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Tuesday, 5 Dec 2023

What We're Tracking Today
Energy
Investment Watch
Cop Watch
War Watch
Moves
Last Night’s Talk Shows
Egypt In The News
Planet Finance
Going Green
Calendar

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Today at a glance

1

DEBT WATCH

Egypt plans USD 500 mn India bond issuance in 2024.
2

Energy

The state wants an even bigger share of the country’s nascent green fuel industry.
3

Investment Watch

Lots of news from Elsewedy Electric.
4

COP WATCH

News worth noting from day 5 of COP.
5

WAR WATCH

Gazans have nowhere to go.
6

Moves

The SFE has a new general assembly.
7

Also on our Radar

Al Baraka lines up shariah-compliant financing from IFC.
8

Going Green

A closer look at our planned network of green food centers.

Tuesday, 5 Dec 2023

What We're Tracking Today
Energy
Investment Watch
Cop Watch
War Watch
Moves
Last Night’s Talk Shows
Egypt In The News
Planet Finance
Going Green
Calendar
1

What We're Tracking Today

S&P Global to publish Egypt’s PMI figures for November today

Good morning, folks: We have a nice brisk issue for you this morning on one of the final hump days of 2023.

EGX WATCH- The EGX30 rebounds after four sessions in the red: The benchmark EGX30 rose 2.8% in trading yesterday to close at around 25.3k, snapping a four-day streak of declines that started last Tuesday.

CIB shares led the index down: EGX30 heavyweight CIB saw its shares fall over 9%, from EGP 83.50 last Monday to EGP 75.60 on Sunday, before rebounding during yesterday’s trading to EGP 77.10.

You can thank the gap between the official and parallel market exchange rates for the recovery. Expect the EGX30 to post further gains as domestic investors look to hedge against currency risk, Mubasher Capital Vice Chairman Ehab Rashad told Enterprise. The more the gap narrows, he added, the more attractive we’ll become to foreign portfolio investors. Rashad also pointed to recent positive signals from the IMF regarding our USD 3 bn loan program as boosting sentiment among traders.

** DID THIS MORNING’S EMAIL WIND UP IN YOUR TABS? Please drag us to your inbox — it goes a long way toward making sure Enterprise makes it into everyone’s email inbox.

HAPPENING TODAY-

#1- It’s PMI day. S&P Global will publish Egypt’s PMI figures for November at around 7:15am CLT this morning. Saudi and Qatar gauges are also due out today.

#2- Cypriot president in Egypt: Cypriot President Nikos Christodoulides is visiting Egypt and Jordan today to discuss an initiative to open a maritime corridor to dispatch humanitarian aid to Gaza, according to a presidential statement.

Remember: Christodoulides has been pushing the humanitarian corridor proposal for some time, but putting it into action is pending a ceasefire between Israel and Hamas. Reuters has the story.

#3- It’s day six of COP28 and we’ll be on the lookout for discussions on energy and industry + the Just Transition. Discussions will focus on how to achieve rapid decarbonization and a just energy transition across the wider spectrum of energy and industrial value chains. Key topics will include boosting the deployment of renewable energy, unlocking greater energy efficiency, innovation and action for hard-to-abate sectors including steel and aluminum, and the decarbonization of oil and gas supplies including methane abatement and carbon management tech.

#4- It’s the second day of the Egypt Defence Expo (EDEX), where some 35k defense and security professionals are attending the event at the Egypt International Exhibition Center in Cairo. The event runs through Thursday.

#5- Until next time WYF: The 2023 World Youth Forum wraps today.

HAPPENING THIS WEEK-

FX reserves: The central bank should be out with November’s foreign reserves figures this week.

HAPPENING NEXT WEEK-

#1- Election 2023: Voters will head to the polls on 10-12 December to cast their ballots in the presidential election. Voting for expats wrapped yesterday. First-round results are due on 18 December and a runoff, if necessary, will take place in early January.

#2- Inflation figures for November are due out on Sunday, 10 December.

WATCH THIS SPACE-

#1- MORE OF THIS, PLEASE: Beltone wants to set up an SME lender: Beltone Financial Holding has applied to the Financial Regulatory Authority for initial approval to set up an SME-focused lender, it said in an EGX disclosure (pdf) yesterday. The firm would be set up with a EGP 250 mn in capital. SMEs remain locked out of the formal financial system. Few traditional lenders are truly interested in onboarding small businesses for payroll accounts, let alone in lending to them.

