Sections

About

Privacy & Support

Get EnterpriseAM daily

Available in your choice of English or Arabic

Tuesday, 11 Jun 2024

What We’re Tracking Today
Economy
M&a Watch
Healthcare
Ipo
Startup Watch
Debt Watch
Last Night’s Talk Shows
Also On Our Radar
Planet Finance
Going Green
Calendar

Inflation falls 4.4 percentage points in May to its lowest level in more than a year

An independent publication supported by

Opening up a world of opportunity

Realize More

Live More

Powering with nature

Driving growth

Today at a glance

1

ECONOMY

Inflation falls to lowest level in over a year.
2

M&A WATCH

SFE acquires a 20% stake in Care Pharmacies -report
3

Healthcare

Alameda to invest USD 245 mn on local, regional expansion.
4

IPO

Everything you need to know about Act Financial long-awaited IPO next month.
5

Startup watch

Fintech player Sahl closes USD 6 mn in funding round led by the state’s Ayady Investments.
6

LAST NIGHT’S TALK SHOWS

Blinken’s meeting with El Sisi to push for a Gaza ceasefire dominated the airwaves.
7

ALSO ON OUR RADAR

Masria Digital Payments ramps up payment card production with new production lines.
8

PLANET FINANCE

Amid election surprises, EM investors are bullish on local debt.
9

Going Green

MidEast funding towards climate tech tripled to USD 5 bn last year, but less than 2% went to entrepreneurs in Egypt and the region.

Tuesday, 11 Jun 2024

What We’re Tracking Today
Economy
M&a Watch
Healthcare
Ipo
Startup Watch
Debt Watch
Last Night’s Talk Shows
Also On Our Radar
Planet Finance
Going Green
Calendar
1

WHAT WE’RE TRACKING TODAY

Egyptian government gears up to launch online medical tourism platform

Good morning, all. Apologies for a later than usual issue today due to technical issues at Enterprise HQ. After a slow start to the week, we’ve got a packed issue for you this morning. Not only do we have a lot of news, but we’ve got some good news too — with the latest inflation data showing prices rising at their slowest in over a year. We’ve got this and much more in this packed issue, so let’s jump into it.

PSA-

The countdown to the Eid break begins: Saturday 15 June through Thursday 20 June will be off for all public sector workers in observance of Eid El Adha, according to a cabinet statement. We’re still waiting for confirmation from the Labor Ministry, Central Bank of Egypt, and the EGX that the private sector, banks, and bourse will follow suit.

WEATHER- Cairo is turning up the heat today, with a high of 38°C and a low of 25°C, according to our favorite weather app.

It’s also getting hotter in Alexandria, with a high of 32°C and a low of 22°C.

SPEAKING OF SCORCHING TEMPERATURES: Several MPs have urged the government this week to end rolling blackouts in Upper Egypt during heat waves that recently saw temperatures in Luxor and Aswan reach 49°C, Al Arabiya reports.

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

** Want to subscribe? Tap or click here to get your own copy delivered every weekday before 7am Cairo time — without charge.

WATCH THIS SPACE-

#1- Egypt to launch online medical tourism platform this month: The government is set to launch an online platform for medical tourism within the next two weeks, the Health Ministry’s medical tourism advisor Samih Amer, told Al Arabiya. The platform — which the government has been developing for the last year — will allow users to reserve spots in any hospital in Egypt and apply for and receive a visa for the medical treatment within 72 hours, Amer added.

To sweeten the pot: As an added incentive, patients will also be able to save 25% on EgyptAir flights and get better rates at hotels during their stay.

Remember: Egypt has been trying to position itself as a medical tourism hub to attract FDI and to open fresh FX revenue streams from patients from Africa, the Middle East, and Europe coming here for treatment on the back of our talented and well-trained medical staff and the competitive price point Egyptian hospitals can offer.

#2- EBRD to unveil an electricity project soon: The European Bank for Reconstruction and Development (EBRD) will announce a new electricity production project to be carried out in partnership with the private sector, the bank’s Egypt head Khaled Hamza told Al Arabiya, adding that we can expect the news during the Egypt-EU investment conference scheduled for 29-30 June.

