Israeli gas flows could return pre-war levels by next week

Wednesday, 15 Nov 2023

Israeli gas flows could return pre-war levels by next week

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Energy

Israeli gas flows could return to pre-war levels by next week.

Real estate

Palm Hills to break ground on EGP 65 bn development in mid-2024.

INVESTMENT WATCH

Qatar expected to invest USD 1.5 bn in Egyptian industrial projects in 2024.

Startup watch

Edtech startup Akhdar lands investment from Saudi accelerator.

WAR WATCH

Israel begins raid on Al Shifa Hospital + Israeli officials reframe Gaza displacement plan.

EARNINGS WATCH

Fawry, Contact Financial, GB Corp + Rameda report 3Q 2023 earnings.

ALSO ON OUR RADAR

EgyptAir buys 10 passenger jets in multi-bn USD Airbus order.

WHAT WE’RE TRACKING TODAY

Egypt is looking at India’s capital markets after successful debt raises in China and Japan.

WHAT WE’RE TRACKING TODAY

Market calls time on Fed rate hikes after lower-than-expected US inflation print.

HARDHAT

The full lowdown on our infrastructure preparations ahead of this year’s rainy season.

WHAT WE’RE TRACKING TODAY

Egypt looks to Indian capital markets to diversify its financing

Good morning, ladies and gentlemen. We have plenty of news for you this morning, but it’s a light read as we plunge into the final days of earnings season, where blue chips are again turning in strong results despite macro headwinds.

A QUICK PROGRAMMING ANNOUNCEMENT- We’re fine-tuning our publication schedule. Starting today, we’re going to be dispatching Enterprise Climate and Enterprise Logistics, our two MENA-focused verticals, a few hours later. Climate will hit your inboxes at 9:00am CLT, and Logistics at 9:15am CLT. (Add one hour for our readers in Saudi and two for our readers in the UAE.)

Why the change? In our ideal world, folks wake up and start their days with EnterpriseAM — and then read an industry vertical if it is meaningful to their work lives or simply interests them. Our new dispatch times for Climate and Logistics are meant to put them in the inboxes of readers who are arriving at their desks.

Not a reader of Enterprise Logistics or Enterprise Climate? You can subscribe here and here.

Want to stop getting Enterprise Logistics or Enterprise Climate? All you need to do is hit the unsubscribe link at the bottom of each email. You can also stop subscribing to EnterpriseAM if you like, but we would cry.

PSA #1- Are you a car nerd? You’ll want to check out this weekend’s unveiling of Mercedes-Benz’s EV lineup by our friends at Abou Ghaly Motors. The firm is introducing a full range of sedans and SUVs, including the EQA, EQB, EQE and EQS lines, at prices ranging from EUR 65.9k through EUR 166.1k. The Friday event, from 2-7pm CLT, is at Abou Ghaly’s Mercedes dealership on the Ismailia Desert Road. Enterprise readers are welcome to attend.

PSA #2-Your guilty pleasure just got more expensive: Cigarette distributors JTI-Nakhla Tobacco and Al Mansour International Distribution Company hiked the price of smokes by up to 23%. A pack of Davidoff has jumped 15% to EGP 74 from EGP 64, while the Evolve brand will now set you back EGP 59, increasing 23% from EGP 48. Budget-friendly packs of Manchester and Time increased only EGP 3 to EGP 38-37 and packs of Target and Select can be picked up for EGP 29, up EGP 5.

They’re not the only ones: Eastern Company and Philip Morris also increased their prices in the last two weeks after a new cigarette tax hike was signed into law that also gave companies more leeway to raise prices.

KUDOS on this Wednesday morning to our friends at CIRA, who are now an MIT case study. MIT’s Legatum Center for Development and Entrepreneurship launched the education company as a case study this week during a visit by a group of global Legatum student fellows. CIRA chief Mohamed El Kalla (LinkedIn) presented the case, part of an MIT drive to highlight cases of successful entrepreneurs in Africa and Southeast Asia.

WATCH THIS SPACE-

#1- INR-denominated bond issuance on the horizon? Egypt is looking to raise capital from India’s capital markets to diversify its sources of funding, Finance Minister Mohamed Maait said during a meeting with the Indian ambassador to Cairo.

