking down the climate financing gap.

WHAT WE’RE TRACKING TODAY

Gov’t is looking to complete the fifth review of our IMF program this month

Good morning, folks, and a happy new fiscal year. We kick off the first day of FY 2025-26 with good news — the economy grew at a 4.8% clip during 3Q FY 24-25, marking its strongest quarterly performance in three years, and we’re in for fresh investments from China.

PSA-

WEATHER- It’s another sunny day in Cairo, with a high of 37°C and a low of 25°C, according to our favorite weather app.

It’s a lot cooler in Alexandria, with a high of 31°C and a low of 22°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.

WATCH THIS SPACE-

#1- The government is working to wrap up its fifth review with the International Monetary Fund (IMF) before the end of June July. Ongoing negotiations with the IMF should lead to the Fund and local authorities reaching a staff-level agreement on the fifth review of our USD 8 bn program by the end of July — and with it unlocking the USD 1.3 bn fifth installment of the Extended Fund Facility Arrangement — a government source told EnterpriseAM yesterday.

#2- The state is transferring assets to the Environment Ministry in preparation for a host of programs funded by the IMF’s USD 1.3 bn Resilience and Sustainability Facility, a government source told EnterpriseAM. The first transfer saw renewable project, power plant, and mass transit assets totalling EGP 1 bn being given to the ministry by the electricity, transport, and housing ministries.

The transfer of the assets will be followed by the Fund beginning to release tranches under the facility, which will be done in parallel with the launch of targeted projects. We’re still yet to get a clear picture of the timeline and size of the tranches.

An in-the-works asset registry will help the state issue sustainable sukuk and bonds secured by these assets, which will then be expanded into a risk mechanism for the program in cooperation with the IMF, we were told.

#3- The EGX may soon become a route to state investment incentives under a proposal in discussion with government bodies, EGX Executive Chairman Ahmed El Sheikh told Hapi Journal in an interview (watch, runtime: 3 4:42). Companies that list at least 20% of their shares and support Egypt’s FX position — by exporting or replacing imports — could qualify for benefits under the Investment Act, he said.

IN CONTEXT- Earlier this month, we reported that the EGX asked to delay the implementation of the stamp tax on EGX transactions as it works on incentives to offset its impact, including proposed amendments to tax, investment, and capital markets laws. These aim to boost listings, raise market cap, and improve liquidity.

The plan would make EGX listings a formal condition for incentives, similar to those granted based on location or sector, he added. It’s a bid to link going public with delivering macroeconomic value.

No new legislation is needed — just a tweak to the Investment Act’s executive regulations, now being coordinated with the General Authority for Investment and Freezones and the Investment Ministry, El Sheikh said.

MEANWHILE- A Nilex-listed fertilizer company is preparing to move to the EGX main market after acquiring unlisted firms, El Sheikh added. The merger will create a larger entity eligible for main market trading, pending completion of acquisition procedures and regulatory disclosures, he said. El Sheikh noted the company's capital could grow from EGP 40-50 mn to nearly EGP 1 bn post-merger, though no timeline was given for the move.

HAPPENING TODAY-

#1- Prime Minister Moustafa Madbouly is in Spain to talk development finance during the UN’s International Conference on Financingfor Development, which is taking place in Seville until 3 July, according to a cabinet statement. Madbouly is joined by Planning Minister Rania Al Mashat and Finance Minister Ahmed Kouchouk.

#2- El Khatib is in Prague to talk investment: Investment Minister Hassan El Khatib is in Prague, leading a delegation participating in the second Egyptian-Czech Joint Economic Committee — the first such gathering in nine years, according to a statement. El Khatib will also attend the Czech Business Forum, where some 42 Czech companies in auto, renewables, textiles, medical supplies, and chemicals will explore potential investments in Egypt. El Khatib's agenda also includes talks with Czech Industry and Trade Minister Lukáš Vlček and meetings with major Czech investors eyeing expansion in Egypt.

#3- Senate elections are upon us: The National Elections Authority is holding a presser today to announce the ins and outs of the upcoming senate elections.

#4- Attention, executives. AUC’s Onsi Sawiris School of Business is giving a taste of its Executive MBA program with an online session to “explore how leaders can drive transformation, adapt to change, and lead with clarity in uncertain times” at 7pm tonight, held by Imperial College Business School Associate Professor Namrata Malhotra. You can find the link to register for the webinar on the business school’s LinkedIn account.

