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Monday, 4 Dec 2023

Privatization
Economy
Economy
War Watch
Moves
Last Night’s Talk Shows
Planet Finance
Blackboard
Calendar

Scatec could be doubling down on green methanol in Egypt

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Today at a glance

1

COP28

Scatec, SCZone ink USD 1.1 bn green methanol agreement.
2

Privatization

Military’s Chill Out fuel retailer earmarked for privatization as Wataniya sale pushed to 2024.
3

ECONOMY

Our budget deficit almost doubled in 1Q FY 2023-24.
4

ECONOMY

Government downgrades 2023-24 growth forecast.
5

WAR WATCH

Israel intensifies offensive in south Gaza.
6

WHAT WE’RE TRACKING TODAY

IMF to move forward with our loan agreement soon.
7

ALSO ON OUR RADAR

Disruptech invests in Banknbox.
8

ALSO ON OUR RADAR

Catalyst Capital Egypt invests in SCZone hub
9

BLACKBOARD

There’s growing Russian interest in our education sector.

Monday, 4 Dec 2023

Privatization
Economy
Economy
War Watch
Moves
Last Night’s Talk Shows
Planet Finance
Blackboard
Calendar

Good morning, ladies and gentlemen: On this Monday morning we bring potentially good news for our green energy ambitions as well more optimistic noises from the IMF about the future of our reform agenda and loan program. On the flipside, the government has dialed back its FY 2023-24 growth expectations and the latest fiscal data from the Finance Ministry aren’t exactly light reading.

PSA- It’s time to go back to WFH if you live or work in Maadi: The Madbouly government is tearing down the old North Tora bridge — the one that splits the former Tora prison from what was previously the prison’s olive garden — to complete the expansion of the Hasaballah Al Kafrawi axis. The bridge linked the Nile Corniche to the Autostrad and will be replaced by a “North Tora Axis” capable of handling more traffic.

The result yesterday was pure gridlock in Maadi. Officials have said nothing about whenthey expect the new route to open, prompting plenty of Maadi companies (Enterprise World Headquarters, included) to opt for a transition to WFH until we see how this shakes up.

** 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.

WATCH THIS SPACE-

#1-The IMF will move forward with Egypt’s USD 3 bn loan program “soon, soon,” the Fund’s Managing Director Kristalina Georgieva told Asharq Business yesterday in Dubai, without giving further details. Georgieva hailed the Egyptian authorities as “doing a very good job in a very difficult environment.”

The IMF is focused now on helping officials here get a grip on soaring inflation, after which it will look at the exchange rate policies, Georgieva told Sky News Arabia in a separate interview. Georgieva added that the IMF will very likely scale up Egypt’s current loan program due to the additional burden posed by the war in Gaza, in a repeat of remarks she made last month. Inflation surged to successive record highs this year on the back of successive currency devaluations and the FX shortage.

Remember: The IMF postponed reviews scheduled for March and September this year after authorities failed to meet several conditions of the facility, including a commitment to implement a fully flexible exchange rate. The central bank is widely expected to float the EGP after this month’s presidential election in a step expected to pave the way for the country to pass the reviews and receive the almost USD 700 mn in delayed loan payments.

#2- Officials are mulling the sale of EGP 8 bn worth of real estate assets to investors — including Saudi ones —in 1Q 2024, Public Enterprise Minister Mahmoud Esmat told Asharq yesterday. Heliopolis Housing and Development is among the state-run companies investors are looking at, Esmat said, explaining that the partnerships will see investors developing land plots owned by the state-run companies.

Remember:The state-owned National Organization for Social Ins. (NOSI) acquired 100% of the Heliopark project from Heliopolis last month in a sale worth EGP 15 bn.

HAPPENING TODAY-

#1 It’s day five of COP28 in Dubai: Gender equality will be among today’s main themes: How women are affected by climate change and how climate action and finance can bhelp gae directed to close the gender gap. Other topics of discussion include clean energy transition, mobilizing Islamic finance for climate, and sustainability in finance, trade and investing.