Remember: Higher global interest rates and a prolonged currency crisis have all but shut Egypt out of Western capital markets, prompting Egypt to turn to more new sources of finance such as the bond issuances in China and Japan.

Local currency trade with India may also be in the works: Maait also discussed local currency-denominated bilateral trade with the Indian ambassador, the Finance Ministry said.

#2- An e-platform for golden license applications will go live “within days”: A digital platform for those looking for a fast-track golden investor license will be available within the next few days, GAFI chairman Hossam Heiba said yesterday. The government has expanded the use of the single-approval licenses in recent months in a bid to attract fresh investment.

** Check out our explainer on golden licenses if you want to go deeper.

#3- Export optimism: Egyptian exports to African countries are projected to climb 10% to USD 5.5 bn in 2023, Federation of Egyptian Industries official Sherif El Gabaly said yesterday. Trade between Egypt and African countries hit USD 5.82 bn in 8M 2023, inching up 1.2% from the same period the year before.

HAPPENING TODAY-

UK Foreign Office minister is in Egypt to discuss aid for Gaza: The UK’s Minister for Development and Africa, Andrew Mitchell, flew in to Cairo last night to discuss the coordination of humanitarian air in Gaza, the Independent reported. The UK government is considering “air and maritime options” through its bases in Cyprus, the minister said.

Attention Dice shareholders: Today is the deadline to sell your shares in the ongoing mandatory tender offer launched by the company’s founders last month. If you’re not already tempted, the price was upped last week to EGP 0.80 a share, up 23% from the EGP 0.65 offered previously.’

It’s the final day of the Intra-African Trade Fairat the Egypt International Exhibition Center complex today. The Egypt VC Summit also concludes today.

THE BIG STORY ABROAD-

The big business story of the day is over in San Francisco, where Joe Biden and Xi Jinping are going to try to patch things up — or at least de-escalate tensions when the two meet later this morning. It’s Xi’s first visit to the US in six years. The two will meet first thing today before heading to the Asia-Pacific Economic Cooperation forum.

One thing Biden won’t be doing: Announcing a big trade agreement as part of a bid to counter China’s economic influence in Asia. He’s reportedly shelving the initiative on the back of objections from congressional Democrats, the Financial Times reports.

MARKET WATCH-

Higher interest rates are likely off the table as US inflation cools: US inflation declined for the first time since August to 3.2%, reassuring investors that the Fed’s aggressive tightening cycle — which has seen it hike interest rates to their highest levels in 22 years — is at an end, the Financial Times reported. “The Federal Reserve has got to be pretty happy with this and unsurprisingly it has reinforced market expectations that the policy rate has peaked,” chief int’l economist at ING Economics James Knightley told the salmon-colored paper.

Stocks spiked in response: The Nasdaq was up 2.4% at the closing bell, while the S&P 500 benchmark index rose 1.9% as a result of encouraging inflation figures earlier in the day.

*** 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: The lowdown on our infrastructure preparations ahead of this year’s rainy season.

Tags:

Bonds debt Egypt-India relations India WHAT WE’RE TRACKING TODAY

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Energy

Israeli gas flows to Egypt could return pre-war levels by next week

First a trickle, then a flood: Gas imports from Israel are set to increase to 650 mn cubic feet per day by Thursday and reach pre-war levels of 800 mn cubic feet per day towards the beginning of next week, Bloomberg reports, citing an industry insider it says is familiar with the matter. The projection comes after gas flows to Egypt rose 60% to 250-400 mn cubic feet per day after the reopening of the Chevron-run Tamar gas field on Monday. The field is ramping up production and is expected to reach full capacity “within a few days,” according to unnamed industry sources quoted by Reuters.

Remember: The Israeli government shut down operations at Tamar last month on the back of what it said were security concerns as the IDF began its war on Gaza — and as Israel ordered that gas production from other sites prioritize the domestic market. That slashed gas exports to just 100 mn cubic feet per day, according to an industry insider we spoke to.

The East Mediterranean Gas pipeline that sends gas from Israel to Egypt’s Arish in North Sinai resumed exports yesterday, Chevron said in a statement cited by Reuters. The pipeline had been closed for a month after Chevron suspended exports through it at the start of the war.

