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Tuesday, 6 Jun 2023

What We're Tracking Today
Privatization
Ipo
Economy
M&a Watch
Investment Watch
Budget Watch
Automotive
Earnings Watch
Moves
Last Night’s Talk Shows
Egypt In The News
Also On Our Radar
Planet Finance
Diplomacy
Going Green
Calendar

Telecom Egypt, Qatar sovereign fund reenter talks for Vodafone Egypt stake sale

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Today at a glance

1

Privatization

 Telecom Egypt, Qatar sovereign fund reenter talks for Vodafone Egypt stake sale.
2

What We're Tracking Today

 Will the government sell off more of TE?
3

IPO

 Taqa Arabia to debut on the EGX in two weeks -report.
4

Economy

 Non-oil private sector contracts at softest pace in 15 months in May.
5

M&A WATCH

 Elevate Healthcare acquires majority stake in Nile Scan.
6

BUDGET WATCH

 Senate approves FY 2023-24 development plan.
7

Investment Watch

 Indian firm to build USD 30 mn plastics plant in SCZone.
8

PLANET FINANCE

 US regulator sues Binance alleging market manipulation, misuse of funds.
9

Going Green

 A guide to our planned electricity link-ups with Europe.

Tuesday, 6 Jun 2023

What We're Tracking Today
Privatization
Ipo
Economy
M&a Watch
Investment Watch
Budget Watch
Automotive
Earnings Watch
Moves
Last Night’s Talk Shows
Egypt In The News
Also On Our Radar
Planet Finance
Diplomacy
Going Green
Calendar
1

What We're Tracking Today

More sandstorms are on the way

Happy hump day, ladies and gents: We have a packed issue for you this morning, so let’s dive in.

PSA- Khamaseen isn’t done with us yet: Expect a new wave of dust storms on Wednesday and Thursday, with a chance of light to moderate rain in some areas, Egyptian Meteorological Authority spokesperson Manar Ghanem said last night El Hekaya (watch, runtime: 3:01).

HAPPENING TODAY-

The International Telecommunication Union is in Sharm: Communications Minister Amr Talaat will open the International Telecommunication Union’s (ITU) Global Symposium for Regulators in Sharm El Sheikh. Held under the theme “Regulation for a sustainable digital future,” the three-day event will see regulators and policymakers discuss key issues surrounding digital infrastructure. Registration for conferences, meetings and events can be found here.

HAPPENING TOMORROW-

Africa Health Excon: The four-day health conference will kick off at the Egypt International Exhibition Center on Wednesday. Check out the agenda here.

CANCELED- The National Dialogue has postponed all of this week’s sessions after the venue hosting the event was damaged in last week’s bad weather, the dialogue’s general coordinator, Dia Rashwan, said yesterday.

WATCH THIS SPACE-

Will the government sell off more of TE? The Madbouly government is looking to sell an additional stake in Telecom Egypt, a government source with knowledge of the matter told us yesterday. The state last month sold a 10% stake in the company, raising some EGP 3.95 bn.

THE BIG STORIES ABROAD-

There are two stories leading the global business press this morning:

#1- US regulators crack down on Binance: The world’s largest crypto exchange is facing a lawsuit from US regulators who allege that it misused client funds and ran an illegal platform in the US. We have more on this in this morning’s Planet Finance, below. (Reuters | Bloomberg | Financial Times| Wall Street Journal | CNBC)

#2- Apple’s entry into the AR space is dominating the tech conversation: At its annual developer conference, Apple yesterday announced its arrival into augmented reality with its new ‘Vision Pro’ headset. Most of the chatter is focusing on the steep price: starting at USD 3,499, the headset is more than three times higher than the most expensive model sold by Meta, the current AR market leader. Check out the unveiling here (watch, runtime: 2:21). Picking up the news are: Reuters | Bloomberg | Financial Times | Wall Street Journal | CNBC.

Also from the conference: A new 15-inch MacBook air, Mac Pro, a more powerful M2 Ultra chip, and a host of software updates. Techcrunch has you covered.