Also in the pipeline: The bank has plans to take part in financing a “major” green hydrogen project in Egypt next year, Hamza said. Hamza also teased that the bank is interested in acquiring minority stakes in a few local banks.

HAPPENING TODAY-

#1- A new government to be formed by the end of the day? MP and TV presenter Mostafa Bakry said over the weekend that we should get ready for a new government to be formed by the end of today (watch, runtime: 1:33:28). We’re yet to hear anything official on the matter and some think it could take a little longer for a new government to form, including fellow talk show host Ahmed Moussa who thinks the “official announcement of the new government could be on Tuesday or Wednesday, or right after the Eid Al Adha break” (watch, runtime: 5:09 | 3:51).

#2- Shoukry attends day two of Brics FMs meeting: Foreign Minister Sameh Shoukry will participate in the second and final day of the meeting of Brics foreign ministers in Russia today.

Worth noting from day 1: Shoukry weighed in on cooperation mechanisms between Brics countries and cooperation on international and regional issues during his participation in two separate sessions. He also discussed the situation in Gaza and the need to boost locally-currency trade between Brics members.

On the sidelines: Shoukry met with his Russian counterpart Sergey Lavrov and South Africa’sInternationalRelations and Cooperation Minister Naledi Pandor. Both meetings centered around the war in Gaza and bilateral relations.

THE BIG STORY ABROAD-

Enter Apple Intelligence, Apple’s shot at establishing itself as an AI player to be reckoned with in partnership with none other than OpenAI. Apple boss Tim Cook the “next big step” that will see the iPhone and Macbook maker integrate ChatGPT on its devices and reintroduce Siri as the virtual assistant it was originally promised to be. Check out Axios’ full rundown of what to expect coming to an Apple device near you soon here or watch the full WWDC24 keynote here.

Not everyone is thrilled though, including Tesla CEO Elon Musk who took to his personal venting platform X to say that he would ban Apple devices at his companies if the tech giant integrates OpenAI into its operating systems on the back of it being an “unacceptable security violation.”

And that includes Wall Street, which despite the mostly excited media hype around the announcement saw Apple shares falling nearly 2% on the Nasdaq yesterday.

While in our neck of the woods, hopes for a ceasefire in Gaza are building again with the UN Security Council giving its backing to a US resolution to end the 248-day-old conflict that has already claimed over 37k lives.

And over in Europe, it looks like Macron’s wager on a snap election is at risk of backfiring, with the nation’s first opinion poll following the announcement forecasting Marine Le Pen’s far-right National Rally coming in first.

*** 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: We take a look at MidEast funding in climate tech, where it’s going, and how much of it goes to Egypt.

Tags:

Babbo‘s Taverna pop-up on Somabay’s Mesca Beach for Eid 2024 is bringing the party vibes to the south with our favorite DJs spinning tracks that will keep you moving to the beat. Boho-chic relaxed vibes, delicious Mediterranean x Red Sea fusion cuisine, and infamous signature cocktails. Babbo’s Taverna is more than a destination — it’s a lifestyle.

2

ECONOMY

Egypt’s inflation falls to lowest level in over a year, recording 28.1% in May

Annual inflation falls to lowest level in over a year: Annual urban inflation cooled to 28.1% in May, down from 32.5% in April on the back of considerably slower food price increases, as traders continued to price in a lower exchange rate following the float of the EGP, according to figures from state statistics agency Capmas. This is the lowest inflation figure recorded since January 2023.

Driving the fall: Food and beverage prices — the largest component of the basket of goods and services used to calculate headline inflation — continued to rise but a significantly softer rate of 31.0% y-o-y in May, down 9.5 percentage points from a month prior.

Inflation softened across (almost) all segments: “Eleven items of the consumer price index recorded a deceleration by an average of 2.7%, except for “recreation and culture” … due to a surge in “package holidays” item,” Al Ahly Pharos said in a note seen by Enterprise.

Monthly inflation in the negative for the first time in nearly two years: On a monthly basis, inflation fell on all items for the first time since June 2022, with prices falling 0.7% m-o-m. This is the biggest drop inflation has seen m-o-m since June 2019.