Planning Minister Hala El Said is in Dubai for the gathering and set to attend the Arab Women Leaders’ Summit with WISER and as well as a session on women’s participation in climate action and sustainable development.

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

#2 The Egypt Defence Expo (EDEX) is finally here: Around 35k defense and security professionals from across the world will land in Cairo today for the opening of the defence expo at the Egypt International Exhibition Center, which runs through Thursday. You can register to attend here.

#3-The CBE plans to auction USD 990 mn in one-year treasury bills today, according to data on its website. The USD-denominated issuance will be settled on Tuesday.

#4- It’s the second day of the World Youth Forum, which is taking place in Sharm El Sheikh. The event wraps tomorrow.

HAPPENING TOMORROW-

PMI: We’ll find out how Egypt’s non-oil private sector performed in November when S&P Global publishes the latest PMI figures.

HAPPENING THIS WEEK-

FX reserves: November’s foreign reserves figures should be released by the central bank this week.

HAPPENING NEXT WEEK-

Elections: Voters here at home 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.

AND- Inflation figures are due out on Sunday, 10 December.

THE BIG STORY ABROAD-

Israel’s war on Gaza continues to dominate the world’s attention this morning: The IDF’s escalating attacks in the south of the enclave and a reported attack on a US warship in the Red Sea by the Iran-aligned Houthis are leading coverage in the western press. (Associated Press | Reuters | Bloomberg | Financial Times | New York Times | Washington Post | Wall Street Journal | BBC)

THE REALIGNMENT-

One less Bric in the wall: Argentina looks like it’ll be leaving the Brics before it has joined it if the country’s new chief diplomat is to be believed. The South American country — along with Egypt and four other nations — was expected to join the alliance of emerging economies on 1 January, a decision that Javier Milei’s new hard-right administration will reverse. “We will not enter the Brics,” incoming foreign minister Diana Mondino wrote on X last week, following through on Milei’s campaign pledge for a foreign policy reset that would see the country distance itself from China and strengthen ties with Washington.

WAR ECONOMICS-

War-swollen defense stocks outperform S&P 500: Defense stocks have outperforming the S&P 500 since the outbreak of the war in Gaza on 7 October, stoking ESG concerns among everyday investors owning shares in index-tracking and target-date funds, the Wall Street Journal writes.

The numbers: Shares of General Dynamics have gained 13.5% since the outbreak of the waron Gaza, while RTX and Lockheed Martin have rallied 18% and 12.2%, respectively. That’s significantly higher than the 6.6% gained by the S&P 500 over the same period.

For conscious investors:Weapon Free Funds is a database, run by the nonprofit organization As You Sow, which flags arms makers present in mutual funds and exchange-traded funds. The website traffic has risen 5x in seven weeks following 7 October, according to the WSJ.

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.

ICYMI-

Missed this week’s Inside Industry? In our weekly vertical exploring all things industry and manufacturing, we looked at what the government is doing to boost our marble and granite industry.

*** It’s Blackboard day: We have our weekly look at the business of education in Egypt, from pre-K through the highest reaches of higher ed.

In today’s issue: We looking at signs of growing Russian interest in our education industry — a sector in which Russia was never previously a player. Foreign interest in K-12 education (sometimes a touchy subject) and in post-secondary education (now required of any new institution that wants to open) has previously been dominated by American, Canadian, British, French, German, and Japanese curricula and by partnerships with UK and Canadian universities.

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Scatec could embark on another green methanol project in Egypt:Norwegian renewables developer Scatec has inked a USD 1.1 bn green methanol MoU with the Suez Canal Economic Zone (SCZone) yesterday on the sidelines of COP28 in Dubai. The agreement will help Scatec provide ships bunkering at the East Port Said Port with green fuel.

In detail: The methanol will be produced using a 190 MW electrolyzer that will rely on 317 MW of wind energy and 140 MW of solar energy, with the aim of producing an annual 100k tons of green methanol by 2027.