THE REALIGNMENT-

Turkey’s ties with the Arab world will likely continue to thaw under the country’s new foreign minister, Hakan Fidan, according to Bloomberg. Fidan has already held back-channel talks with countries where relations were previously tense, including Egypt, as part of a broader realignment with the region and a need to attract investment to Turkey. He was appointed to the cabinet on Saturday following Turkish President Recep Tayyip Erdogan’s reelection last week.

Remember: Erdogan and President El Sisi agreed last week to “immediately” move to restoreties and reappoint ambassadors. The two leaders are expected to meet soon for their first face-to-face talks.

Iran opens its doors in Saudi: The Iranian Embassy will today reopen its embassy in Riyadh for the first time since 2016, Iranian media quoted the country’s foreign ministry spokesperson as saying yesterday. In a surprise turn in March, the two former foesannounced they would resume diplomatic relations and reopen embassies in a China-brokered agreement.

CIRCLE YOUR CALENDAR-

Key data points to look out for over the coming weeks:

  • Foreign reserves: The central bank will publish foreign reserves figures for June this week.
  • Inflation: Capmas and the central bank should be out with May’s inflation data on 8 June.
  • Interest rates: The central bank will meet to review interest rates on 22 June.

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

*** 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: How do electricity interconnectors work and why do we have so many planned projects in the pipeline?

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Solasi Wellbeing Festival has been lovingly created by Yes Yoga and Osana Family Wellness and takes place at the beautiful Somabay from 21-23 September.

Solasi brings you Sunrise Yoga, Sound Healing, Funky Classes, Morning Runs, Enlightening Workshops, Healing Treatments, Tai Chi, Meditation, Kids Activities, locally sourced food, and lots of dancing.

Don't miss your chance to take #ThreeDaysOff and flow with us at Solasi at Somabay. Head to www.solasifestival.com to find out more and book your pass today.

2

Privatization

Telecom Egypt, Qatar sovereign fund reenter talks for Vodafone Egypt stake sale

QIA, TE back at the negotiating table over Vodafone stake sale: Qatar’s sovereign wealth fund, the Qatar Investment Authority (QIA), has resumed talks to purchase a stake in Vodafone Egypt from minority shareholder Telecom Egypt (TE), a government source told Enterprise.

The details are still up in the air: The two sides are yet to reach an agreement over the value or size of the stake. The EGX-listed telecom company holds a 45% stake in Vodafone Egypt. The government owns 70% of TE.

Talks have been stalled for months now: We’ve heard little on the progress of negotiations between TE and QIA since February, when talks reportedly hit a wall over how much of the company should be on the table. QIA has been eyeing Vodafone Egypt since at least last September, when a source told us it was one of three GCC sovereign funds looking to snap up TE’s stake.

What’s the hold up? QIA had reservations about the investment climate in Egypt, in light of current economic challenges and the weaker EGP. Representatives of the sovereign fund had held talks with the Madbouly government and the central bank to ensure the climate is fit for investment and that the state is working to improve conditions, our source tells us. The government’s Supreme Investment Council recently issued 22 decisions aimed at putting in place a more pro-business regulatory framework and attracting more foreign investment.

More acquisitions to come? The Qatari fund also expressed interest in some of the 32 state-owned companies that are part of the government’s privatization plan, namely ports and firms in the oil sector, our source says. Agreements are expected to be announced before August, they added.

Potential candidates include: QIA’s Maha Capital earlier this year reportedly submitted an offer to take majority stakes in Damietta and Port Said container terminal operators — Port Said Containers & Cargo Holding Company and Damietta Container & Cargo Handling Company.

Tick, tock: The government aims to raise USD 2 bn via asset sales by the end of June. It has so far raised some USD 153 mn by selling off Pachinand a 10% stake in Telecom Egypt.

REMEMBER-Qatar last year pledged to invest as much as USD 5 bn in Egyptian companies as part of wider Gulf efforts to shore up our economy and provide us with vital FX. The country’s sovereign wealth fund last year deposited USD 4 bn at the Central Bank of Egypt while it held negotiations to acquire stakes in major companies. The country’s finance ministry said recently that it remains committed to investing in Egypt but ruled out providing further deposits or grants.