The trend persists: Food and beverage prices dipped 3% from the month before, marking the second consecutive month of deflation. This was driven by a dip in the prices of bread and cereals, meat and poultry, and vegetables.

Core inflation: Annual core inflation — which excludes volatile items such as food and fuel — slowed to 27.1%, down from 31.8% in April, according to data from the Central Bank of Egypt. Monthly core inflation, meanwhile, was in the negative, recording -0.8%, down from 0.3% the month before.

Even better than expected: Analysts polled by Reuters and Bloomberg saw inflation cooling, but not as much as it did. The 19 analysts polled by Reuters saw headline inflation decreasing to a median of 30.4%.

Don’t celebrate yet: “Disinflation might be temporarily interrupted by mid-year readings due to measures including decreasing subsidies on bread, higher electricity and meds prices, and a potential hike in petroleum products’ prices,” Al Ahly Pharos says. Thndr Securities’ Amr Elalfy agrees, telling Enterprise that “these pressures may push inflation to rebound towards 30% or slightly higher.” While “favorable base effects may mitigate some impacts of these measures, we must remain vigilant about their influence on inflation figures,” economist Mona Bedeir said in a note shared on LinkedIn.

What does this mean for monetary policy going forward? Don’t expect cuts before “there are clear signs of tamed inflation and well-anchored inflation expectations,” Bedeir said, adding that she doesn’t see the central bank cutting rates before 4Q 2024. Meanwhile, Capital Economics’ MENA economist James Swanston sees the central bank cutting rates even later, penciling in early next year.

Things could look up later in the year: “We expect the disinflation process to resume later in the year and into 2025,” Swanston added.

The international press also picked up the story: Reuters

Tags:

This publication is proudly sponsored by

3

M&A WATCH

Egypt’s sovereign wealth fund acquires 20% of Care Pharmacies for EGP 75 mn. PLUS: City Lab offloads 13.8% of the company on the EGX

SFE acquires 20% of Care Pharmacies: The Sovereign Fund of Egypt (SFE) has acquired a 20% stake in the local pharma chain Care Pharmacies for EGP 75 mn via its healthcare sub-fund, Asharq Business reported, citing two sources it says are in the know.

The transaction will see the SFE take control of 45 branches out of the 220 run by Care Pharmacies, one of the sources said.

What’s next: The acquisition — which comes under the SFE’s partnership with B Investments and El Ezaby — is set to be finalized in the coming weeks, according to one of the sources.

Remember: The SFE partnered with private equity firm B Investments and El Ezaby last year to set up pharma logistics and distribution firm EZ International. The SFE and B Investments also unveiled plans in January 2023 to invest in the healthcare and pharma industries under two agreements that could channel more than EGP 2 bn into local businesses.

CITY LAB OFFLOADS MORE SHARES-

City Lab sold some 88 mn shares — representing 13.8% of the company — for a total of EGP 51 mn in a block trade transaction on the EGX yesterday, according to an EGX bulletin.

ICYMI: Premium Diagnostics UAE last month acquired a 9.4% stake in City Lab, snapping up some 60 mn shares for EGP 1 apiece.

Who could the buyers be? While it’s unclear who acquired the shares, we’ve been expecting more of Premium Diagnostics’ subsidiaries to acquire stakes in City Lab. The medical diagnostic services provider’s extraordinary general assembly last month approved selling up to EGP 250 mn worth of shares to a consortium that includes Premium Diagnostics’ Saudi, Emirati, US, and Egyptian arms.

Tags:
4

Healthcare

Egyptian healthcare service provider Alameda to invest USD 245 mn on local, regional expansion

Alameda Healthcare earmarks USD 245 mn for local, regional expansion: Local healthcare services provider Alameda Healthcare will invest some USD 245 mn to expand its footprint in Egypt and across the region, through setting up new hospitals, acquiring existing ones or expanding its own hospitals, CEO Neeraj Mishra told Al Arabiya on the sidelines of the African Health ExCon in Cairo.

LOCALLY-

Alameda will spend some USD 125 mn to expand locally, adding some 600 beds to its portfolio in Egypt — namely Greater Cairo and Assiut — Mishra said.