This is the second Scatec project unveiled in as many days: On Saturday the company inked an agreement with the Egyptian Electricity Holding Company (EEHC) to build a 1-GW solar and 200-MWh battery storage project in Egypt — the country’s first. The project will be funded by the African Development Bank and will help meet energy needs during periods of heightened demand.

Another green methanol project? Earlier this year, the Oil Ministry said that Scatec has inked an agreement with the Alexandria National Refining & Petrochemicals Company (ANRPC) to work on a USD 450 mn green methanol plant in Damietta. The plant will initially produce 40k tons of green methanol a year, before increasing to 200k tons.

SCZone wants to roll out green methanol bunkering services before 2027 — expanding its bunkering services after receiving requests to supply ships with green methanol and gas. The SCZone has handed out a six-month renewable license to OCI subsidiary OCI Hyfuels, giving it the greenlight to roll out green methanol bunkering services at the East and West Port Said ports. The world’s first-ever green methanol-powered container ship berthed in East Port Said Port earlier this year.

Scatec loves Egypt: The Norwegian developer is part of the consortium establishing Egypt’s first green hydrogen plant, and earlier this year signed early agreements to construct a USD 450 mn green methanol plant, a 1 mn ton-per-year green ammonia plant, and and a 3-GW electricity link that would transport renewably-generated power from Egypt to Europe.

And more is in the works: Scatec is constructing a 5-GW wind farm worth some USD 5 bn in Sohag.

ALSO FROM EGYPT IN COP28 –

#1-Egypt to join Blue Med Partnership: Egypt inked a letter of intent to join the BlueMediterranean Partnership (BMP) — a vehicle that aims to mobilize funds and technical assistance for the southern Mediterranean region’s blue economy. The BMP will kick off operations early 2024. (Statement)

#2- Egypt joins BESS: Egypt joined 10 other nations that committed to the Battery Energy Storage Systems (BESS), which aims to secure 400 GW of renewable energy by 2030 to help solve energy poverty. (Press release)

#3- Environment Minister calls for more funding: Developing nations need an annual USD 160 bn for climate adaptation, Environment Minister Yasmine Fouad said yesterday. (Ahram Online)

MORE GREEN NEWS FROM EGYPT-

Checking in on Benchmark Power’s ammonia plant: The long overdue green ammonia plant courtesy of Benchmark Power International (BPI) is still happening. BPI will set up a USD 1 bn green ammonia plant in Suez, which will produce 183 tons of green hydrogen a day to produce 1k tons of green ammonia, according to a cabinet statement. The statement didn’t provide a timeline for the project.

Over five years in the making: We first heard of the project in 2019, after BPI inked an MoU with the state-owned El Nasr for Fertilizers & Chemical Industries.

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1

Privatization

Military’s Chill Out fuel retailer earmarked for privatization as Wataniya sale pushed to 2024

One stake sale is being lined up as another is delayed: The government is looking to offload a stake in the military’s Chill Out fuel retailer, Planning Minister Hala El Said told Asharq Business on the sidelines of COP28. The company is owned by the National Service Projects Organization (NSPO) via its National Roads Company subsidiary, and would become the second military-owned fuel retailer to sell shares to private investors after Wataniya, which is also owned by the NSPO. El Said didn’t share any details regarding the timeline or percentage of the stake sale.

The plan: The government will begin restructuring the company ahead of the stake sale, she said. The process will begin after the government concludes the sale of Wataniya under its privatization program.

Speaking of which: Wataniya stake sale delayed. We were expecting the government to finalize the sale later this month but according to El Said the transaction will take several more weeks to close. The minister didn’t explain the reasons behind the delay.

Background: The government and the Sovereign Fund of Egypt have been working on the sale of the fuel retailer for the past three years. It’s unclear how much of the company will be sold though SFE CEO Ayman Soliman has said that 100% of the firm could potentially be sold off. Taqa Arabia is the only company to have publicly declared interest in the company’s assets, though a number of other firms have been rumored to be lodging bids, including Abu Dhabi National Oil Company (Adnoc) and Shell. The NSPO acquired a 20% stake in Taqa earlier this year.