NEWS TRIGGERS-

It’s the first day of July — here are the key news triggers to keep your eyes on this month:

Fingers crossed for the non-oil private sector moving back into the green. S&P Global will release its PMI report measuring non-oil private sector activity for June on Sunday, 7 July. There’s reason to be hopeful, with the S&P’s last report showing the country’s headline figure for May rising to just 0.5 percentage points shy of the 50.0 mark threshold separating contraction from growth.
Brics assemble. The annual Brics Summit is taking place on 6-7 July in Brazil’s Rio de Janeiro, marking the first time the bloc of nations has met since US President Donald Trump returned to the White House. Some of the Trump administration’s most punitive tariffs have been focused on Brics members; Trump even threatened tariffs of 100% or 150% if the bloc attempted to launch a common currency or undermine the USD’s status as the global reserve currency.
Three interest rate cuts in a row? The central bank’s Monetary Policy Committee (MPC) is holding its fourth policy meeting of the year on Thursday, 10 July to review rates. The MPC cut interest rates by 100 bps in its last meeting.
Is inflation still on the rise? The business community and policymakers will have their eyes on June’s inflation figures due on Thursday, 10 July after headline inflation ticked up for the third month running to 16.8% in May. Some analysts are already expecting inflation to rise again on the back of fuel price hikes.

CIRCLE YOUR CALENDAR-

FinMin to start paying back delayed export subsidies: The Finance Ministry will start paying back exporters 50% of their total overdue payments under the export subsidy program over a four-year period starting 7 August, Finance Minister Ahmed Kouchouk announced in a statement. The other half will come in the form of tax and custom breaks and utilities.

So far, 2.4k exporters are set to receive over EGP 25 bn in total, with disbursement arranged through four banks — the National Bank of Egypt, Banque Misr, Banque du Caire, and the Export Development Bank.

REMEMBER- Under the revamped export subsidy program, subsidy disbursements will be made in no more than 90 days and will be paid in full without tax deductions. The program, which would have an annual budget of EGP 45 bn, tailors support to each sector’s needs, starting with engineering and chemicals.

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

THE BIG STORY ABROAD-

All eyes are on the US Senate as they race to vote on amendments to US President Donald Trump’s so-called “big, beautiful bill,” — a sweeping legislation that aims to pass a trove of tax cuts and reduce spending on medicaid and clean energy tax credits — ahead of the president’s 4 July deadline. Senate Republicans are expected to vote throughout the night, after a day that saw discussions drag as they work to find a balance that would appease the bill’s opposers, and that could pass the House later. The Senate needs no more than three GOP Senators to reject the bill in order to still be able to pass it — and currently, two senators have already decided they are firmly against it.

What’s on the drawing board? Softening the phase-out of clean energy subsidies, changes to Medicaid, and changes to the rural hospital fund.

The story is leading front pages everywhere: Bloomberg | New York Times | Guardian | Wall Street Journal | Financial Times

PLUS- Trade talks between Canada and the US are back on track after Canada scrapped its plans to tax US tech firms, with an eye to complete talks by 21 July. (Guardian | Reuters)

AND- Netanyahu to visit Trump next week: Israeli Prime Minister Benjamin Netanyahu will meet US President Donald Trump at the White House next Monday to talk Iran, Gaza, Syria, and regional security. The visit comes as Trump presses Israel to end its war on Gaza and secure hostage releases. (Reuters | Bloomberg | Associated Press)

News of the visit came after Israeli strikes killed at least 60 people across Gaza yesterday. The attacks came following fresh evacuation orders from the Israeli military in northern Gaza, as Israeli Strategic Affairs Minister Ron Dermer travelled to Washington for talks on a possible ceasefire and hostage release agreement. (Reuters | The Guardian | BBC)

ALSO- Trump lifts US sanctions on Syria post-Assad: Trump signed an executive order yesterday terminating US sanctions on Syria to boost its war-torn economy and support its new government. (Reuters | Bloomberg | Financial Times)

*** It’s Going Green day — your weekly briefing of all things green in Egypt: EnterpriseAM’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: We look at the climate financing needed for us to hit our nationally determined contributions for 2030.

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IMF WHAT WE’RE TRACKING TODAY

Whether you’re diving into turquoise waters, catching golden hour from your terrace, or just letting time drift by — Somabay is summer, redefined. Your ultimate escape, every single time.