A couple of new hospitals in the making: The firm has set up an EGP 1 bn hospital in Giza with the capacity to hold 200 beds and will start working on equipping and furnishing it early next year. It will also set up an EGP 2 bn, 150-bed hospital in Assiut, scheduled to open its doors in 2027.

And expanding already existing hospitals: The healthcare provider wants to add its Dar Al Fouad Hospitals’ capacity, with plans to invest EGP 700 mn to add 80 beds to its Sixth of October branch and 32 beds to its Nasr City branch.

Also in the pipeline: Alameda will establish seven new clinics scattered across the country’s governorates, including Greater Cairo, Assiut, and Mansoura, Mishra said.

AND- The latest on Alameda’s new capital hospital: The hospital should start operations by the end of 2026 or early 2027, Mishra said, adding that the firm now expects to invest EGP 2 bn to operate and manage the 300-bed hospital in the new capital.

Remember: The healthcare giant inked the agreement to operate and manage the new administrative capital’s “first and largest” hospital back in 2021.

REGIONALLY-

The healthcare provider plans to invest USD 120 mn over the coming two years to acquire and run hospitals and “healthcare assets” in Nigeria, Kenya, Tanzania, and Saudi Arabia, Mishra said.

Tags:

5

IPO

Everything you need to know about Act Financial long-awaited IPO next month

Act Financial's IPO goes live next month: Investment management firm Act Financial will proceed with its long-awaited IPO on the EGX in July, offering some 32% of the company’s shares following a capital increase, according to the IPO prospectus published on the EGX yesterday. The subscription period for retail investors will take place between 9-23 July and institutional investors will get a chance to subscribe between 9-18 July.

The breakdown: The current shareholders won’t exit any of its existing shares for the IPO, but will instead increase the company’s capital to EGP 281.4 mn, up from EGP 191.4 bn, by issuing 360 mn new shares, on top of the company’s current 765.7 mn shares. The new shares will be divided into 300 mn shares for institutional investors and 60 mn for retail investors. The company aims to raise around EGP 1.04 bn through the offering.

Act thinks it has got an offer that will tempt many investors: The company has set the IPO price at EGP 2.90 a piece, a 36% markdown from the fair value price set at EGP 4.54 per share. The sizable markdown from the fair value was due to an extra 20% reduction that the company decided to throw in to “encourage the market” to pile into the offering, since the IPO market in Egypt hasn’t seen offerings for a while now, Managing Partner Mostafa Abdel Aziz told Al Arabiya Business in an interview (watch, runtime: 6:30).

Where’s the money going? The offering’s entire proceeds will be used to acquire “significant minorities in listed companies,” said Abdel Aziz.

It’s all about the timing: Since the local market hasn’t seen much IPO activity for a while now, traders and investors are laying in wait to jump on promising prospects, Abdel Aziz said. The offering is expected to perform strongly and “we’re looking to set a successful example with this offering,” Abdel Aziz added.

Remember: We first caught wind of Act’s IPO plans back in 2022, when Abdel Aziz told us that the investment firm is aiming to offer up to a 40% stake on the EGX in early 2023.

Advisors: Zilla Capital will manage the IPO, Matouk Bassiouny & Hennawy will act as the company’s legal advisor, Baker Tilly will provide auditing services, and Financial Advice Corporate Transactions will be the independent financial advisor to the transaction.

Tags:
6

Startup watch

Egyptian fintech startup Sahl closes USD 6 mn in funding round led by the state’s Ayady Investments

Raising USD 6 mn? Sahl: Cairo-based fintech startup Sahl has raised USD 6 mn in a Series A round and seed funding led by the government’s Ayady for Investment and Development, according to a statement (pdf). The startup plans to use the funds to “refine and develop new offerings, prioritizing a frictionless, time-saving, and secure user experience.”

About Sahl: Founded in 2020, Sahl allows individuals and companies to pay bills and make payments through its mobile application. This includes utilities like electricity, water, and gas, as well as other services such as internet, telecom, TV subscriptions, and school fees. The company now serves over 12 mn customers every month and 15 mn households across the country.