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3

IPO

Taqa Arabia to debut on the Egyptian stock exchange by mid-June -Asharq

Taqa Arabia’s shares will start trading on the EGX in two weeks, Asharq Business reported yesterday, citing sources with knowledge of the matter. The Qalaa Holdings subsidiary is preparing to sell a stake directly to investors in what would be the bourse’s first public share sale this year.

Remember:The EGX this week gave the greenlight for the company to list its shares on the exchange, kickstarting a six-month period during which it has to meet the bourse’s listing requirements and obtain regulatory approvals. The company will submit its fair value report and other documents to the Financial Regulatory Authority (FRA) “within hours,” one of Asharq’s sources reportedly said. Trading will take place under the ticker TAQA.CA.

About the company: Taqa Arabia is one of the country’s leading energy distribution and utility companies, with operations spanning gas transmission and distribution, power, renewable energy and water. The company has EGP 676.2 mn of capital split between 1.352 bn shares with a nominal value of EGP 0.5 each. Qalaa owns about 55% of the company, with the remaining shares split between at least 300 other shareholders, according to Asharq’s sources.

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4

Economy

Egypt’s non-oil private sector contracts at softest pace in 15 months in May

Some positive signs for the private sector as PMI rises for second month running: The contraction in Egypt’s non-oil private sector slowed to its softest pace since February 2022 in May as inflationary pressures eased, according to S&P Global’s purchasing managers’ index(pdf). The country’s PMI rose to 47.8 in May from 47.3 in April, marking a second consecutive month of improvement but remaining below the 50.0 mark that separates growth from contraction. This is the 30th consecutive month that non-oil private-sector activity has been in decline.

Softer price hikes helped the picture: “The Egypt PMI remained in negative territory in May, but showed further promise that current economic headwinds were beginning to dissipate,” said David Owen, senior economist at S&P Global Market Intelligence. “Companies signaled that input cost pressures were again much softer than at the beginning of the year, as a period of stabilization in the EGP versus the USD helped to cool import markets. This led to another relatively soft rise in selling charges, providing some hope that consumer price inflation will fall again in May.”

REMEMBER- Annual urban inflation eased to 30.6% y-o-y in Aprilfrom 32.7% the month before as a result of a favorable base effect, the stabilization of the EGP-USD exchange rate, and a slight slowdown in food price growth. Capmas and the central bank should be out with May’s inflation data on 8 June.

Demand conditions on the up? Output levels continued to decline but at their softest rate since theend of 2021, while new orders dropped at their slowest rate in seven months. Business activity came close to stabilizing in the manufacturing and services sectors. "Positivity in the services economy — where new business intakes rose for the second time in three months – suggests that demand could make further strides towards a recovery in the coming months,” Owen said.

Yes, but:

  • Confidence remained near the all-time low recorded in April, with only 6% of the survey respondents expecting an increase in output over the next 12 months.
  • Employers cut jobs for a sixth consecutive month amid low sales figures and low liquidity to pay employees.
  • The purchasing power of firms continued to decline due to rising input prices and slow demand, resulting in a further depletion of input inventories.

The reading got coverage overseas:Reuters.

FROM THE REGION-

Rapid expansion of Saudi private-sector continues: Saudi Arabia’s PMI (pdf) dropped to 58.5 in May from 59.6 in April but remained in rapid expansion, with firms reporting strong increases in demand, output and employment.

Optimism in UAE reaches 2.5-year high:The UAE’s PMI (pdf) eased to 55.5 in May from 56.6 in April. Business confidence reached its strongest level since October 2021 as strengthening demand and rising employment drove optimism.

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5

M&A WATCH

Elevate Healthcare acquires majority stake in Egypt’s Nile Scan

Elevate Healthcare now owns 70% of Nile Scan: Investment banking outfit Elevate Capital’s Elevate Healthcare fund has acquired a 70% stake in clinical radiology and lab service provider Nile Scan & Labs in a EGP 312 mn transaction, a source close to the matter told Enterprise. Elevate bought shares from some founding partners that were looking to exit “to cash in on the company’s growth,” the source said.