#2- AfDB is backing green financing in Egypt:The African Development Bank (AfDB) will bring its African Green Bank Initiative to Egypt this month, “empowering local banks with the technical capacity needed to attract climate finance from international and domestic investors,” it said in a press release. The bank will help set up green investment facilities in local financial institutions.

Part of a wider plan: The bank is expanding its initiative to Egypt, Benin, Ivory Coast, and Morocco after its success in Rwanda. It was launched last year during COP27 in an attempt to tackle the lack of climate finance on the continent.

#3- More green ammonia agreements incoming? The Sovereign Fund of Egypt will announce new partnerships on the green ammonia front during COP28, “be it through already existing green plants or greening existing ammonia plants,” CEO Ayman Soliman told CNBC Arabia. The fund will also ink framework agreements focused on green energy with over five consortiums in the coming period, he added, without providing details.

#4- Gov’t floods market with sugar to tame prices: The Supply Ministry has poured some 50k tons of sugar into the local market to be sold at EGP 27 per kilo in an effort to stabilize the market, where prices have soared to EGP 44 per kilo on the back of increasing demand, Youm7 wrote. The ministry has purchased around 150k tons of sugar from private-sector players at USD 750-780 per ton in an effort to help fill the supply gap that has pushed prices to EGP 50 per kilo last week and had the Supply Ministry consider introducing sugar price control .

THE BIG STORIES ABROAD-

For the first time in almost two months, the war in Gaza isn’t dominating the world’s attention: It’s a mixed picture on the global front pages, with Saudi oil policy, the war in Ukraine, mass shootings in America, and Wednesday’s Republican presidential debate all getting coverage.

The big business story: Spotify is laying off 17% of its workforce. (Reuters | Financial Times | Wall Street Journal)

HELP GAZA-

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

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

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

*** 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 took a look at how our planned network of green food centers is hoping to get food from farm to table with as minimal waste as possible.

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After China and Japan, Egypt could turn to the Indian capital markets next year:The Finance Ministry is looking to raise USD 500 mn in a bond issuance in India in 2024, Minister Mohamed Maait told CNBC Arabia in an interview yesterday (watch, runtime: 11:47). The bond would be denominated in INR, and mark the first time Egypt has issued debt in India.

ICYMI- Maait said last month that we are looking to raise FX from India’s capital markets todiversify our sources of funding during a meeting with the Indian ambassador to Cairo. This comes a few weeks after local-currency issuances in China and Japan, which raised the equivalent of USD 980 mn in CNY- and JPY-denominated debt.

Reports of a 2024 green bond issuance might no longer be rumors: The ministry hopes to raise anywhere between USD 500 mn and USD 1 bn via an issuance of “sustainability bonds” next year, Maait told the broadcaster on the sidelines of the COP28 summit in Dubai. With green bonds, blue bonds, social bonds, and others all falling under the rubric of “sustainable bonds,” the type of debt the minister was referring to wasn’t immediately clear. Chatter in the local press last month claimed that the government is considering a second green bond issuance in 2024.

A fresh sukuk issuance is still in the ministry’s plans: Maait reiterated plans for a second sukuk issuance next year though didn’t offer any details about the ministry’s thinking. A ministry source told us in October that it could take to market a USD 1 bn issuance in 1Q 2024. Egypt raised USD 1.5 bn in its maiden issuance in February this year.

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.

** We’ve got Panda and Samurai bonds, but what to call an INR-denominated bond? We’re open to suggestions.

T-BILL ROLLOVER-

The Central Bank of Egypt (CBE) has sold USD 990 mn of USD-denominated treasury bills at an average yield of 5.149% yield in an auction yesterday to refinance existing debt, according to CBE figures. The yield is 55 bps higher than the maturing bills sold in December 2022.

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2

Energy

Egyptian state-owned companies want to set up a second green fuel plant

One isn’t enough: A group of state-owned companies are looking to set up a second plant for producing green fuel in the Suez Canal Economic Zone (SCZone), Asharq Business reported yesterday, citing two sources it said have knowledge of the matter. The consortium, which includes Helwan Fertilizers, Abu Qir Fertilizers, and the National Bank of Egypt’s investment arm Al Ahly Capital Holding, are already working on a USD 2.6 bn green methanol plant in Ain Sokhna and now have their eyes on a green ammonia project, according to the news outlet.