A direct line with state entities: The company “is one of the few” that work directly with a number of government entities so that users can pay their bills, including the Egyptian Electricity Holding Company for electricity bills, the New Urban Communities Authority for water bills, all four of the country’s telecom operators, Petrotrade for gas bills payment, and Cable Network Egypt for TV subscriptions.

Expansion on the horizon? The startup wants to set up shop in Saudi Arabia following its launch in the UAE.

What they said: “We are committed to addressing the challenges faced by consumers in utility payments,” said CEO Abdullah Assal. “We developed the world’s first mobile solution for charging utility meters using near-field communication technology,” CTO Ibrahim Assal added.

Tags:
7

DEBT WATCH

Raya’s Aman issues EGP 1 bn in securitized bonds

Raya Holding’s fintech arm Aman Consumer Finance has issued EGP 1.04 bn worth of securitized bonds, according to a statement (pdf) from CI Capital, the sole financial advisor on the transaction. The issuance was backed by an EGP 1.2 bn portfolio of consumer finance contracts issued by Aman for Consumer Finance, Aman said in a separate release (pdf)

The details: The issuance came in four tranches with tenors of 6, 9, 13, 24 months and ratings of Prime 1 and A from Middle East Rating Services (MERIS).

No. 4: The issuance is part of a wider EGP 5 bn, three-year securitization program that kicked off in February 2023. The company last tapped the securitization market with an EGP 1.1bn issuance in December 2023.

Two birds, one stone: The portfolio used to back the fourth issuance overlaps with that used to back the third issuance of the program — a first for the Egyptian market. This only happened after the Financial Regulatory Authority greenlit the move.

What’s next? Aman plans to take to market the fifth issuance of the program in the third quarter of the year, Aman for Financial Services CEO Hazem Moghazi said.

Advisors: CI Capital was the sole financial advisor, arranger, and issuance manager. The National Bank of Egypt was custodian and underwriter alongside the Arab African International Bank. Zaki Hashem provided counsel and United for Accounting, Auditing, and Tax Consulting was auditor.

DATA POINT: The issuance brings the total value of securitized bonds issued in Egypt in 2024 so far to around EGP 14.9 bn, according to data tracked by Enterprise.

Tags:

8

LAST NIGHT’S TALK SHOWS

Blinken’s meeting with El Sisi to push for a Gaza ceasefire dominated the airwaves

Diplomacy takes center stage: The nation’s talking heads covered President Abdel Fattah El Sisi’s meeting with US Secretary of State Antony Blinken yesterday to discuss ongoing efforts to secure a ceasefire in Gaza, the release of hostages, and Egypt’s initiatives to deliver humanitarian aid.

Blinken blamed Hamas for delaying the ceasefire, stating that it is the only party that has not yet agreed to Biden's proposal, before leaving Egypt for Tel Aviv, Lamees El Hadidi highlighted on Kelma Akhira (watch, runtime: 4:36).

But not everyone agrees, including Ala Masouleety’s Ahmed Moussa argued, who argued that “Hamas is not the problem. The problem lies with Israel. Netanyahu does not want a ceasefire. The US should pressure Netanyahu to agree to the American initiative and other proposals,” (watch, runtime: 3:38).

Tags:
9

ALSO ON OUR RADAR

Masria Digital Payments ups payment card production with new production lines. PLUS: Al Ahly CIRA, Inversion, Shalateen Mineral Resources

MANUFACTURING-

MDP to ramp up payment card production: Local e-payments firm and payment cards manufacturer Masria Digital Payments (MDP) is adding three production lines to its factory in Tenth of Ramadan City this year, with investments of USD 2 mn financed by a bank loan, CEO Ahmed Nafie told Enterprise. The new production lines will increase MDP’s annual production capacity by 20% to 36 mn payment cards.

Also in the pipeline: The company is looking into expanding into the Gulf, East Asia, and Europe, Nafie added.

DEBT-

Al Ahly CIRA seeks financing for Saxony Egypt University: Al Ahly CIRA — an education investment company set up by CIRA Education and Al Ahly Capital Holding in 2021 — is in talks with the National Bank of Egypt to secure loans worth EGP 500-600 mn to partially fund the c. EGP 1 bn first phase of the Saxony Egypt University of Applied Sciences and Technology (SEU), CIRA CEO Mohamed El Kalla told Al Borsa. Al Ahly CIRA and Al Ahly Capital Holding have already financed almost half of the first phase’s costs, El Kalla added.