The NSPO will launch a new line of filling stations under the brand A1 before the end of the year.

Remember: The government rebooted its privatization program earlier this year, naming 35 companies that will sell stakes to private investors as part of the government’s efforts to end the ongoing currency crisis and meet the terms of its USD 3 bn loan program with the IMF.

ALSO- A date for the hotels company stake sale:The government plans to complete the sale of a stake in a group of historic hotels before the end of the year, El Said said, echoing statements made by Soliman last month. She didn’t provide further details.

Background: The Planning Ministry said in July it had agreed to sell a 37% stake in the government’s hotels holding company to a group that includes a unit of EGX-listed hotel and real estate player TMG and unnamed foreign investors for USD 700 mn. An unconfirmed report last month claimed that the consortium will increase its stake to 51%.

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2

ECONOMY

Egypt’s budget deficit widens to 3.9% during 1Q FY 23-24

Egypt’s budget deficit almost doubled y-o-y in the first quarter of the current fiscal year as rising borrowing costs squeeze public finances. Figures in the Finance Ministry’s latest monthly report (pdf) show that the deficit widened to 3.9% of GDP in 1Q FY 2023-24 from 2.1% a year earlier, largely due to the government’s spiraling interest bill.

Interest payments more than double: We spent EGP 477.5 bn on debt service during the July-September quarter, more than double the EGP 216.9 bn paid out during the same period last year. The mounting interest bill significantly outpaced rising revenues: the cost of debt service alone was more than 40% higher than total revenues during the quarter.

Remember: Egypt is expected to spend at least USD 42.3 bn on foreign debt repayments in 2024, according to central bank projections out last week.

The FinMin’s crystal ball: In the FY 2023-24 state budget, the Finance Ministry forecast:

  • the budget deficit to widen slightly to 7.0% of GDP this fiscal year from 6.0% last year
  • the government’s interest bill to climb 45% to EGP 1.12 tn. We’ve already spent over 42% of this in the first quarter alone.

There’s little consensus about how much the deficit will widen through the year: The IMF expects the deficit to widen significantly to 10.7% this year, while S&P Global Ratings anticipates only a modest deterioration to 6.8%.

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3

ECONOMY

Egyptian government cuts 2023-24 growth forecast

Lower growth ahead: The Madbouly government has downgraded its growth forecast for the current fiscal year by 0.7 percentage points, according to statements made by Planning Minister Hala El Said to CNBC Arabia yesterday (watch, runtime: 11:48). The minister said she expected the economy to grow at a 3.5% clip in the fiscal year ending June 2024, down from her previous 4.2% forecast made last month.

What she said: “This forecast may increase a little or decrease a little depending on the impact of the war on our borders,” El Said said.

This is more in line with what international monitors are saying: The IMF, the World Bank and S&P Global have in recent weeks forecast 3.5-3.7% growth in FY 2023-24.

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Despite current economic challenges, Egypt’s commitment to its 2030 Vision to shift to a more sustainable economy continues apace. One of the clearest proof points of this commitment is Egypt’s successful issuance for its first three-year sustainability panda bond with a RMB 3.5 bn issuance. This is another market ‘first’ for Africa and the Middle East region following Egypt’s first ever sovereign green bond issuance in 2020.

A panda bond is a RMB-denominated bond, sold in China, from a non-Chinese issuer. This transaction is considered the largest panda sustainable sovereign issuance, giving Egypt access to untapped sources of capital to drive sustainable economic growth.

A door-opener for emerging markets

The transaction is significant because this inaugural sustainability panda bond integrates a first-of-its-kind dual guarantee structure, making it the first ever panda bond backed by two supranational entities.

The combined guarantees from the African Development Bank and the Asian Infrastructure Development Bank, with triple-A ratings, generated significant interest from investors and secured competitive terms for the transaction.

This is an important step that can pave the way for other issuers, especially sovereigns in emerging markets and Africa, to access a new innovative funding solution that will enable them to penetrate new markets and mobilize sustainable financing at competitive terms from international investors and accelerate their net zero transition strategies.