What’s next? Elevate will work on expanding Nile Scan’s “diagnostics and precision medicine” offering through mergers and acquisitions, the source said. The fund will also work on “geographical expansion to cover more governorates.”

About the fund:Launched in 2021, Elevate Healthcare is a partnership between Elevate Private Equity and Misr Capital. The fund is targeting a final close of USD 380 mn, with the aim of investing in verticals spanning hospitals, pharma, medical education and healthtech in Egypt and sub-Saharan Africa.

Nile Scan & Labs: Nile Scan provides radiology and clinical laboratory services and has nine branches in the greater Cairo area and one in Alexandria, according to its website.

Advisors: Commercial International Brokerage Company (CIBC) was the broker on the transaction, while Al Kamel Law Firm was legal counsel.

Also in the pipeline: Elevate is currently in advanced stages on two major transactions, including a brownfield expansion in premium hospital operations in partnership with London’s Guy's and St Thomas' NHS Foundation Trust, our source says.

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6

Investment Watch

Indian firm to build plastics plant in SCZone

Abdos to build USD 30 mn plastics factory in SCZone:Abdos — an Indian firm specializing in the production of plastic lab equipment — inked an agreement to build a plastics factory worth USD 30 mn in Orascom Industrial Parks’ (OIP) Sokhna complex, the Suez Canal Economic Zone (SCZone) said in a statement yesterday.

What we know so far: The planned plastics factory will provide 350 jobs in a first phase that is scheduled to open in 2H 2024.

More to come? SCZone CEO Gamal El Din and SCZone delegation will head to India this month as part of a global tour which has seen SCZone representatives travel to China, Japan, the Netherlands, and Vietnam.

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7

BUDGET WATCH

Egypt’s Senate approves FY 2023-24 development plan

Senate approves FY 2023-24 development plan: The Senate gave final approval to the government’s FY 2023-2024 economic and social development plan in a vote yesterday. The approval came following two days of debates. The plan will now be sent for discussion at the House of Representatives.

In a nutshell: The government’s development plan — drawn up by the Planning Ministry in tandem with the Finance Ministry’s annual budget — aims to draw EGP 1.65 tn in investment, EGP 1.05 tn of which will come from the government and EGP 600 bn from the private-sector. The plan also targets 4.1% GDP growth for the coming fiscal year.

El Said indicates cautious debt policy: The government will only take on soft foreign-currency loans to use for its long-term development objectives, Planning Minister Hala El Said told senators on Sunday. “We as a government are implementing a policy of austerity measures and spending cuts that aim to contain inflation and boost investments,” she said. The Finance Ministry has held talks with several international lenders in recent weeks including Citibank and the New Development Bank about receiving new concessional loans.

Remember: Egypt’s external debt has quadrupled over the past decade, reaching a recordUSD 162.9 bn in 2Q 2022-2023.

And cautious spending: The development plan does not allocate public money towards new development projects in the coming fiscal year, said El Said, adding that only projects that have passed 70% completion will receive investment. New national projects requiring significant FX expenditure or where construction has yet to begin have been on hold since January as the government looks to mitigate the ongoing FX crunch.

** The Senate will now take a two-week break before reconvening on 18 June.

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8

Automotive

Egypt auto council approves proposals to promote EV adoption

Getting EVs off the ground: The Supreme Council for Vehicle Manufacturing yesterday approved in principle two initiatives proposed by local startups ShiftEV and BluEV aimed at accelerating the adoption of electric vehicles in Egypt, cabinet said in a statement yesterday.

Encouraging vehicle owners to convert: ShiftEV wants to convert 100k fuel-powered vehicles — including 80k pickup trucks and 20k minivans — into EVs over five years, and proposed granting incentives to the first 10k vehicles in order to encourage adoption. ShiftEV converts standard petrol-fueled vehicles into EVs using made-in-Egypt lithium-ion battery packs

This is a start: The company signed an agreement with Nestle Egypt to convert the company’s logistics fleet to EVs on Monday, Al Mal reported.