Phase one: Al Ahly CIRA will commence operations at SEU in September, with a four-program first phase, including nursing and public health, automotive technology, artificial intelligence, and logistics, El Kalla said.

The endgame: The university’s full development is set for completion within seven years, according to El Kalla.

REAL ESTATE-

Inversion in talks to manage USD 3 bn real estate projects with Emirati investors: Egyptian project management firm Inversion is negotiating with Emirati investors to manage two major real estate projects in Egypt worth a combined USD 3 bn, Chief Development Officer Kamel Ibrahim told Al Borsa.

The projects: Inversion wants to manage a USD 1.5 bn integrated development in New Cairo that will have residential, commercial, and medical components. Negotiations to acquire the land from the New Urban Communities Authority are in their final stages and the project hopes to commence construction by the end of this year or early 2025, according to Ibrahim. Inversion is also in discussions with another Emirati investor to manage a second integrated development project with an investment exceeding USD 1.5 bn in a still undecided location.

An office in Dubai: Ibrahim also revealed to the news outlet that his company is planning to open a new office in Dubai by the end of the year.

MINING-

Shalateen’s four-times-extended gold tender comes to a close: Three firms from Russia, UK, and Saudi Arabia have been awarded gold exploration licenses by state-owned Shalateen Mineral Resources, a source from the company told Al Borsa without revealing the names of the company. The tender had been live for over a year and was extended four times due to a lack of bidders after it was launched in April 2023. The official announcement of the winning companies will be made in the coming days, the source added.

FINANCIAL SERVICES-

BHM Capital plans to expand to Egypt: The UAE’s BHM Capital is set to enter the Egyptian market before the end of this year, the company’s CEO Abdel Hadi Al Sadi told CNBC Arabic. The financial services firm will enter Egypt through a joint venture and it is currently in negotiations with “more than one party” to do this.

Why now? The firm with an asset portfolio under management of over USD 10 bn had been waiting for the country to float the EGP before expanding into Egypt, Al Sadi added.

INVESTMENT-

Investment area up for grabs in Sharm El Sheikh International Airport: The Egyptian Airports Company (EAC) has launched an international closed-envelope tender for the development and operation of a 450k sqm investment zone at the Sharm El Sheikh International Airport, using the build-operate-transfer system, Al Borsa reports. The project will involve the construction, management, operation, marketing, and maintenance of the investment area, located on Al Salam Road, Sharm’s main thoroughfare.

Tags:
10

PLANET FINANCE

Amid election surprises, EM investors are bullish on local debt

EM investors pivot towards local bonds: In the wake of election disruptions that have upended the “long-standing” positions of major developing economies’ bond markets, emerging market investors such as Ashmore and Ninety One are shifting towards buying local bonds and relative value currency securities, Bloomberg reports. France’s decision to hold snap elections, for example, sent the EUR to its weakest in a month.

Investors are liking the risk: “We’ve been increasing the frontier risk, through both local bonds and FX derivatives. We like the story in Egypt, we like some of the stories in smaller Latin American names. We’re trying to diversify and not load up,” Christine Reed, a portfolio manager at Ninety One told Bloomberg.

Election “surprises” have triggered the search for alternative return avenues, with the MXN — once favored for carry trades — currently losing investor favor after a bout of volatility following the elections, with concerns that potential economic reforms will increase the government’s influence in the economy. Meanwhile, the Polish PLN is gaining traction for its perceived insulation from political volatility.

Appetite for Turkey’s debt is also on the rise: In Turkey, the post-election economic overhaul, including the central bank’s aggressive rate hikes and investor-friendly policies, have sparked a surge in demand for local-currency assets, with foreign holdings of TRY-denominated bonds jumping tenfold in a year, reflecting investor confidence.

What are EMs’ selling points? “We see cleaner positioning as a positive technical factor, but more importantly for us is a country’s monetary and fiscal policy stance, and inflation and growth profiles. Otherwise, we are running the risk of picking up pennies in front of a steamroller,” says Valentina Chen, co-head of emerging-market debt at Mackay Shields.