HSBC connections

The Egyptian government hired HSBC as a joint bookrunner to execute this innovative transaction. Our international connectivity and deep roots in China and the Middle East helped us design the transaction’s structure and therefore help Egypt to diversify funding sources with access to the world’s second-largest bond market.

The proceeds will be used to fund sustainable projects across multiple business sectors including clean transport, healthcare, sustainable water use, renewable energy, affordable housing and digital infrastructure as well as biodiversity conservation. This aligns perfectly with Egypt’s national climate change strategy.

We’re proud of our role in this important transaction across this very important trade corridor between the Middle East and Asia. We are proud to work in partnership with governments and our customers to mobilize international finance to help build a more sustainable, resilient, and prosperous future.

Nadeem Habib (LinkedIn) is head of financial institutions and public sector at HSBC Egypt.

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4

WAR WATCH

Israel intensifies offensive in south Gaza, Houthis attack US warship in Red Sea

Israel intensified its air campaign across Gaza yesterday, including in the south where it issued new evacuation orders to civilians. Israeli troops were reported to be mounting a ground offensive in the south of the enclave and stepped up bombing raids on the southern city of Khan Younis, ignoring US calls to spare civilian lives and “not repeat the same scale of destruction” inflicted on the north. “It will be as fierce, with no lesser results … [Israel’s campaign] will be as thorough in the south as it has been in the north,” IDF chief of staff Herzi Halevi said. An unnamed senior source from the Al Qassam Brigades, Hamas’ military wing, told Palestinian media that as many as 70% of Israeli ground forces had withdrawn from the north.

Death toll surpasses 15k: The death toll from Israeli strikes in Gaza has risen to at least 15,523 — 70% of which were women and children — as of yesterday. Over 41k people have been left wounded due to the fighting, while over 1.8 mn — representing 80% of Gaza’s population — have been internally displaced.

  • Egypt will take in more injured Gazans: Qatar will pay for some 1.5k woundedPalestinians to receive treatment in Egypt, Doha said yesterday.
  • Israel is preparing for life post-war: Israel told Egypt, Jordan, the UAE, Saudi Arabia, and Turkey that it wants a “buffer zone” between Gaza and Israel to prevent any potential attacks on Israel after the war ends.
  • Israel wants to take its war on Hamas international: The head of Israel’s domestic intelligence agency has vowed to eliminate Hamas leaders abroad, including in Qatar and Turkey.

REGIONAL ESCALATION- The Iran-aligned Houthis in Yemen targeted a US warship and several commercial vessels in the Red Sea yesterday, the Pentagon said, marking a significant escalation in the conflict outside the borders of Israel / Palestine. US Central Command (Centcom) reported four separate incidents of missile and drone attacks on three commercial ships yesterday, and said it will consider “all appropriate responses.”

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5

Moves

Dalia El Gabry to lead Shell in Egypt. Plus news from: EasyCash, Canal Shipping

#1- Shell Egypt has a new VP: Oil and gas giant Shell Egypt has appointed Dalia El Gabry (LinkedIn) as its new vice president and country chair, it said (pdf) yesterday. During her 28-year tenure at the company, El Gabry has served as the company’s commercial general manager in Egypt and has held other senior positions with the company in Qatar, Morocco, South Africa, Norway, and the Netherlands. She is taking over from Khaled Kacem (LinkedIn), who has been leading the company in Egypt for the past four-and-a-half years.

#2- Canal Shipping Agencies names new CEO: Mohammed Abdo Mohamed Karar has been appointed as CEO of the Holding Company for Maritime and Land Transport subsidiary Canal Shipping Agencies, according to an EGX disclosure (pdf) yesterday. Karar previously served as board chairman at the company.

#3- EasyCash has a new chair: Former investment minister Sahar Nasr (LinkedIn) has been appointed the chair of mobile payments firm EasyCash, according to Al Mal. Nasr served as Egypt’s investment and international cooperation minister from 2015 until 2019.