Eni is still banging the LNG export drum: Italian energy giant Eni thinks it will restart exports of LNG from Egypt “by December, possibly January,” according to comments by ENI’s gas and LNG head Cristian Signoretto on Tuesday quoted by Reuters. Falling consumption in Egypt as we leave hot summer weather in our rearview means Eni will “be able to resume LNG exports even if Tamar does not return to full production.”

But Bloomberg is still pessimistic: LNG exports are expected to be 40% down on forecasts made only a month earlier according to Bloomberg, citing its own BloombergNEF projections.

Tags:

Chevron East Mediterranean Gas energy Eni I oil and gas Israel Israel-Palestine conflict Leviathan Tamar

Real estate

Egyptian real estate giant Palm Hills to break ground on EGP 65 bn development in mid-2024

EGX-listed real estate player Palm Hills Development (PHD) will break ground on a new EGP 65 bn residential and commercial complex in Sixth of October City in June 2024, PHD head Yasseen Mansour told Asharq Business. Mansour did not provide further details about the project, the name of which has not yet been made public.

The company wants to snap up a loan for its Badya project:PHD has started talks to line up financing worth EGP 5.5 bn from a Banque Misr-led syndicate, Mansour added, with a view to onboarding the cash within three months. The funding will be earmarked for PHD’s 50k unit Badya project in the Sixth of October.

Not news we wanted to hear: Real estate prices will rise by no less than 40% in 2024, Asharq Business quotes Mansour as having said.

Tags:

Banque Misr construction debt investment watch Palm Hills Developments real estate

INVESTMENT WATCH

Qatar expected to invest USD 1.5 bn into Egyptian industrial projects in 2024

Big Qatari investments incoming? Qatar will invest USD 1.5 bn into industrial projects in Egypt in 2024, a senior figure at the Egyptian Trade Ministry, Yahya Al Wathiq Billah, said in an interview with Asharq Business. The official did not specify any projects or companies that the funds are earmarked for or when we could expect to hear more details.

We’ve been expecting Qatar to invest some USD 5 bn since last year: Qatar pledged back in March 2022 to deploy some USD 5 bn here “in the coming period,” but has yet to commit to significant investments since then.

What’s behind the delay? The Qatar Investment Authority (QIA) has been seeking majority stakes in a number of potential acquisitions, while the Sovereign Fund of Egypt has had a preference for the sale of minority stakes. And Qatari firms, like other prospective foreign investors, have been given pause by the overhang presented by the discrepancy between the formal and parallel market prices of the USD. Nobody wants to make an investment on day one and then have to mark it down a few days later because we float the EGP.

Still, Qatar has not shied away from Egypt: Qatari dairy producer Baladna increased its stake in EGX-listed Juhayna to 15% over the summer, while Qatar Energy purchased a 40% working interest in an Exxon–owned exploration block in the Mediterranean last year. Trade volumes between Qatar and Egypt rose 47% in 2022, according Billah.

DATA POINT: Qatar has invested over USD 5.5 bn in Egypt to date, with significant investments in our finance, real estate, and energy sectors, Qatari Trade Minister Ali bin Ahmed Al Kuwari told Asharq Business yesterday at the Egyptian-Qatari Economic Investment Forum.

QATARI PRIVATE SECTOR LOOKING-

Al Mana Group wants in on our automotive industry: Qatar’s Al-Mana Group plans to invest more than USD 60 min in Egypt in 2024, most of which will be used in the funding of a new automotive assembly plant, Asharq Business quotes Chairman and CEO Saud Al Mana as saying on the sidelines of the Egyptian-Qatari Investment Forum on Tuesday. While the Qatari group has yet to decide on the automotive brand it intends to set up the plant with, Al-Mana said it will likely be a Chinese brand for the local market and be assembled in the Suez Canal Economic Zone (SCZone), Asharq quoted him as saying.

More Qatari-Egyptian partnerships in the works: Egyptian and Qatari companies also signed a number of unspecified MoUs at the forum, according to a Trade Ministry statement.

Tags:

Al Mana Group automotive investment watch Qatar SCZone

Startup watch

Egyptian edtech startup Akhdar lands investment from Saudi accelerator

Value Makers Studio’s Egypt investment spree continues: Homegrown Arabic-language audiobook summary and education platform Akhdar has raised a six-figure USD investment from Saudi accelerator Value Makers Studio (VMS), according to a statement (pdf) from the company.