MARKETS THIS MORNING-

Asia-Pacific markets are mixed on their return from a public holiday, with Japan’s Nikkei up 0.49%, while the Hang Seng is down 1.4% — seemingly unaffected by the rally over on Wall Street, which saw the Nasdaq and S&P 500 hit fresh highs yesterday.

EGX30

25,897

+0.9% (YTD: +4.0%)

USD (CBE)

Buy 47.65

Sell 47.78

USD (CIB)

Buy 47.65

Sell 47.75

Interest rates (CBE)

27.25% deposit

28.25% lending

Tadawul

11,854

0.0% (YTD: +0.5%)

ADX

8,990

+0.4% (YTD: -4.6%)

DFM

3,974

-0.2% (YTD: -2.1%)

S&P 500

5,361

+0.3% (YTD: +12.4%)

FTSE 100

8,228

-0.2% (YTD: +6.4%)

Euro Stoxx 50

5,016

-0.7% (YTD: +11.0%)

Brent crude

USD 81.63

+2.5%

Natural gas (Nymex)

USD 3.00

+3.3%

Gold

USD 2,328.60

+0.1%

BTC

USD 69,637.90

-0.1% (YTD: +64.8%)

THE CLOSING BELL-

The EGX30 rose 0.9% at yesterday’s close on turnover of EGP 2.7 bn (42.1% below the 90-day average). Regional investors were net sellers. The index is up 4.0% YTD.

In the green: Mopco (+5.3%), AMOC (+5.3%), and Juhayna (+3.9%).

In the red: Palm Hills Development (-2.5%), Telecom Egypt (-1.3%), and Eastern Company (-1.3%).

CORPORATE ACTIONS-

B Investments will pay out dividends of EGP 1 per share on its 2023 earnings, it said in an EGX disclosure (pdf).

Tags:

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

Published every Tuesday in EnterpriseAM.

Read going Green
11

Going Green

MidEast funding towards climate tech tripled to USD 5 bn last year, but less than 2% went to entrepreneurs in Egypt and the region

MidEast funding in climate tech is heating up despite a global slowdown: Middle East players invested a total of USD 5 bn in climate tech around the world in the 12-month period ending September 2023, nearly triple the USD 1.8 bn deployed a year earlier, according to PwC’s 2023 Middle East Climate Tech Report (pdf).

Defying the trend: The upswing came amid a global slump in climate tech funding, which dipped by about 43% y-o-y to around USD 65 bn in 2023 on the back of a shortage in primary funding sources and macroeconomic headwinds, according to the report.

Yet, less than 2% of that spending has gone to local entrepreneurs: Middle East players funneled some USD 69 mn into climate tech in the region during the period — a paltry 1.4% of their total investments. Instead, 70% of the funds went to innovators in North America, followed by China (14.8%), Asia Pacific (9.8%), and Europe (4%).

Why? Middle East investors are reluctant to include regional entrepreneurs — which the report describes as the “missing link” in their investment strategy — due to a focus on traditional performance metrics and a preference for large-scale national projects. Measures such as ROI, for instance, are difficult to forecast for new technologies. Additionally, prestigious government projects eclipse the capabilities of smaller firms.

Investors around the globe are channeling less into the Middle East, too: Total funding for climate tech innovators based in the Middle East dropped 84.8% y-o-y to USD 152 mn during the period.

WHERE DOES EGYPT STAND?

Egypt is the third largest recipient of funding in the region: Local companies received some USD 210 mn in global climate tech funding between 2018 and September 2023 — 11.4% of the total USD 1.9 bn funneled into the Middle East during that period. The lion’s share went to the UAE (63.2%), followed by Saudi Arabia (24.9%).

And ranks sixth in outbound investments: Egyptian investors deployed a combined c. USD 30 mn in climate tech globally in 2022 and 2023, coming in 6th at the regional level. KSA claimed the top spot with USD 3.9 bn of investments, followed by the UAE (USD 2.1 bn), Qatar, Kuwait, and Oman.