BluEV wants all light EV owners on its platform: Local e-mobility platform BluEV proposed requiring owners of light EVs to create an account on its platform to gain access to its smart batteries network and access its e-pay services. BlueEV is a mobility-as-a-service (MaaS) company that operates a network of lithium-ion battery swapping stations for two- and three-wheeled EVs.

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9

EARNINGS WATCH

CI Capital records a jump in income, revenues during 1Q 2023

CI Capital’s net income after minority interest more than doubled y-o-y to EGP 320 mn during 1Q 2023, the company said in a press release (pdf) yesterday. The financial services firm’s revenues rose 117% y-o-y to EGP 1.6 bn during the quarter.

Growth across the board: Revenues at CI Capital’s investment bank, leasing arm Corplease, and mortgage finance platform CI Mortgage Finance more than doubled y-o-y. Corplease accounted for almost 60% of the firm’s topline, with revenues rising 143% to EGP 946 mn. Each of CI Capital’s NBFS arms saw solid portfolio growth, driving the company’s total on-balance sheet financing portfolio to EGP 19.6 bn, up 45% on 1Q 2022.

CI Capital’s investment bank “posted a stellar performance,” the release read. Revenues saw a 117% y-o-y jump to EGP 274 mn during the quarter, with the bank advising on a number of high-profile transactions. CI Capital Asset Management saw its assets under management quadruple to EGP 56.9 bn while the company’s brokerage posted EGP 152 mn in revenues, up 135% from last year.

What they said: “CI Capital posted yet another record quarter, kicking off the year with a solid set of financial results that reflect the resilience and flexibility of the group’s business model in the face of market challenges. Yet again, CI Capital’s investment bank continued its growth trajectory across all verticals,” said group managing director Hesham Gohar.

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10

Moves

CI Capital appoints Mohamed El Etreby as chairman

CI Capital elected Banque Misr Chairman Mohamed El Etreby (bio) as its new chairman, succeedingMahmoud Attalla (bio), the company said in an EGX disclosure(pdf) yesterday. Attalla was appointed vice chairman and managing director, company CEO Hesham Gohar (LinkedIn) was also reappointed as managing director, and Abdelhamid Amer (LinkedIn) was appointed secretary of the board.

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11

LAST NIGHT’S TALK SHOWS

Record tourist numbers in April top last night's talk shows

It was another mixed night on the nation’s talk shows, with tourism, tax and tuition fees all receiving airtime.

April was a record month for tourism: Tourism Minister Ahmed Eissa’s announcement that a record 1.35 mn tourists visited Egypt in April and his forecast for 15 mn tourists this year was the focus of many programs last night, including Lamees Hadidi’s Kelma Akhira (watch, runtime: 4:11) and Amr Adib’s El Hekaya (watch, runtime: 3:37). Hadidi also hosted tourism investor Hossam El Shaer, who spoke about what the country needs to do to reach its target of receiving 30 mn tourists a year by 2030 (watch, runtime: 11:59).

Will the tuition fee cap rise? International and private schools still have about two months to announce their tuition fees for next year, but the conversation around raising fees has returned to TV screens early. It seems the Education Ministry is sticking with the current 7% cap on tuition fee hikes, according statements made by the ministry’s spokesperson Shadi Zalta on El Hekaya last night (watch, runtime: 5:20 | runtime: 3:04).

Tax was still a topic of conversation: Former international cooperation minister and deputy PM Ziad Bahaa El Din appeared on Ala Mas’ouleety to discuss the recently-passedpackage of tax increases and income tax changes. “Egypt has an urgent need to impose taxes and what the country is witnessing at an economic level requires frankness regarding the reality of the situation,” he told show host Ahmed Moussa (watch, runtime: 38:07).

The Senate’s approval of the government’s new economic and social development plan also attracted interest, with Masa’a DMC (watch, runtime: 38:07), Al Hayah Al Youm (watch, runtime: 8:02) and Ala Mas’ouleety (watch, runtime: 12:54) all giving the news attention.