ECONOMY

Egypt’s economy grows at fastest pace in three years in 3Q FY 2024-25

The economy grew 4.8% in 3Q FY 2024-2025, more than doubling from the 2.2% recorded during the same period last year, marking its strongest quarterly performance in three years, according to a statement from the Planning and International Cooperation Ministry. Average growth for the first nine months of the fiscal year rose to 4.2% y-o-y, up from 2.4% y-o-y a year earlier.

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

Non-oil manufacturing maintained its recovery and continued to record positive growth for the fourth consecutive quarter, growing 16.0% — a sharp rebound from the contraction of around 4% recorded in the same period of the previous fiscal year. The sector was the biggest contributor to GDP growth during the quarter, adding 1.9 percentage points to the country’s overall growth rate. Growth in non-oil manufacturing was supported by significant improvements in industrial export performance, with finished goods exports increasing 12.7% y-o-y during 3Q FY 2024-25.

Other sectors also posted solid growth: Tourism (23.0%), financial intermediation (17.3%), ins. (7.7%), electricity (5.8%), and construction (3.1%) all posted positive growth levels throughout the quarter.

Private investment rose 24.2% y-o-y during the quarter, outpacing public investment for the third consecutive quarter and accounting for 62.8% of total implemented investments (excluding inventory), the ministry said. However, the increase in private investment was not enough to offset the sharp 45.6% y-o-y contraction in public investment at constant prices, which resulted in a negative contribution of investment to GDP growth that reduced the overall growth rate by around 2.4 percentage points.

Weighing on the momentum: Suez Canal activity fell by 23.1% on the back of a decline in vessel traffic due to Red Sea disruptions. Extractive industries also continued to decline as oil output fell by 9.5% y-o-y and natural gas production dropped by 20.5% y-o-y.

The government expects growth for FY 2024-25 to exceed its 4.0% target, citing the rebound in private investment and non-oil manufacturing activity as positive preliminary data.

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economy GDP

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INVESTMENT WATCH

Egypt could be in for USD mns of new Chinese investments

El Khatib’s time in Shanghai bears fruit: Chinese players, across sectors, expressed their interest in pouring fresh investments into the local market. This came during meetings between Investment Minister Hassan El Khatib and representatives from major Chinese players during El Khatib’s time in Shanghai.

From textile players: Zhejiang Holding is planning to invest an initial USD 20 mn in Egypt’s garment and textile sector, with the goal of scaling up to USD 50 mn over the next five years and Jiangsu Haite Fashion wants to build a USD 20 mn garment factory, aiming to tap into the country’s freetrade agreements for exports to Europe and the US.

Chinese textile players have been loving the local market with a long list of Chinese players having inked agreements to set up textile factories in the Qantara West Industrial Zone over the past period, including Hightex Co., Ltd Hangzhou, GS Global Sourcing, Guangdong Hongxin Textile, Top New Garment Group, Jiangsu Guotai, and Di Seta.

Beyond textile: Stationery manufacturer Deli Group, currently developing a USD 200 mn industrial complex in the Tenth of Ramadan, has requested additional land to expand its operations with a new paper printing machine production line.

In the energy sector, El Khatib met with the deputy director of Zhongman Petroleum and Natural Gas Group to discuss prospects in oil and gas exploration and drilling services. He also reviewed cooperation possibilities with Longi Green Energy on solar panel manufacturing and renewable energy technology transfer.

That’s not all: El Khatib also took part in roundtables covering the automotive, water treatment, sustainable energy, mining, and petrochemicals sectors. He also participated in the World Economic Forum and the Egyptian-Chinese Business Forum, according to a ministry statement.

MoUs were inked to support cross-border investments: Two MoUs were renewed during El Khatib’s visit — one to boost bilateral investment and another to support Chinese firms looking to invest in Egyptian infrastructure and manufacturing.

Tags:

China investment watch

Manufacturing

Al Safy wants to produce batteries + more Xiaomi products locally

Al Safy eyes local battery manufacturing and more: Al Safy Group is looking to start manufacturing EV and mobile batteries locally and in partnership with the government, General Manager at one of Al Safy’s factories Eslam Adel said during an event attended by EnterpriseAM yesterday.

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

Talks underway to expand Xiaomi partnership: Al Safy — Xiaomi’s local distributor — is in talks to expand its partnership with China’s Xiaomi beyond smartphones and TVs to include the manufacturing and assembling of home appliances — washing machines, refrigerators, and air conditioners — in Egypt, Adel said.