What does Akhdar do? It’s an Arabic language platform that sums up books and podcasts into short, easy-to-understand audio summaries and explainers. Their application has been installed over 2 mn times and boasts 1.5 mn users from 174 countries. The firm began life in 2016 as a YouTube channel before creating its own platform in 2020.

Where is the money going? Akhdar will use the fresh financing to “support [Akhdar] expansion plans into the GCC region, with a particular emphasis on Saudi Arabia,” said Akhdar co-founder and CEO Mohamed Osama.

VMS is serious about the local edtech scene: Akhdar is one of three local education startups to have recently received an equity investment from VMS. The VC also invested in OBM Education and Awfar at a recent startup conference in Egypt.

Tags:

Akhdar edtech Saudi Arabia Startup watch startups Value Makers Studio venture capital

WAR WATCH

Israel begins raid of Al Shifa + Israeli officials reframe Gaza displacement plan

Israeli forces began storming Al Shifa Hospital in Gaza City in the early hours of this morning, three days after starting a siege of the complex. A witness inside the hospital told the BBC’s correspondent in Gaza that soldiers entered the building and “fired a smoke bomb that caused people to suffocate,” while a Palestinian journalist at Wafa reported “intense shelling and gunfire” in the hospital’s vicinity. In a post on X, the IDF said it is carrying out a “precise and targeted operation” against Hamas in a specific area of the hospital and that it has no intention of harming civilians.

Israel has accused Hamas of having a headquarters underneath the hospital, a claim that both the armed group and the hospital’s management have vigorously denied. Thousands of displaced people and hundreds of patients and medical workers remain inside the complex, and have reportedly been prevented from leaving by the surrounding Israeli military.

The Biden administration is backing Israel’s claims, but is calling for restraint. Go read White House spokesperson John Kirby’s blather if you want.

PROJECT NAKBA 2.0

Ethnic cleansing 101: Israeli officials are once again calling for international support of its drive to turf hundreds of thousands of Palestinians from their land in Gaza, but this time it’s being dressed up in the language of humanitarianism.

An appeal to the liberals: Former Israeli ambassador to the UN Danny Danon and Mossad insider Ram Ben-Barak make their case for ethnic cleansing-lite in the opinion section of the Wall Street Journal. They’re imploring Western governments to take in Palestinians “who have expressed a desire to relocate.”

Smotrich cos-plays Mother Teresa: The piece got the thumbs-up from Netanyahu’s far-right finance minister, Bezalel Smotrich, who called for a “humanitarian” solution in a social media post yesterday. Palestinians should be allowed to “voluntarily immigrate” from their land, he said.

A rebuke from Egypt: In a statement, Foreign Minister Sameh Shoukry “categorically and utterly rejected” Smotrich’s call to displace Gaza’s civilians and accused the Israeli government of deliberately starving them to force them off their land.

Remember: The Israeli government has drawn up a blueprint for the forcible displacement of Gaza’s 2.3 mn residents into Egypt, and has lobbied foreign governments to back the plan. President Abdel Fattah El Sisi and key members of his government have forcefully rejected the idea, with Prime Minister Moustafa Madbouly last month threatening a military response. Israel has so far displaced 1.6 mn civilians, more than two-thirds of Gaza’s entire population.

Tags:

DIPLOMACY Israel Israel-Palestine conflict Middle East politics Palestine Sameh Shoukry war watch

EARNINGS WATCH

Fawry, Contact Financial, GB Corp + Rameda report 3Q 2023 results

FAWRY REPORTS RECORD REVENUES-

Another strong quarter for Fawry:EGX-listed e-payments giant Fawry more than doubled its adjusted net income to EGP 222.1 mn in 3Q 2023 as the company enjoyed strong growth across all of its segments, according to the company’s earnings release (pdf). Revenues rose 42% y-o-y to a record EGP 873.2 mn, driven primarily by the company’s banking segment, which saw revenues rise more than two-thirds to EGP 329.3 mn.

Growth in payments, microlending + supply chain solutions: Its payments segment generated EGP 349.4 mn in revenues, up 19% y-o-y. Revenues from its supply chain business surged more than 90% to EGP 65.4 mn while microlending brought in EGP 92.7 mn, up 39% y-o-y.

More transactions, more value: Fawry’s transaction throughput surged 70% to EGP 243.1 bn during the first nine months of the year. Transaction volumes climbed to almost 1.2 bn, up more than 20% from 9M 2022.