What we know:

  • Asharq reports that the proposed project would require USD 1.2 bn of investment, 70% of which would be financed by bank loans and the remainder from the companies’ cash reserves.
  • Construction is expected to start by the end of 2025 and take three years to complete.
  • The project is being undertaken by Misr Methanol and Petrochemicals, a joint venture established by the three companies in 2021 to manufacture methanol, ammonia, and other petrochemicals.

What we don’t: No information about the capacity of the plant was provided. We were unable to reach any of the three companies for comment yesterday.

THAT BEING SAID- There is plenty of private-sector interest in Egypt as a potential regional green fuel hub:

  • Danish shipping giant Maersk intends to make the SCZone one of its global green fuel production hubs and earlier this year signed a framework agreement to set up a green methanol facility with a production capacity of 300k tons a year.
  • Norwegian renewables developer Scatec has signaled intent to establish greenammonia and methanol plants in the SCZone.
  • A number of multinational energy firmssigned framework agreements at last year’s COP27 last year for green ammonia plants which would have a combined annual production capacity of 4.6 mn tons, though there have been no updates on any of the six projects in the 12 months since.
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3

Investment Watch

Lots of news from Elsewedy Electric

Elsewedy kept busy at COP28, with its subsidiaries inking a number of agreements on the sidelines of the climate summit, handing out land plots across industrial complexes and agreeing to boost renewables in Indonesia.

#1- Fertilizer complex: UAE-based Sharkia Group fertilizers manufacturing arm Futurefert will set up a USD 50 mn fertilizer complex in Elsewedy’s Sokhna 360 industrial zone. Elsewedy Industrial Development and Futurefert inked the land allocation agreement yesterday, according to a statement (pdf) from the Suez Canal Economic Zone..

The details: During its first phase of operations, the complex will produce 300k tons of fertilizers a year.

ICYMI- Sokhna 360 is a 10-mn sqm industrial city in the Ain Sokhna industrial zone that offers residential and commercial units. It offers foreigners and international investors a slew of incentives, including full ownership, full control over exports and imports, and zero custom duties and sales tax.

#2- Jushi to expand glass factory: Chinese fiberglass manufacturer Jushi will invest USD 8 mn to expand its factory in China’s TEDA trade zone after it was awarded the necessary land plot of the expansion. Elsewedy Industrial Development awarded the glass manufacturer a 60k-sqm plot in its Industrial Sokhna project located in the TEDA zone, it said in a press release (pdf).

Expansion 2.0: Jushi earlier this year inaugurated a new USD 320 mn production line at its factory, pushing the factory’s production capacity to 350k tons a year. The company has so far invested USD 920 mn in its factory.

ALSO- Elsewedy will help Indonesia accelerate green transition:Elsewedy Electric Indonesia will help the Indonesian government link its new renewable energy generators with the national electricity grid, under an MoU inked with the country’s state electricity distributor PT PLN (Persero). Under the MoU, the two sides will work together to set up new renewable projects in the country, the company said in a press release (pdf).

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The Ritz is coming to west Cairo: Real estate developer Palm Hills and hotel brand Marriott will set up an EGP 4 bn luxury hotel in west Cairo — Ritz-Carlton Palm Hills — under an agreement inked between the two sides yesterday.

In detail: The hotel will be located in PHD’s Palm Hills October development, and include 150 rooms and 50 apartments as well as a number of amenities including restaurants, gyms, and swimming pools. It will create 45k jobs during the construction period and 600 when it’s up and running. The hotel should be fully operational in 2027.

Marriott in Egypt: The company has 17 hotels across the country, including a single Ritz-Carlton hotel located in downtown overlooking the Nile.

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4

COP WATCH

Day 5 at COP28

The few bits worth noting from day five of COP28. Among the sea of agreements and announcements made during the fifth day of the climate summit, a few caught our attention.

#1- EGAS among 50 oil companies to sign decarbonization charter: State-owned Egyptian Oil and Gas Holding Company (EGAS) and 49 other oil and gas companies including Exxonmobil, Adnoc, and Saudi Aramco signed the Oil and Gas Decarbonization Charter (OGDC) to accelerate the sector’s journey to net-zero by 2050.