As things stand: Al Safy is setting up a USD 80 mn factory for the production of television units and smartphones. The factory includes 25 electronic production lines, 19 of which are dedicated to Xiaomi products — six lines for TV screens with an annual capacity of 500k units, 12 smartphone lines producing up to 3 mn units per year, and one line for the manufacture of packaging materials, smartwatches, routers, cameras, and headphones. With this factory, the group is looking to position itself as a key consumer electronics manufacturing hub, Adel said.

An eye on exports: Al Safy aims to export the factory’s output to countries with preferential trade agreements with Egypt, including COMESA, Agadir, and EUR 1, he said.

There’s more: The facility also includes production lines for medical devices in partnership with General Electric, including ultrasound machines, with future plans to produce MRI devices, Adel said.

More jobs to come: The complex currently employs 1.2k workers directly and over 2k indirectly, with plans to grow its workforce by up to 35% in 4Q 2025.

Regulatory support drives local phone assembly: Xiaomi’s local production capacity has doubled since the National Telecommunications Regulatory Authority’s decisions earlier this year to tighten governance on imported phones, Adel said, adding that Al Safy is focused on meeting rising domestic demand for locally made Xiaomi products.

Tags:

Al Safy Group investment watch Manufacturing

A MESSAGE FROM ONSI SAWIRIS SCHOOL OF BUSINESS EXECUTIVE EDUCATION

Onsi Sawiris School of Business hosts UNICON 2025: Shaping the Future of Executive Education

The 2025 UNICON Directors’ Conference, hosted by Onsi Sawiris School of Business at The American University in Cairo (AUC), brought together over 90 leaders from 29 countries to reimagine the future of executive education. Representatives from globally renowned institutions, including Stanford, MIT Sloan, INSEAD, and Yale, gathered in Cairo for three days of transformative discussions held across AUC’s Tahrir Campus, the New Cairo Campus, and the Grand Egyptian Museum.

UNICON 2025 created an essential space for addressing the key questions shaping the future of executive education: How can artificial intelligence (AI) enhance learning while maintaining the human connection? How can business schools design programs that balance global expertise with local relevance? What role do partnerships play in scaling impact?

Collaboration emerged as a central theme throughout the conference. Participants emphasized how partnerships can amplify the reach and impact of executive education. Real-world examples, such as programs co-created with industry leaders, demonstrated how collaboration can address organizational and societal challenges alike.

Another key focus was the transformative role of technology. Sessions explored how AI is reshaping executive education, from improving program design to increasing learner engagement. Participants also emphasized the importance of ethical governance and maintaining the human element in leadership development, ensuring that technology complements rather than replaces human creativity.

The discussions also highlighted the importance of localization in program design. In culturally diverse regions like the Middle East and Africa, tailoring programs to address specific market needs is critical.

The conference showcased the role of executive education as a driver of innovation. Institutions were encouraged to think beyond traditional models, leveraging tools like data analytics, AI, and leadership frameworks such as The GC Index to deliver personalized and impactful learning experiences.

“This conference was a call to action,” said Sherif Kamel, Professor and Dean of the Onsi Sawiris School of Business. “It challenged us to think differently, collaborate more effectively and innovate continuously in how we prepare leaders for the complex challenges ahead.”

Watch the highlights of the UNICON Directors’ Conference 2025 here.

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A MESSAGE FROM ONSI SAWIRIS SCHOOL OF BUSINESS EXECUTIVE EDUCATION Education

Automotive

Egypt’s auto sales record highest figure in almost three years in May

Auto sales increase again in May: Auto sales in May rose 15.9% m-o-m to 14.3k units in May, up from 12.3k in April, according to figures from the Automotive Marketing Information Council (Amic) seen by EnterpriseAM. May’s sales mark the highest monthly sales volume seen since June 2022 and extends the market’s recovery streak, which has been building steadily since February following January’s sharp 22.0% drop.

Passenger vehicle sales climbed 13.1% m-o-m to 11.1k units in May, extending the rebound in sales that started in February. Meanwhile, truck sales jumped 28% m-o-m to reach 2.4k units, and bus sales rose 23.6% m-o-m to 792 units.

May’s figures reflect a strong improvement compared to the same month last year, as total auto sales rose 127.7% y-o-y. Passenger vehicle sales surged 131.4% y-o-y, bus sales increased 76%, and truck sales climbed 133.2% y-o-y. May 2025 saw 14.3k units sold compared to 6.3k units in May 2024.