We have a handful of climate tech innovators in the motherland: Homegrown startups Natrify and TileGreen in November were featured on PwC’s first Net Zero Future50 Middle East report (pdf) — a list of 50 startups in the Middle East implementing new technologies aimed at reducing emissions and addressing the impacts of global warming. Founded in 2020, Natrify produces biodegradable packaging and bioplastic products to help businesses go green. Meanwhile, TileGreen, which launched back in 2021, produces green paving tiles and sustainable building materials from plastic waste. The report also includes a number of local companies that are flagged as “ones to watch,” including:

  • Dajin Platform, a fintech platform and marketplace that seeks to provide poultry breeders with access to finance.
  • Bekia, which aims to facilitate the recycling of inorganic waste through a system of collection and financial rewards.
  • Plstka, a tech recycling company that offers a gamified reward app.
  • Fuelin, which digitizes fuel payments for commercial vehicles.

The energy sector is the most heavily funded: The majority of global climate tech funds invested in both Egypt and Saudi Arabia between 2018 and September 2023 have gone into the energy sector, USD 148 mn (70.5%) and USD 369 mn (80.2%), respectively. The energy sector also received the greatest share of inbound investments at the regional level in 2023, succeeded by the mobility sector. These sectors are two of the main sources of greenhouse gas emissions, accounting for a combined 63% of the Middle East’s carbon footprint.

What can be done to help climate tech startups scale up? Startups are taking a long time to scale up their operations, and unicorns — those valued at over USD 1 bn — are scarce. To help local entrepreneurs grow and build an ecosystem of climate tech, governments can offer more incentives to private players to stimulate investment in startups, the report suggests. These include tax breaks, subsidies, and measures aimed at minimizing investment risk — such as a system for offtake agreements and mechanisms to help investors exit with sufficient returns. Other suggestions that can be implemented by public as well as private players include:

  • Setting up funds that are dedicated to climate tech innovations. Sovereign wealth funds, private investors, and other players could be offered incentives to invest in these funds.
  • Introducing regulations that encourage innovation — such as building codes that require the use of sustainable materials, which increase the demand for such materials.
  • Leveraging the higher education system, which could set up incubators or accelerators and develop new curricula to cultivate environment-related skills, including climate engineering.
  • Efforts by industry leaders to support smaller entrepreneurs, such as by building R&D labs, promising to buy certain amounts of innovative products from small firms through offtake agreements, and prioritizing purchases from innovative startups.
Tags:

CALENDAR

2024

JUNE

15-20 June (Saturday-Thursday): Eid El Adha (national holiday).

29-30 June (Saturday-Sunday): EU-Egypt Investment Conference.

30 June (Sunday): June 30 Revolution Day (national holiday).

JULY

2-3 July (Tuesday-Wednesday): Aswan Forum for Sustainable Peace and Development, Cairo, Egypt.

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

16-17 July (Tuesday-Wednesday): The Egypt Mining Forum, Cairo, Egypt.

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

23 July (Tuesday): Revolution Day (national holiday).

AUGUST

4-5 August (Monday-Tuesday): Egypt Expat Forum.

SEPTEMBER

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

5 September (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

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

25-26 September (Wednesday-Thursday): The Asian Infrastructure Investment Bank’s (AIIB) 2024 annual meeting, Samarkand, Uzbekistan.

OCTOBER

6 October (Sunday): Armed Forces Day.

17 October (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

13-17 October (Sunday-Thursday): Cairo Water Week, Water and Climate: Building Resilient Communities, Cairo, Egypt.

21-27 October (Monday-Sunday): The World Bank and IMF annual meetings.

NOVEMBER

4-8 November (Monday-Friday): World Urban Forum, Cairo, Egypt.

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

26-28 November (Tuesday-Thursday): Egypt Energy Show, Cairo, Egypt.

DECEMBER

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

EVENTS WITH NO SET DATE

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.

3Q 2024: Egyptian-Armenian Joint Committee.

November 2024: Egypt to host the World Urban Forum (WUF12).

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

End of 2024: Shalateen Mining Company to launch a gold exploration tender in the Eastern Desert.

2025

EVENTS WITH NO SET DATE

2Q 2025: Safaga Terminal 2 to start operations.

2027

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

EVENTS WITH NO SET DATE

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

Now Playing
Now Playing
00:00
00:00