The initiative from Saudi Arabia and the COP28 presidency-led initiative sets a net zero by 2030 emissions target for the oil and gas industry in parallel with an emphasis on ramping up investment in renewables and other low-carbon technologies. While the targets stipulated in the charter are non-binding, the signatories — which make up over 40% of the oil sector worldwide — will be required to submit their decarbonization plans by 2050, Bloomberg writes.

Big oil is trying to pull its weight: Six major oil players, including BP, Eni, and Total Energies, each pledged USD 25 mn for a new fund that will help oil companies across developing countries bring down their methane emissions, Bloomberg wrote. Chevron and Exxon Mobil didn’t join in.

#2- Apicorp gets a makeover: The Arab Petroleum Investments Corporation (Apicorp) has rebranded to The Arab Energy Fund and unveiled a new strategy that will see it invest up to USD 1 bn over the next five years to support energy transition in the MENA region, the fund said in a statement.

#3- Egypt to develop methane-reduction roadmap: Egypt wants to develop internalmethane regulations for its oil and gas sector by the end of next year, as part of a wider methane emissions reduction roadmap targeting the sector it will set up alongside the USTDA. Egypt has been part of the Global Methane Pledge — first proposed in 2021 to push down methane volumes by at least 30% by 2030 — for a year now.

Want to go deeper on everything happening over there? Enterprise Climate has got yourback.

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5

WAR WATCH

Attacks across Gaza leave Palestinians with nowhere to go

It’s another day of violence in Gaza, with Israel intensifying its attacks in both the north and the south, leaving “nowhere safe … and very little to survive on,” according to a UN spokesperson. In the south, Israeli airstrikes killed and wounded dozens of Palestinians, while in the north forces are heavily bombarding the area near the Kamal Adwan Hospital.

Nowhere to go: Israel has ordered Gazans to evacuate certain areas in the south but the alternative they provided for them was also under attack. “The reality is that no place is safe in Gaza. They kill people in the north. They kill people in the south,” one Palestinian told the Associated Press.

Bombing forces Rafah border closure: Egypt didn’t receive any wounded Palestinians or any of the almost 400 foreigners scheduled to cross the border yesterday due to the attacks on Khan Younis and Rafah, an Egyptian security source told Arab World Press. No aid entered Gaza yesterday, as members of the Palestinian Red Crescent were not able to make it to the crossing to receive the aid and fuel awaiting entry.

Another comms blackout: Palestinian telco Paltel said that all telecom services in Gaza have been lost after main fiber routes were cut off.

IN NUMBERS- Almost 16k Palestinians have been killed in Gaza since 7 October | At least 130UN staff have been killed | 20 hospitals and 46 medical facilities are out of service.

Also worth noting:

  • Some investors look to have had advance notice of the 7 October attack: An unusually large bout of short selling on some Israeli companies in the days leading up to Hamas’ 7 October attack suggests some with inside knowledge of the group’s plans tried to profit from it, according to US researchers.
  • Erdogan wants war crimes trial for Netanyahu: “Beyond being a war criminal, Netanyahu, who is the butcher of Gaza right now, will be tried as the butcher of Gaza, just as Milosevic was tried,” Turkish President Tayyip Erdogan said yesterday.
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6

Moves

SFE gets new general assembly, EMX has a new CEO

The SFE has a new general assembly: The Sovereign Fund of Egypt has a new general assembly featuring a lot of familiar faces and some new ones. New members of the assembly include: Business professorKhaled AbdelAziz Hegazy (LinkedIn), former Trade Minister Tarek Kabil (LinkedIn), and former International Cooperation Minister Ziad Bahha Eldin (bio). Planning Minister Hala El Said, Finance Minister Mohamed Maait, the National Bank of Egypt Chairman Hisham Okasha are among the reelected assembly members. All members are serving four-year terms.

Egypt’s commodities exchange is under new leadership: The board of the Egyptian Mercantile Exchange (EMX) has appointed EGX-veteran Hossam El Garrahi as its new managing director and CEO, according to a statement yesterday. Before his appointment, El Garrahi served as the managing director of the Egyptian Stock Exchange Holding Company for Financial Market Development, and held various senior positions at the EGX between 2010 and 2022.