Another record year? “I am confident that we will close a record-breaking year in terms of top-line performance and profitability margins,” said CEO Ashraf Sabry.

CONTACT FINANCIAL INCOME UP-

Contact Financial has had a strong 2023 so far: Non-banking financial services (NBFS) pioneer Contact Financial saw its normalized net income rise 34% y-o-y to EGP 542 mn in the first nine months of 2023 on the back of growth in its financing and ins. divisions, the company said in its earnings release (pdf ) yesterday. Income was up 58% to EGP 158 mn in 3Q 2023.

Auto loans, consumer finance drive lending growth: Net income in Contact’s financing division climbed 33% y-o-y in 9M 2023, fuelled by strong growth in the company’s lending portfolio. New financing rose 45% to EGP 12.1 bn during the period, led by auto loans and consumer financing. New financing in auto loans almost doubled in the year to date as supply of vehicles has improved somewhat and car prices rose. New financing in the company’s consumer finance segment rose 59% y-o-y backed by Contact’s expanding merchant network, product diversification, and market reach.

Ins. segments continued to expand: Contact reported a 27% y-o-y increase in earnings from its ins. Division in the January-September period, driven by high demand for Sarwa Life’s medical ins. product and SME life and health ins. offerings.

A RECORD QUARTER FOR GB CORP-

GB Corp earnings hit all-time high: GB Corp’s net income rose 20% y-o-y to reach a record EGP 662.4 mn in 3Q 2023, driven by strong consumer demand after a prolonged period of supply shortages, according to its latest earnings release (pdf). The company’s top line climbed to almost EGP 8.8 bn during the three-month period, up 22% on the same period last year.

Market conditions well-handled: The company’s automotive assembly and distribution unitGB Auto, which contributed 85% of the company’s revenues, reported a 48% y-o-y in its top line despite thorny market conditions including import restrictions and limited FX availability. Revenues from passenger cars rose 66% y-o-y to EGP 3.5 bn as the group was able to price up, offsetting a 14% slump in sales volumes. Meanwhile, the group’s NBFS arm GB Capital reported 14% y-o-y growth in revenues to EGP 1.2 bn on the back of portfolio growth at its leasing and consumer finance and arms.

What they said: “Despite the headwinds in the automotive market, GB Auto was able to deliver positive results during the period on the back of enhanced performance across its lines of businesses,” CEO Nader Ghabbour said. “We were able to offset the slowdown in volumes [of the passenger car] with enhanced pricing and an improved product mix, leading to stronger margins and increased profitability.”

RAMEDA INCOME RISES IN 3Q-

Rameda earnings up on higher prices, export growth: Rameda Pharma’s net income climbed 8% y-o-y to EGP 78.0 mn in 3Q 2023 on the back of higher overseas demand and price hikes, according to the company’s earnings release (pdf). The pharma manufacturer reported 43% growth in revenues to EGP 545.7 mn for the three-month period, supported by a 17% increase in sales volumes. Net income dipped 1% to EGP 197.0 mn in the first nine months of the year.

Repricing offsets fall in local sales volumes: Revenue from local sales rose 29% to almost EGP 400 mn during 3Q after the company hiked prices by an average 32% y-o-y. Higher prices helped to offset a 5% decline in sales volumes. Local sales accounted for almost three-quarters of the company’s revenue.

Exports rise: Rameda’s export revenues tripled to EGP 61.1 mn during the quarter on the back of a strong rise in demand in its key export market, Iraq. Overseas sales volumes more than doubled to 2.3 mn. Iraq accounted for more than 90% of the company’s overseas sales.

Cautious optimism: “Despite the turbulent market conditions across Egypt’s landscape, I am left cautiously optimistic of the road ahead,” said CEO Amr Morsy. “Our results this past quarter have witnessed significant improvement, with the group delivering strong revenue growth as well as healthy margins, and stands testament to the strength of the groups operations across the pharma space.”

Tags:

automotive Contact Financial earnings watch Fawry financial services Fintech GB Corp non-banking financial services pharma Rameda Pharma

LAST NIGHT’S TALK SHOWS

Satterfield is on the airwaves again, but nobody is buying

It was a slightly calmer night on the airwaves as the nation’s talking heads cooled it with the economy talk and shifted their attention back to the war in Gaza.