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6

LAST NIGHT’S TALK SHOWS

Egyptian talk shows cover the latest on our IMF agreement + 2023 elections

It was another econ-heavy night on the airwaves, as our favorite talk show host Lamees El Hadidi brought us the latest on our IMF loan agreement. The remaining talking heads were hyperfixed on the presidential elections.

War on our border = more money from the IMF? Egypt is well-positioned to secure a larger loan agreement from the IMF given the country’s economic resilience amid unprecedented pressures, House Budget Committee head Fakhri El Fiqi told El Hadidi (watch, runtime: 10:25). “Egypt can commit to a more flexible exchange rate as long as it doesn’t pose a threat to national security,” El Fiqi said, explaining that this can only be achieved if inflation falls to the CBE’s target of 7% (±2%) and the economy has enough FX reserves to be to maintain the price of the EGP against the greenback.

Refresher: The IMF has been slow to move forward with Egypt’s USD 3 bn loan program, with our March and September reviews both getting pushed back as authorities fail to meet the fund’s conditions. Last we heard the fund is “seriously considering” increasing our loan program as the conflict in Gaza poses difficulties for the country, with Egypt reportedly in talks to raise the program to USD 5 bn.

AND- Getting a little patriotic: As Egyptians at home prepare to head to the polls to cast their vote in the 2023 presidential elections, El Hekaya’s Amr Adib (watch, runtime: 1:24) called on his viewers to “respect themselves, their children, and their future” and vote.

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FINTECH-

#1- Disruptech invests in fintech player Banknbox: Local fintech VC firm Disruptech has inked an agreement with digital banking and Cairo-based third-party payment processing platform BanknBox, it said in a statement (pdf) Saturday. The statement said that the partnership comes as a bid to introduce new integrated payment solutions to the region, but did not disclose the value of the investment.

ICYMI- BanknBox announced plans to set up a regional HQ in Egypt in August backed up with a USD 10 mn investment. BanknBox wants to expand into the Middle East and Africa and its CEO Bassem Mahmoud told us at the time that they were finalizing agreements to provide services to five unnamed local fintech companies and banks.

Disruptech is a big player in our fintech scene: The local fintech fund announced its plans to invest USD 5 mn in four local fintech startups in 2023 back in July. This fresh splurge of investments comes on top of its existing portfolio with investments in up-and-coming startups including Brimore, Cassbana, Fatura, Gahez, Khazna, MNT Halan, Mozare3, and numerous other homegrown startups.

#2- You can now pay for gold online using your card: A strategic partnership between Evolve Investment Holding’s online precious-metals trading subsidiary mnGm and EFG Hermes payment processing subsidiary PayTabs Egypt has made trading gold online by card possible for the first time in Egypt,according to a joint statement (pdf) yesterday.

INVESTMENT-

Catalyst Capital Egypt invests in SCZone industrial and logistics hub: Impact investing fund Catalyst Capital Egypt has acquired a significant minority stake in a new Alex Steel subsidiary looking to develop an industrial and logistics hub in the Suez Canal Economic Zone, according to a joint statement (pdf). The fund has invested EGP 100 mn into the company — named Alexandria for Industrial Development (AID) — in return for a 30% stake, Catalyst Capital Partners Managing Director Abdelaziz Abdel Nabi reportedly told Al Mal.

The investor: The fund — the first of its kind in Egypt and the Middle East — was launched lastyear by MENA-focused private equity outfit Catalyst Private Equity with backing from the UN Development Programme.

INFRASTRUCTURE-

#1-Alstom to sign contract for Metro Line 6 in 1Q 2024: The Transport Ministry is finalizing the terms and conditions of its agreement with French rolling stock manufacturer Alstom to design and maintain Metro Line 6, Al Borsa reports, citing Alstom Egypt CEO Ramy Salah. The two parties are expected to sign the contract in 1Q 2024, Salah was quoted as saying. The company will be responsible for the signaling, electrical systems, infrastructure, and communications for the line. Construction is set to begin this month.

FYI- The 27-station, 35-km line will be the first driverless metro in Africa and will link Shubra El Kheima in the north to New Maadi in the south.