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7

LAST NIGHT’S TALK SHOWS

Regional instability requires military strength, says Egypt’s defense minister

Defense Minister Mohamed Zaki’s speech during the Egypt Defense Expo (EDEX) dominated the airwaves last night, as the nation’s talking heads discussed the importance of the conference within the region’s larger geopolitical climate. The presidential election and the surging price of sugar also got attention.

Zaki emphasized the importance of strong military deterrence amid regional instability: Ala Mas’ouleety’s Ahmed Moussa showed highlights from Zaki’s speech, where he emphasized the important role Egypt’s military plays in the region amid the violence in Gaza, saying that “only the powerful have the ability to maintain peace” (watch: runtime, 13:44). He also claimed that the ultimate goal of the military campaign in Gaza is to liquidate the Palestinian cause, and that “the current world has no place for the weak.” Moussa, as well as Al Hayah Al Youm’s Lobna Asal (watch: runtime, 3:20), both reiterated the message, emphasizing the need for military strength amid rising instability.

Interview with a presidential candidate: Kelma Akhira’s Lamees El Hadidi invited presidential candidate Hazem Omar onto the show to discuss his plan for the economy (watch: runtime, 6:31). Omar said he would eliminate the massive difference between the official and parallel market rates and argued for a flexible exchange rate within a 5% limit. Where does he get the FX to do so? Debt exchange agreements with other nations. He also implied that enhancing Egypt’s human rights record would put us in a more favorable position with international financial institutions like the IMF.

Sugar crisis? Never happened, Holding Company for Food Industries CEO Adel Rushdi told Amr Adib. Rushdi claimed that his company singlehandedly pumps 400 tons of sugar per day for a price of EGP 27 per kilo, negating any claims that there is a crisis at all. “You can’t stop sugar smugglers, you can’t stop those who store it, and you can’t stop those who sell it for EGP 50. It’s supply and demand,” Adib asserted (watch: runtime, 2:39).

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8

EGYPT IN THE NEWS

Concerns about tourism post-7 October get more international ink

Tourism, the presidential election, and an update on the Regeni trial are all attracting attention internationally this morning.

The rundown:

  • Tourism: Concerns about the impact of the Gaza war on the local tourism industry is getting ink in the New York Times.
  • Of economic woes and elections:Reuters is out with a piece looking at the country’s economic problems as voters prepare to head to the polls next week.
  • Why are Turkish companies flocking to the Egyptian market? Our lower labor and production costs, cheap fuel, access to international markets, and no-nonsense visa regime, as well as economic headwinds in Turkey, according to Deutsche Welle.
  • The Regeni trial: The Associated Press reports that an Italian court will begin the trial of four Egyptian security officials accused of killing PhD student Giulio Regeni in February.
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DEBT-

Al Baraka lines up shariah-compliant financing from IFC: The International Finance Corporation (IFC) has agreed to lend USD 50 mn in sharia-compliant financing to Al Baraka Bank Egyptto finance MSMEs, the multilateral lender said yesterday. The funds will be used to finance thousands of small businesses operating across multiple sectors, with at least 25% of the money earmarked for women-led firms. The murabaha facility has a one-year tenor and is subject to renewal for an extra two years, Al Baraka said in adisclosure (pdf).

FINTECH-

Visa is working with the Central Bank of Egypt (CBE) to push mobile payments ahead, AlBorsa reported yesterday, citing an interview with Visa’s country manager Malak El Baba.

What could change? Allowing customers to make payments via smartphones, tablets and smartwatches in a process known in the world of fintech as tokenization. In addition to letting consumers pay for items without the need for a physical card, the new system will also lay the groundwork for phones to be used as a point of sale (POS) device. The technical phase of setting up the system is currently underway and is set to launch in 2024.

NBFS-

Valu to offer consumer finance options for GSK vaccines: Local fintech firm Valu will provide financing plans allowing people to purchase vaccines from GlaxoSmithKline (GSK) under an agreement signed by the two firms, it said(pdf) yesterday

REAL ESTATE-

Partment branches out across the Med: Homegrown proptech startup Partment is setting up shop in Greece on the back of a strong entry to the Egyptian market, it said(pdf) yesterday. Partment offers shares in co-owned second homes and has grown five times in its first year of operations.

SPACE-

MisrSat 2 (Egypt Sat 2) launched into space yesterday from the Taiyuan Satellite Launch Center in China, according to a statement from the Egyptian Space Agency (EGSA). The satellite is set to be used in the fields of agriculture, mineral exploration, surface water detection, and monitoring the effects of climate change. It was assembled and tested at EGSA’s Satellite Assembly, Integration and Test Center (AITC), which was established in partnership with China.