Satterfield is becoming a regular on the airwaves: The Biden administration is trying hard to get its message out to the Egyptian public, with Middle East humanitarian envoy David Satterfield appearing on Yahduth Fi Masr for his second televised interview this week.

In a nutshell:

War: good, but could be better;
Aid: not enough;
Peace: not right now.

Watch, if you can stomach it. Runtime: 3:37 | 3:02 | 3:19 | 3:18 | 3:42).

Talking heads go off on the Israeli government: Yesterday’s comments from Israel’s far-right finance minister about deporting Palestinians drew the ire of the talking heads. “This is a deranged government. Little kids still in school have better awareness than this,” Masa’a DMC’s Osama Kamal said (watch, runtime: 4:18). “This is talk of ethnic cleansing … this is completely rejected by Palestenians and Arabs,” El Hadidi said (watch, runtime: 2:09).

ALSO- Al Hayah Al Youm hosted Amira Saber, campaign spokesperson for presidential candidate Farid Zahran (watch, runtime: 24:05), for a conversation that centered around the war on Gaza and Zahran’s campaign.

Tags:

Egypt-US relations Israel-Palestine conflict LAST NIGHT’S TALK SHOWS Middle East politics

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EGYPT IN THE NEWS

This is how the pharaohs used to scare off the snakes

The latest from Gaza is still holding the attention of the international press this morning, which we detail in full in the news well, above.

Also making headlines:

Ancient burial chambers underneath Saqqara shed light on Pharaonic anti-snake tech: A recent archaeological discovery of a 2.5k year-old burial room beneath Saqqara gets attention in Smithsonian for its ‘magical spells’ that prevented snake bites. (Smithsonian)
Shubeik Lubeik gets props from Washington Post: Deena Mohamed’s well-loved Shubeik Lubeik was named among the Washington Post’s Top 10 Graphic Design Novels of 2023. (Washington Post)
Another take on Nasser’s legacy: The NYT gives some ink to “We Are Your Soldiers,” a book by journalist Alex Rowell that delves into the lesser-explored regional interventions of Gamal Abdel Nasser in neighboring Arab states. (New York Times)

Tags:

Ancient Egypt culture

ALSO ON OUR RADAR

EgyptAir places big Airbus order. PLUS: News from SODIC, Afreximbank, Hayat, Cleopatra Group

AVIATION-

EgyptAir has placed another big order for new aircraft. National flag carrier EgyptAir has placed an order for 10 new A350-900 jets from Airbus, the European planemaker announced in a statement. The value of the contract was not disclosed, but the manufacturer’s standard price list puts the figure at USD 3.2 bn for all 10 planes, according to calculations by AFP.

When will Egypt get the planes? The aircraft are scheduled to be delivered between 2025 and 2027, Egypt Air’s CEO Yehia Zakaria was quoted by Sky News Arabia as saying in a presser. He also added that EgyptAir will finance the contract.

Remember: EgyptAir just placed an order to lease 18 new aircraft from Boeing earlier this week American outfit Air Lease Corp to be delivered starting from early 2025 and 2026. You can thank the Dubai Airshow for all of the planes in your news feed of late.

DEBT-

SODIC is taking out an EGP 1.2 bn facility: Our friends at SODIC inked a seven-year, EGP 1.2 bn revolving credit facility agreement with CIB, the upmarket real estate developer said in an EGX disclosure (pdf) yesterday. The developer will use the funds to finance the ongoing operations of various projects. The facility will be backed by a portfolio of SODIC’s receivables from future installments for units sold.

DEVELOPMENT FINANCE-

Egypt joins Afreximbank’s USD 2 bn food security initiative: Egypt inked a framework agreement to join food security initiative that will see Afreximbank commit USD 2 bn to help improve production and make it easier for African countries to trade food. The governments of Chad, Malawi, and Zimbabwe also inked the agreement during this week’s Intra-African Trade Fair in Cairo, according to a press release out yesterday.

It’s the second big Afreximbank announcement this week: The bank has agreed to extend USD 3 bn worth of credit to Egyptian companies — including Hassan Allam Holding, Elsewedy Electric, and Arab Contractors — to support infrastructure they’re running across the continent.