#2- TCI inks Arish cement export terminal project: Abu Dhabi Ports’ (ADP) terminal operator subsidiary Transcargo International (TCI) signed an agreement with Cementir Holding subsidiary Sinai White Portland Cement to build and operate Egypt’s first silo terminal for the bulk export of white cement from Al Arish Port, according to a statement (pdf). The terminal will have an annual export capacity of more than 200k tons and will feature six silos with a total storage capacity of 60k tons.

Déjà vu? Unconfirmed local media reports reported in June that TCI was planning to launch a tender for the construction of nine silos for storing cement and dry bulk cargo at a cost of around the EGP 1 bn mark at Al Arish Port Said and West Port Said Port. Before this, TCI also signed a 15-year agreement with the Suez Canal Authority back in March to develop a cement terminal.

ENERGY-

Debts to Capricorn Energy continue to rise: UK-based oil and gas firm Capricorn Energy said last week that it has some USD 170 mn in outstanding receivables as of the end of October from state-owned Egyptian General Petroleum Corporation (EGPC), of which USD 139 mn is overdue. The company added that it is confident it will fully collect its dues and that it is working with EGPC to solve the issue.

Sound familiar?: Our overdue debts to the British petro firm have grown more than 30% since May, when they clocked in at USD 104 mn. If you’re wondering why, look no further than our ongoing FX shortage that is making it harder for the Madnouly government to pay its dues to international companies.

Capricorn doesn’t seem to put off its Egypt operations: It said inApril that it plans to scale back exploration elsewhere around the world to focus on optimizing its Egyptian operations. Despite not being able to collect on its debts from us, the company also announced its intention to go ahead with investor payouts worth USD 575 mn throughout this year.

TECH-

Our tech manufacturing industry is getting a helping hand from a Silicon Valley giant: The Information Technology Industry Development Authority (ITIDA) inked an MoU with American tech giant Synopsys and Egyptian semiconductor manufacturer SI-Vision to increase electronics exports, according to a cabinet statement on Thursday. Synopsis will also support SI-Vision create 500 new jobs over the next three years and expand its operations.

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7

PLANET FINANCE

To cut or not to cut: Everyone has something to say about how central bankers are tackling inflation

Policymakers want rate cuts, and they want them now. Analysts and economists are not happy with central bankers’ wait-and-see approach, pilling pressure on central banks to start moving forward with rate cuts before economies start to suffer, the Financial Times wrote. While central bankers remain worried about easing monetary policy prematurely, policymakers believe that waiting longer than necessary could “harm weakening economies or hobble heavily indebted governments.”

Why the hold up? Central banks are scared of underestimating inflation and declaring victory in their fight against inflation too soon. “The question of a cut may arise when the time comes during 2024, but not now: when a remedy is effective, you have to be patient enough on its duration,” the Bank of France governor said.

Calls for rate cuts will likely fall on deaf ears, with the OECD expecting central banks to keep rates higher than expected in 2024 due to continuing cost pressures for businesses and rising food and energy prices for consumers.

Crypto bros believe rate cuts are coming. BTC rose above USD 40k for the first time since May 2022, reaping the benefits of a market-wide rally triggered by investor beliefs that the Federal Reserve has reached the end of its aggressive tightening policy, Bloomberg reported.

CORRECTION- We incorrectly said that Dubai Taxi’s IPO is the largest IPO that Dubai has ever had. We have since amended the story on our website.

EGX30

24,572

-0.7% (YTD: +68.3%)

USD (CBE)

Buy 30.83

Sell 30.96

USD at CIB

Buy 30.85

Sell 30.95

Interest rates CBE

19.25% deposit

20.25% lending

Tadawul

11,219

+0.4% (YTD: +7.1%)

ADX

9,539

-0.2% (YTD: -6.6%)

DFM

3,988

-0.1% (YTD: +19.5%)

S&P 500

4,595

+0.6% (YTD: +19.7%)

FTSE 100

7,529

+1.0% (YTD: +1.0%)

Euro Stoxx 50

4,419

+0.8% (YTD: +16.5%)

Brent crude

USD 78.88

-2.5%

Natural gas (Nymex)

USD 2.81

+0.4%

Gold

USD 2,089.70

+1.6%

BTC

USD 39,724

+0.3% (YTD: +139.6%)

THE CLOSING BELL-

The EGX30 fell 0.7% at yesterday’s close on turnover of EGP 3.4 bn (14.2% above the 90-day average). Regional investors were net sellers. The index is up 68.3% YTD.