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9

PLANET FINANCE

The hype in the financial markets for lower interest rates is cooling (except in crypto)

Market hype over the Fed’s interest rate position is tempering: The meltup in the financial markets that accompanied statements made by the chair of the Federal Reserve last week stuttered in the week’s first day of trading yesterday, with stocks falling, US yields rising, and gold falling back from record highs. Risk assets soared last week on hopes that the US central bank would begin to cut interest rates sooner than expected.

Oil resumes slide on supply-cut scepticism: Oil traders yesterday continued to pour cold water on the fresh voluntary supply cuts announced by OPEC+ last week, with Brent and US crude futures both falling back during trading. Brent closed the session 1.7% lower while WTI lost 2.0% as traders expressed doubts that the measures would be enough to support prices.

ICYMI- Several members of the alliance of oil producing countries last week voluntarily agreed to remove c. 2.2 mn barrels per day from the global market in 1Q 2024, with Russia committing to an additional 500k bpd cut and Saudi Arabia rolling over its 1 mn bpd reduction into 2024.

One corner of the markets that isn’t listening: Crypto, where BTC and other tokens continued to soar yesterday despite a pullback in other asset classes. BTC surpassed USD 42k for the first time since April 2022, leaving it up 150% year-to-date and putting it on track for its biggest annual gain since 2020, according to Bloomberg.

Driving the frenzy: The typical volatility in the crypto markets is being intensified by anticipation that US regulators will approve the launch of BTC exchange-traded funds.

ALSO WORTH NOTING- Qatar wealth fund slashes Barclays stake: The Qatar Investment Authority is selling almost half its shares in Barclays in a move expected to raise almost USD 650 mn. The wealth fund is one of the British lender’s largest shareholders with a 5.3% stake, and is planning to sell more than 360 mn shares. (Bloomberg | Financial Times)

EGX30

25,265

+2.8% (YTD: +73.1%)

USD (CBE)

Buy 30.82

Sell 30.96

USD at CIB

Buy 30.85

Sell 30.95

Interest rates CBE

19.25% deposit

20.25% lending

Tadawul

11,191

-0.3% (YTD: +6.8%)

ADX

9,539

-0.2% (YTD: -6.6%)

DFM

3,988

-0.1% (YTD: +19.5%)

S&P 500

4,570

-0.5% (YTD: +19.0%)

FTSE 100

7,513

-0.2% (YTD: +0.8%)

Euro Stoxx 50

4,415

-0.1% (YTD: +16.4%)

Brent crude

USD 78.03

-1.1%

Natural gas (Nymex)

USD 2.69

-4.3%

Gold

USD 2,042.20

-2.3%

BTC

USD 42,072

+5.6% (YTD: +153.2%)

THE CLOSING BELL-

The EGX30 rose 2.8% at yesterday’s close on turnover of EGP 4.9 bn (63.1% above the 90-day average). Local investors were net sellers. The index is up 73.1% YTD.

In the green: B Investments Holding (+10.9%), E-Finance (+9.5%) and Fawry (+5.9%).

In the red: Alexandria Mineral Oils Company (-1.1%).

It’s a sea of red across Asian markets this morning, with CNBC suggesting that investors are at something of a pause point as they take stock of mixed economic data on Asian and global economies. Futures suggest markets across Europe and North America will follow suit at the opening bell later today.

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

Published every Tuesday in EnterpriseAM.

Read going Green
10

Going Green

From farm to table with minimal waste: A look at Egypt’s green food centers

PROJECT PROFILE- Egypt’s planned green food centers to cut down on food waste: With an eye to reduce food waste and streamline the logistics of getting food from farm to table, the Madbouly government is currently working on a “green food center” project. These centers — which will be logistics hubs for the wholesale of fruit and vegetables providing refrigeration, packing, and sorting facilities — are designed to serve both exports and the local market. The waste will be minimized by creating a more contained and sustainable supply chain.

Background: Egypt plans to set up 17 green food centers in concert with the private sector, with the first phases of the project set to kick off in 2024 and be completed within two years, the Supply Ministry said in October. The first center will be built in Ismailia, with required investments estimated at around EGP 3-4 bn. The centers developed in partnership with the French Development Agency will minimize food waste by implementing a more contained and sustainable supply chain.