REMEMBER- Auto sales saw a partial recovery last year, growing some 13.2% y-o-y with some 102.2k vehicles sold throughout the year after the market got the chance to catch its breath after a turbulent period triggered by an FX crunch that limited supply in the market and gave distributors leverage to hike prices as they pleased.

A caveat to the numbers: Amic figures are sourced from member distributors, representing the bulk — but not the entirety — of the industry.

Tags:

AMIC automotive

Moves

Kima taps new executive managing director + Delta Sugar appoints new non-exec chairman

#1- Egyptian Chemical Industries (Kima) appointed Sameh Talaat (LinkedIn) as its new executive managing director, the company said in a disclosure to the EGX (pdf). Talaat is no stranger to the fertilizer industry, having most recently served as the CEO of Evergrow during his four-year stint at the company. Before this, Talaat spent over 15 years with AlexFert. Talaat will take on the role today, succeeding Abdel Mageed Hegazy.

#2- Delta Sugar’s board has approved the appointment of Ahmed Zakaria as its new non-executive chairman, according to an EGX disclosure (pdf). He succeeds Ahmed Shireen Korayem, with the decision taking effect immediately.

Tags:

fertilizers Kima moves

LAST NIGHT’S TALK SHOWS

Old Rent Law amendments back under the spotlight

The proposed amendments to the Old Rent Law dominated talk show coverage last night, with Kelma Akhira’s Lamees El Hadidi (watch, runtime: 03:58), El Hekaya’s Amr Adib (watch, runtime: 03:34), and Ala Masouleety’s Ahmed Moussa (watch, runtime: 1:30) all weighing in on the issue before the House continues its discussions of the amendments during today’s session.

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

Where’s the data? Moussa criticized the government for failing to provide MPs with clear data on old rent tenants during yesterday’s session, wondering “how can the government be present in parliament to discuss one of the country’s most important laws and not have any statistical data?” He voiced concerns over the accuracy of any figures the government may present today.

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LAST NIGHT’S TALK SHOWS legislation

EGYPT IN THE NEWS

Reuters highlights Egypt’s energy vulnerability following Leviathan field shutdown

“Egypt was one of the biggest economic losers of the Middle East’s 12-day war,” reports Reuters in a deep dive contrasting how post-Zohr discovery hopes of becoming a regional energy exporter and our now rising import bill to keep the lights on this summer. The sudden halt in Israeli gas imports that forced emergency reallocations and factory shutdowns, as the country scrambled to stabilize power generation ahead of peak summer demand, “highlights Egypt's vulnerability and fading hopes that the Eastern Mediterranean could become a major gas exporting region,” according to the newswire.

Tags:

energy oil and gas

ALSO ON OUR RADAR

Saudi investor snaps up 12.1% of Raya Holding

M&A WATCH-

Saudi investor Naif Al Rajhi (Linkedin) acquired a 12.1% stake in Raya Holding in a EGP 1.5 bn transaction, purchasing 516.7 mn shares at an average price of EGP 2.89 apiece, according to an EGX disclosure (pdf). The shares were fully divested by Financial Holding Limited, which exited its entire stake in the company.

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

INFRASTRUCTURE-

Egypt is in talks with a Chinese consortium to build the USD 440 mn fourth phase of the new capital’s light rail transit line, Asharq Business reports, citing unnamed sources. The Chinese state-owned companies — AVIC International and China Railway Major Bridge Engineering — will handle electromechanical works and train manufacturing, while local firms will take on civil works.

FINANCIAL SERVICES-

#1- The Financial Regulatory Authority (FRA) raised the cap on the cash advance that can be granted in consumer finance x5 to EGP 50k per client, as part of efforts to support financial inclusion, according to a statement from the authority. Repayment of previous loans and proof of proper use are prerequisites for approval.

#2- The FRA issued licenses for five companies to engage in new non-banking financial services, according to a statement from the authority. This includes licenses to establish two new investment funds by Bokra Holding — the Bokra Real Estate Investment Fund and the Bokra Metals Investment Fund — as well as a license for Telda Securities Brokerage to receive investment fund subscriptions. Trend Holding is also now authorized to establish companies that issue securities or increase their capital, while True Finance Lease and Factoring can now offer factoring services.