MANUFACTURING-

Turkish hygiene andsanitary products company Hayat boosted its Egyptian subsidiary’s capital by USD 20 mn to USD 200 mn to finance the company’s expansion plan, Hayat Egypt’s general manager Senol Keserlioglu told Al Mal. The parent company is planning to increase its investments in Egypt to USD 650 mn from USD 530 mn by the end of 2025 and has a new factory set to open in late 2024 and another in 2025, Keserlioglu added.

INVESTMENT-

Cleopatra Group is investing big in its tourism and ceramics businesses: Cleopatra Group will invest some EGP 120 bn (USD 3.9 bn) into its tourism, real estate, and ceramics subsidiaries, founder and board chairman Mohamed Abou El Enein told Asharq Business in an interview. The company is earmarking some EGP 100 bn as it looks to build new hotels on the North Coast and increase the capacity of its existing hotels in Sharm El Sheikh and Hurghada. The balance will go into expanding production at its ceramics plants, Abou El Einein said.

Tags:

AfreximBank agriculture ALSO ON OUR RADAR aviation banking CIB Cleopatra debt watch development finance EgyptAir Hayat hospitality investment watch Manufacturing real estate SODIC

PLANET FINANCE

IEA ups oil demand forecast for next year on expectations for lower prices

Oil supply could see a surplus next year -IEA: The International Energy Agency (IEA) is anticipating a surplus in oil markets at the start of 2024, although it marginally raised its oil demand growth forecasts, according to its latest monthly report. The IEA now expects demand to reach 930k barrels per day next year, up from its previous 880k forecast on the back of expected interest rate cuts and the recent decline in oil prices

IEA vs. OPEC: IEA’s 2024 demand forecast sits much lower than OPEC’s estimate, which has put demand growth for next year at 2.25 mn bpd. The two organizations have voiced different opinions on long-term oil demand outlook. Reuters also has the story.

EGX30	23,894	-0.1% (YTD: +64.0%)
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	10,857	+0.6% (YTD: +3.6%)
ADX	9,530	-0.1% (YTD: -6.7%)
DFM	3,973	-0.2% (YTD: +19.1%)
S&P 500	4,496	+1.9% (YTD: +17.1%)
FTSE 100	7,440	+0.2% (YTD: -0.2%)
Euro Stoxx 50	4,292	+1.4% (YTD: +13.1%)
Brent crude	USD 82.47	-0.1%
Natural gas (Nymex)	USD 3.11	-2.9%
Gold	USD 1,966.50	+0.8%
BTC	USD 35,599.71	-2.5% (YTD: +113.5%)

THE CLOSING BELL-

The EGX30 fell 0.1% at yesterday’s close on turnover of EGP 4.0 bn (54.5% above the 90-day average). Local investors were net sellers. The index is up 64.0% YTD.

In the green: Ezz Steel (+5.8%), TMG Holding (+5.0%) and AMOC (+3.1%).

In the red: Credit Agricole (-5.3%), Telecom Egypt (-3.9%) and E-Finance (-3.8%).

Major Asian benchmarks are very handily in the green this morning as investors cheer what CNBC is calling “soft US inflation data,” potentially signaling the Federal Reserve could back off rate hikes. Equities futures suggest shares in Europe, Wall Street and Bay Street will all open in the green later today.

Tags:

Financial Markets International Energy Agency oil and gas Planet Finance

HARDHAT

The full lowdown on our infrastructure preparations ahead of this year’s rainy season

Is our infrastructure prepared for rainy season this year? Rainy season in Egypt has grown to become a looming source of anxiety around this time of year. The effects of 2020’s infamous Dragon Storm, which reportedly caused the deaths of 21 people, widespread power outages, and over EGP 1.2 bn in infrastructure damage are painful reminders of our lacking drainage infrastructure, which up until last year, had still posed an issue for most governorates across the country.

We spoke with government officials and industry experts to get more information on our preparations ahead of winter season, and to see whether our infrastructure is ready to handle future heavy bouts of rainfall and flooding as climate change makes them a more regular occurrence.

The good news:The government says that we’re ready for this year’s winter season. An official with firsthand knowledge of the matter who spoke to Enterprise says that early flood forecasting systems, nationwide coordination across governorates, and cost monitoring mechanisms, along with new infrastructure projects, have collectively put us in good shape for the season.