Where the “green” comes from: In addition to minimizing food waste, the centers will also recycle food waste using renewable energy. All machinery and equipment used in the centers will run on renewables, according to Deputy Supply Minister Ibrahim El Ashmawy.

Our agriculture sector, by the numbers: Food exports accounted for 15% of Egypt’s overall non-oil exports during the first eight months of the year, rising 13% y-o-y to USD 3.43 bn, according to recent data from the Trade and Industry Ministry. Agricultural exports hit USD 2.67 bn during the same period, rising 20% y-o-y and accounting for around 11.7% of our non-oil exports in 8M 2023.

Fruit + veg waste is a big problem: On average, some 35-40% of produce is wasted in Egypt as a result of the disjointed packing and distribution network, which requires a large amount of transport, Vice President of the Federation of Egyptian Chambers of Commerce’s vegetables division Hatem El Naguib told Enterprise. That waste has already been reduced by some 15-20% thanks to improved road networks, which cut down on transport time and costs for farmers, El Naguib said.

Green food centers will help reduce that waste even further, with an expected 10-40% reduction in food waste, according to Ashmawy.

A key benefit of these centers: Stabilizing prices, especially with expectations of a further EGP devaluation and a potential increase in fuel prices, by restructuring the market and logistical infrastructure, Chairman of the Federation of Egyptian Chambers of Commerce Mohamed Attia El Fayoumi said.

The private sector is getting in on the action: The project is being implemented with private sector players, which will be responsible for designing, constructing and equipping, and operating and managing these centers, Ashmawy said. The private sector is “an essential partner” for the green food centers and for creating a more developed internal trade system, Ashmawy said, stressing the importance of increasing efficiency to improve the stability of food commodity prices.

And the gov’t wants to encourage more of that: The logistics sector is a priority area for the government to attract private sector investments, with ongoing talks with a number of “major” companies in the field to develop logistics hubs, Ashmawy told Enterprise.

Don’t forget the farmers, industry players say: In addition to working on streamlining the logistical aspect of the food and agricultural sector, Naguib also stressed the importance of working in parallel on a distribution network and setting up wholesale and retail markets to help keep prices in check. However, many of these centers and markets box out some farmers due to their high costs, says Farmers’ Syndicate head Hussein Abu Saddam.

Your top green economy stories for the week:

  • Scatec signs new USD 1.1 bn green methanol MoU in SCZone:Norwegian renewables developer Scatec has inked a USD 1.1 bn green methanol MoU with the Suez Canal Economic Zone (SCZone) on the sidelines of COP28 in Dubai.
  • That’s a wrap on EEHC’s solar tender: Three consortiums have submitted financial and technical bids in response to the Egyptian Electricity Holding Company’s tender to establish five concentrated solar power stations on the North Coast to power desalination plants.
  • Fresh funds for green projects: The Environment Ministry has received USD 12 mn from the multilateral environmental fund Global Environment Facility (GEF) to help fund four renewable energy and green hydrogen projects.
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CALENDAR

DECEMBER

3-5 December (Sunday-Tuesday): World Youth Forum, Sharm El Sheikh.

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.

14 December (Thursday): Bidding deadline for five gold mine concessions in the Eastern Desert.

14-21 December (Thursday-Thursday): El Gouna Film Festival.

16-18 December (Saturday-Monday): Egypt, Ethiopia, and Sudan to resume talks over the filling of the Grand Ethiopian Renaissance Dam (GERD).

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
  • FRA to announce chosen consortium for credit rating license
  • Kenyan trade conference in Egypt.

EVENTS WITH NO SET DATE

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

EVENTS WITH NO SET DATE

The Grand Egyptian Museum could be officially open to visitors some time between February and May 2024 .

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

JANUARY

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

7 January (Sunday): Coptic Christmas.

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

25 January (Thursday): Revolution day.

FEBRUARY

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

APRIL

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

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

MAY

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

5 May (Sunday): Coptic Easter.

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

29 May (Wednesday): Chicago Booth Executive Program

JUNE

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

30 June (Sunday): June 30 Revolution Day.

JULY

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

23 July (Tuesday): Revolution Day.

SEPTEMBER

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

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

OCTOBER

6 October (Sunday): Armed Forces Day.

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