DIPLOMACY-

Regional developments top Abdelatty’s talks with leaders: Foreign Minister Badr Abdelatty held calls with US Special Envoy the Middle East Steve Witkoff, Iranian Foreign Minister Abbas Araghchi, and International Atomic Energy Agency head Rafael Grossi. Discussions focused on containing regional escalations, namely between Iran and Israel.

Tags:

ALSO ON OUR RADAR financial services infrastructure non-banking financial services Raya Holding

PLANET FINANCE

USD bns of capital cross the Atlantic as investor confidence in the US wanes

Investors are increasingly diverting funds to Europe, viewing it as a more stable market amid the “absolute uncertainty” of US tariff policies and increased political intervention under President Donald Trump, Reuters reported yesterday, citing interviews with over a dozen executives and fund managers. Investors are being pushed from the US by fears that Trump’s tariff policies and tax cuts will harm corporate earnings, increase inflation, and widen the budget deficit. Meanwhile, Europe is pulling investors in with a new era of fiscal stimulus marked by increased government spending on defense and infrastructure — especially Germany — and aggressive interest rate cuts from the European Central Bank (ECB).

By the numbers: So far this year, investors have poured over USD 100 bn into European equity funds — a threefold y-o-y increase — while US funds recorded outflows of USD 87 bn, according to LSEG data. This shift is echoed in Germany, Europe’s largest economy, where foreign direct investment has more than doubled to EUR 46 bn over January-April 2025, reaching its highest level since 2022, according to Bundesbank data.

Investors’ rising appetite for European markets comes as a 9 July deadline approaches for a potential trade agreement between Washington and Brussels, with Trump threatening to impose 50% tariffs on all EU goods if no agreement is reached.

Ending a decade of underperformance, European markets dramatically outpaced the US in 1H 2025, with the pan-European Stoxx 600 index’s returns hitting 16% — outperforming “US peers by the biggest margin on record in USD terms during the first half,” Bloomberg reports. The EUR gained 13% y-o-y against the USD in 1H and is forecasted to reach USD 1.20 by year-end, up from USD 1.04 in 2024.

Investors are now overweight European equities (net 34%) and underweight US stocks (net 36%), a Bank of America survey shows. Meanwhile, European equity funds have seen a USD 46 bn inflow so far this year, compared to a USD 66 bn outflow last year. For fixed income, European bond funds have attracted over USD 42 bn, far outpacing the USD 5.6 bn flowing into US funds.

Despite the rally, European stocks remain attractively valued, trading at a 35% markdown to their US peers. They also offer higher dividends and comparable buyback yields, which Goldman Sachs’ Peter Oppenheimer expects to gain momentum. “While [earnings] growth in Europe may not be as strong as in the US, the valuation gap remains very big,” he said.

Analysts are split on Europe’s long-term outlook, with some cautioning that Europe’s prospectus window is temporary, with KfW's Stefan Wintels warning, “This sentiment can quickly turn again.” A potential US rebound hinges on tech strength and Fed rate cuts, though structural changes in Europe’s fiscal policy provide a compelling long-term growth story.

Others see a more permanent shift, with UBS forecasting a EUR 1.2 tn (USD 1.4 tn) of capital rotation to European equities from the US in the next five years.

Not all sunshine and rainbows in the Eurozone: Despite rate cuts by the ECB, lending growth to Eurozone businesses stalled at 2.5% in May from 2.6% in April, as trade uncertainty and weak economic growth weighed on investment, Reuters reports, citing ECB data. The monthly flow of new business loans turned negative for the first time in over a year. While household lending growth edged up slightly to 2.0%, the M3 money supply indicator held steady at 3.9%, signaling a continued but anemic economic activity dominated by uncertainty.

MARKETS THIS MORNING-

Asia-Pacific markets are looking like a mixed bag in early trading today. Investors are once again fretting over US President Donald Trump’s tariff policies as a 90-day pause on higher tariffs — which came into effect in April to grant time for negotiations — is scheduled to expire next week, according to CNBC. Japan’s Nikkei and the Hang Seng Index are both in the red, while South Korea’s Kospi and China’s Shanghai index are each trading up so far. Meanwhile on Wall Street, futures suggest that markets will open just barely in the green.