In the green: GB Corp (+7.8%), Madinet Masr (+6.5%) and Qalaa Holdings (+6.1%).

In the red: Mopco (-3.5%), Ezz Steel (-3.2%) and Edita (-3.2%).

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Our weekly deep dive into education in Egypt, from K-12 to post-secondary.

Published every Monday in EnterpriseAM.

Read Blackboard
8

BLACKBOARD

Are we witnessing the rise of Russian-Egyptian cooperation in the education sector?

There’s a growing Russian presence in our education space: Over the past several weeks, Russia has announced a number of new programs and investments in Egypt’s education sector, including the planned opening of the first Russian school in Egypt in the upcoming academic year, courtesy of Synergy institution. The increasing Russian investment in our education sector comes both as a move to tap into a growing space for foreign investment in local education, and to encourage the flow of Egyptian students looking to study in Russia.

The goal? Driving Egyptian students’ interest in Russian education: The opening of such schools is designed to encourage Egyptian students towards attending Russian universities by creating local exposure to the Russian education system, Russia’s Consul General in Hurghada Viktor Vorobiev, is quoted as saying by RT.

Russian universities are opening branches in Egypt: On the higher education level, the Russian University of St. Petersburg is on track to set up a branch in New Cairo, while the Kazan Federal University is opening a branch in 6th of October City. The branches will be hosted by a university named the Modern Group University Foundation, which the Madbouly Cabinet approved in October. The Egyptian branches of both universities offer programs in general medicine, dentistry, and pharmacy.

REMEMBER- Foreign branches have become increasingly popular in the past few years:After ratifying the International Branch Campus Act in 2018, Egypt allowed international universities to set up local branches by building their own campus or partnering with an Egyptian company. The program has largely been successful, with several international universities moving to open branches in Egypt, including Portugal’s Nova University, the European Universities in Egypt to host the UK’s University of London and University of Central Lancashire, and the University of Texas, to name a few.

How will these university branches be run? The universities will have councils headed by the president of each branch. Also sitting on this council will be the directors of the programs offered, as well as representatives from our Higher Education Ministry. This council will be in charge of academic supervision, ensuring that the operations of the institutions match the standards of quality set by the parent institutions. It will also manage the university in terms of scientific research and administrative affairs, determining the number of students and the tuition fees charged for each program.

Scholarships and financial aid: The establishment of these branches was conditioned on the provision of full and and partial scholarships, in accordance with the practice at the parent university — both for academic and athletic excellence. Based on specific parameters, the awarding of these scholarships will be down to the Higher Education Ministry, to students with outstanding academic and athletic performances. The number of annual scholarships awarded to Egyptian students studying in Russia has also been increased to 318, said Russian Cultural Centers head Murad Gatin.

We have a keen partner in Russia: So far, 18 Russian universities have held exhibitions in Egypt to recruit students, reflecting the country’s interest in cooperating with Egypt, our sources indicate.

…And a local sector ripe for investments: Egypt is open to foreign investments in its education sector, especially ones from countries that have a strong history in the field of education, as well as a strong tradition in scientific research, transfer of expertise, and scientific exchange, a source from the Higher Education Ministry told Enterprise. Pulling in these investments can strengthen Egyptian students’ prospects of meeting the expectations of the job market, the ministry source said.

Moving with the greater trend of internationalizing education in Egypt: There is a general direction to internationalize the education sector, including through inviting foreign branch campuses, as well as allowing Egyptian students to complete the foundation year of foreign universities in Egyptian universities to prepare to travel abroad for study. This is both a step towards a more international education system, as well as a way to combat brain drain.

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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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