In other good(ish) news: We may be getting less rain than usual this year, especially in Cairo, Youm7 quotes the former head of the Meteorological Authority, Ahmed Abdel Aal as saying. Preliminary forecasts for the season signal a warmer and drier winter season than usual, he said.

We’re still spending big on preparations: The government spent EGP 6.7 bn to establish 1.6k new sewer links in Upper Egypt, North and South Sinai, the Red Sea, and Matrouh, the Water Resources and Irrigation Ministry said in a statement in October. The new investments aim at linking our sewer network to Egypt’s dry river beds, which would then flow into the Red Sea or into freshwater lakes for use in agriculture and the New Delta project. The new projects have a total storage capacity of 350 mn cubic meters, and will go a long way in protecting us against flooding, our source tells us.

Spending has gone up this year to match rising prices, our source said. The projects themselves had been in the works since 2021 – however, the price of developing and reinforcing our sewer network has gone up significantly since the plans were announced.

How we’ve prepared: The ministry is conducting maintenance checks for 117 flood spillways in particularly vulnerable areas in Upper Egypt, the statement said. The ministry is also reducing water levels in canals and drains in areas where the forecast indicates heavy rainfall to allow the drainage system to absorb additional amounts of water, and has prepared lifting stations and emergency units to sort out any water congestion, the statement said.

There’s moreto come in 2024: The government also has plans to spend another EGP 4.6 bn on 69 more sewer works in Upper Egypt until 2024, and an additional EGP 5.6 bn on 600 new sewer links in the Red Sea, Sinai, and Matrouh, the statement said.

In the bigger picture, the goal is to turn our drainage problems into a water scarcity solution: The government has invested bns of EGP in upgrading our drainage system, with projects including new dams and upgrades in our sewage network to protect against the dangers of floods while storing the water for future irrigation use. The government is focusing on finding ways to store the yearly influx of water to then use in its EGP 300 bn New Delta reclamation project, our source tells us.

Meanwhile, Alexandria is coming up with new solutions for its annual rainfall woes: Alexandria’s challenges with rainwater are a result of its narrow streets and congested residential areas, which have led Alexandria University and the Holding Company for Drinking Water and Wastewater to work on a rainwater management project since last year, a consultant for the rainwater management project in Alexandria, Waleed Abdel Azeem, told local media in the summer (watch, runtime 6:09).

They’re progressing well: They have already identified 150 hotspots across the city that are especially prone to accumulations of rainfall, and have already cleared hotspots in El Shatby, The Bibliotheca Alexandrina, Sporting in Cleopatra, and Loran in Alexandria, according to Abd El Azeem. 12 of the identified hotspots have been dealt with, and the amount of water removed has had a positive impact on 10 other points indirectly, he said. A portion of the water will be moved to El Matar Lake, and the rest will be used in the New Delta project and for irrigation inside Alexandria.

What’s next? They are currently focusing on other more difficult and congested areas in Alexandria, like Smouha and Mohamed Naguib, Abdel Azeem said.

And there’s more planned: The government has been planning to split Alexandria’s rain drainage system from the city’s main sewage network, increasing the capacity for containing rainwater in the event of heavy rainfall on the city.

Your top infrastructure stories for the week:

Wind: ACWA Power and Hassan Allam expect to break ground on their planned USD 1.5 bn, 1.1 GW wind farm in the Gulf of Suez early next year.
Logistic zone: Emirati state-owned port operator DP World will break ground on its USD 80 mn logistics zone at Ain Sokhna port this month.
Dry Port: Industrial Development Group (IDG) will submit financial and technical offers for the new Beni Suef dry port it is developing alongside Alexandria-based logistics company Star Shine Shipping & Logistics (SSSC) during 1Q 2024.

Tags:

agriculture Hardhat infrastructure irrigation water water security

CALENDAR

NOVEMBER

9-15 November (Thursday-Wednesday): Intra-African Trade Fair, Cairo.

14-15 November (Tuesday-Wednesday): Destination Africa, Royal Maxim Palace Kempinski Hotel.

14-15 November (Tuesday-Wednesday): Egypt VC Summit, Conrad Hotel.

15 November (Wednesday): Deadline for MTO to buyback Dice Sports and Casual Wear’s 46.9% Stake.

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

19 November (Sunday): House reconvenes.

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.

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

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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