EGX30	32,858	-1.1% (YTD: +10.5%)
USD (CBE)	Buy 49.53	Sell 49.66
USD (CIB)	Buy 49.55	Sell 49.65
Interest rates (CBE)	24.00% deposit	25.00% lending
Tadawul	11,164	-0.4% (YTD: -7.3%)
ADX	9,958	+0.7% (YTD: +5.7%)
DFM	5,706	+0.4% (YTD: +10.6%)
S&P 500	6,205	+0.5% (YTD: +5.5%)
FTSE 100	8,761	-0.4% (YTD: +7.2%)
Euro Stoxx 50	5,303	-0.4% (YTD: +8.3%)
Brent crude	USD 67.61	-0.2%
Natural gas (Nymex)	USD 3.46	0.0%
Gold	USD 3,316	+0.2%
BTC	USD 107,282	-0.7% (YTD: +14.6%)
S&P Egypt Sovereign Bond Index	878.38	+0.1% (YTD: +13.0%)
S&P MENA Bond & Sukuk	145.29	-0.1% (YTD: +3.8%)
VIX (Volatility Index)	16.73	+2.5% (YTD: -3.6%)

THE CLOSING BELL-

The EGX30 fell 1.1% at yesterday’s close on turnover of EGP 5.9 bn (21.6% above the 90-day average). Local investors were the sole net sellers. The index is up 10.5% YTD.

In the green: Beltone Holding (+2.2%), Alexandria Containers and Cargo Handling (+1.5%), and Egypt Kuwait Holding -USD (+1.0%).

In the red: ADIB (-4.0%), Fawry (-3.4%), and EFG Holding (-3.0%).

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Bonds capital markets Donald Trump economy Europe Financial Markets Planet Finance US

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

Published every Tuesday in EnterpriseAM.

Read going Green

Going Green

Egypt eyes USD 324 bn in climate financing to hit its nationally determined contributions for 2030

The green transition is many things — but cheap isn’t one of them. To meet the country’s update d nationally determined contributions (NDCs) for 2030, Egypt needs to mobilize some USD 324 bn, a senior Environment Ministry official told EnterpriseAM. The lion's share of the total is earmarked for climate mitigation with USD 211 bn, while USD 113 bn is pencilled in for climate adaptation.

But despite an estimated bill totalling USD 324 bn, the country’s available funding currently stands at only USD 76 bn, leaving a USD 248 bn financing gap. The government is looking into a diverse range of funding options locally and internationally to fill the gap, which accounts for more than three-quarters of the total ticket.

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

Extending the timeline to 2035, financing needs are expected to grow even further. The industrial sector will require some USD 130 bn in mitigation and adaptation funding through 2035, alongside USD 144 bn for the electricity sector, USD 57 bn for the transportation sector, and USD 76 bn for waste management, according to a government document seen by EnterpriseAM.

The government aims to raise the share of green projects to 55% of its EGP 1.1 tn public investment plan for this fiscal year, up from 15% in 2020. Key projects include the monorail, the high-speed electric rail line, a national waste management system, and expanded renewable energy initiatives. Egypt has rolled out green projects worth EGP 132 bn across several sectors since 2020, the source said.

All funding options are on the table, with the government targeting all financing instruments available through international institutions, including sukuk, green bonds, sustainability bonds, and other mechanisms, our source said. Financing remains one of the biggest challenges facing environmental solutions, given the large-scale investments needed to develop projects that meet green and sustainable standards in execution, monitoring, and maintenance, we were told.

On this front, it's likely we could hear about sukuk-backed renewables projects soon. The government’s sukuk-funded Ras Shukier project is located in an area that has already been earmarked for several upcoming climate-friendly projects, including a green industrial zone for petrochemicals and green hydrogen that was approved by the cabinet earlier this year. The cabinet also gave an initial nod for the Transport Ministry to proceed with contracts for a green hydrogen and green ammonia project in Ras Shukeir, along with Saudi renewables giant Acwa Power and local energy and infrastructure leader Hassan Allam Utilities’ 550 MW wind farm in the area.

A still-unnamed Gulf sovereign wealth fund was gearing up to announce a big-ticket project in the Red Sea project “in the coming days,” a senior government source told us last month. In other signs that sukuk momentum is growing, Egypt issued its second-ever sovereign sukuk issuance just last week in a USD 1 bn issuance to Kuwait Finance House as a part of a wider USD 5 bn program. The government is also set to move forward with its plan to issue the first sovereign sukuk denominated in EGP at the beginning of the new fiscal year “despite current events,” Finance Minister Ahmed Kouchouk told EnterpriseAM last month.

The government is calling for more private sector involvement, particularly in the food security, agriculture, and renewable energy sectors, as part of its 2024-2027 green transition strategy, according to an Environment Ministry statement.

Around USD 500 mn from international development banks has already been used to reduce the risks associated with private investment in the renewables sector, according to the statement. A similar approach is now being applied to food security and climate adaptation in agriculture, with a focus on improving crop resilience and boosting self-sufficiency.

But going green is also an investment that can pay returns, with the country’s sizable and growing network of wind and solar projects helping shield Egypt from an even greater reliance on LNG imports to keep the lights on amid a dip in domestic oil and gas production. Having renewables play a big part in the energy mix not only leads to predictable and stable electricity prices amid a volatile international energy market, it could also lead to green energy exports.

Greening the economy will also help shield many of the country’s key sectors from the EU’s incoming Carbon Border Adjustment Mechanism — known by its acronym CBAM — particularly in the fertilizer, cement, iron, and aluminum industries. The carbon border tax will make up the difference between the local carbon price — if there is one — and the EU’s carbon price, pushing Egypt to introduce a carbon tax of its own and companies to greenify their production lines so they can stay competitive in European markets.

Your top green economy story for the week: The number of environmentally-friendly hotel rooms in Egypt surged to around 85.7k in 1Q 2025 — up from just 40k in 2022 — now representing over 37% of the country’s total capacity.

Tags:

development finance environment Environment Ministry going green renewables

CALENDAR

JULY

6 July (Sunday): S&P Global to release Egypt’s Purchasing Managers Index report for June

6-7 July (Sunday-Monday): Brics Summit, Rio de Janeiro

10 July (Thursday): Monetary Policy Committee’s fourth meeting

10 July (Thursday): Capmas to release inflation data for June

15-16 July (Tuesday-Wednesday): The Egypt Mining Forum.

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

Etihad Airways to launch twice-weekly flights to Alamein

AUGUST

7 August (Thursday): The Finance Ministry to begin disbursement of 50% of exporters’ pre-June 2024 dues over a four-year plan.

28 August (Thursday): Monetary Policy Committee’s fifth meeting.

Tourism Development Authority to waive late payment penalties for land purchases if full installments are paid

SEPTEMBER

The Egyptian-Moroccan Business Council to send a delegation of 23 local companies to Rabat.

The Engineering Export Council of Egypt will ship a commercial delegation to Russia to ramp up exports to European markets.

Egypt Education Platform (EEP) to launch two new schools in Alexandria and Somabay

Egypt Otsuka’s nutritional products factory in Tenth of Ramadan to begin operations, with exports to Gulf countries expected by January 2026

OCTOBER

2 October (Thursday): Monetary Policy Committee’s sixth meeting.

7 October (Tuesday): The 2025 EnterpriseAM Egypt Forum.

12-16 October (Sunday-Thursday): Cairo Water Week, Cairo.

19-22 October (Sunday-Wednesday): Arab African Investment and International Cooperation Summit.

October: The third iteration of the Export Smart Exhibition and Conference.

NOVEMBER

16-19 November: Cairo ICT 2025, Egypt International Exhibition Centre.

20 November (Thursday): Monetary Policy Committee’s seventh meeting.

November: Egypt to join the EU’s Horizon Europe research and innovation program.

DECEMBER

1-4 December: Egypt Defence Expo (EDEX), Egypt International Exhibition Centre.

25 December: (Thursday): Monetary Policy Committee’s eighth meeting.

EVENTS WITH NO SET DATE

Mid-2025: EGX launches sustainability index.

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

2Q 2025: Safaga Terminal 2 to start operations

1H 2025: EGX launches a sharia-compliant sustainability index.

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

1H 2025: The Egyptian-US Investment Forum.

1H 2025: The Egyptian Mineral Resources Authority will relaunch a global tender for gold exploration through Shalateen Mineral Resources company.

3Q 2025: Nasr Automotive begins locally manufacturing passenger cars.

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

2026

Early 2026: Passenger operations on the New Administrative Capital–Nasr City monorail scheduled to begin.

1Q 2026: Trial operations for the Ain Sokhna–Sixth of October section of Egypt’s first high-speed rail line scheduled to begin.

1 January: European Union’s Carbon Border Adjustment Mechanism (CBAM) to fully come into effect

May 2026: End of extension for developers on 15% interest rates for land installment payments

2027

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

April 2027: Tenth of Ramadan dry port and logistics hub to begin operations.

EVENTS WITH NO SET DATE

2027: Egypt to host EBRD’s annual meetings for 2027.

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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