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12

EGYPT IN THE NEWS

Israel names dead Egyptian soldier + Egypt reopens historic mosque

This morning in the foreign press: The body of the Egyptian soldier who was killed during anexchange of fire at the Egypt-Israel border on Saturday has been returned to Egypt, reports Al Arabiya. The Israeli media released the identity of the 22 year-old from Cairo, whose name is Mohamed Salah Ibrahim. A joint investigation between Israel and Egypt authorities to establish the events of the incident is underway.

Details remain unclear: Israel has said that Salah was responsible for killing the Israeli soldiers while the Egyptian Armed Forces said the officer crossed the border to chase suspected narcotics smugglers.

ALSO- Restoring historic Cairo:Reuters picks up the news that the 13th century Al Zhahir Baybars mosque in North Cairo reopened on Monday following a 13-year, USD 7.68 mn restoration co-funded with Kazakhstan.

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13

Also on our Radar

Madinet Masr announces first project outside of Cairo. PLUS: Raya CX expands in KSA, Weitz medical warehouses

REAL ESTATE-

Madinet Masr goes national: Real estate developer Madinet Masr (FKA Madinet Nasr for Housing and Development) launched its first project outside Cairo, the company said in an EGX disclosure(pdf) on Sunday. The Zahw mixed-use development in Assiut will eventually include nearly 1.3k residential units, CEO Abdallah Salam said in the statement. Its launch comes after the company rebranded to reflect its plan to expand across the country.

DEBT-

The Central Bank of Egypt sold USD 554.1 mn of USD-denominated one-year treasury bills at an average 5.149% yield in an auction yesterday, according to central bank figures. Investors submitted bids worth USD 644.1 mn with yields averaging 5.270%.

That’s 25 bps higher than a month ago: A similar auction in May saw the government sell one-year USD t-bills at a 4.900% yield.

HOSPITALITY-

IHG to manage and operate North Coast hotel: Intercontinental Hotels Group (IHG) has signed an agreement to manage and operate a hotel at Akam Al Rajhi Development’s North Coast development, DOSE, the Tourism Ministry said yesterday.

COMMODITIES-

GASC announces fresh wheat shipment for July: The General Authority for Supply Commodities (GASC) launched an international wheat tender on Monday, with a deadline of Tuesday, according to a statement picked up by Reuters. The shipment will take place between 21-31 July and payment will be funded by the International Islamic Trade Finance Corporation.

INFRASTRUCTURE-

Weitz to establish meds warehouses across Egypt: Orascom Construction subsidiary Weitz is set to build six warehouses for medicines and medical supplies across the country under an agreement it signed with a JV company established by the Sovereign Fund of Egypt (SFE), Unified Procurement Authority, and the Armed Forces Land Projects Authority, cabinet said in a statement yesterday.

CIT-

Raya CX launches third site in KSA: Raya Holding subsidiary Raya Customer Experience has opened a new customer service center in Riyadh as it looks to strengthen its operations in the region, the company said in a statement (pdf) yesterday. The company plans to hire 1.5k Saudis this year, CEO Ahmed Aboulezz said.

Three-year streak: The site marks Raya CX’s third opening in the kingdom following its Riyadh debut in 2022 and its acquisition of Gulf CX in Al Khobar in 2021.

HEALTH-

Universal health ins. system reduces personal health bills: Personal spending on health fell by almost 48% in Port Said following the introduction of a comprehensive health ins. system, according to Health Ministry figures. The National Health Accounts Report, which was released by the ministry on Sunday in partnership with the World Health Organization, reported that personal health expenditure across Egypt has fallen to 59.3% from 62.7%, while government spending has risen to 33% from 28%. Medicine was the greatest state expenditure, Health Minister Khaled Abdel Ghaffar said, with additional focus on basic care and mental health services.

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14

PLANET FINANCE

US regulator sues Binance alleging market manipulation, misuse of funds

US regulators have filed a lawsuit against Binance, the world’s largest crypto exchange,alleging that it commingled client funds and misled investors in what it termed a “web of deception.” The Securities and Exchange Commission filed 13 civil charges against the company, accusing it of manipulating trading volumes, operating unregistered platforms, and misrepresenting trading controls. Binance denied the allegations, writing in a blog post that it had cooperated with the SEC’s investigations and vowed to fight the suit “vigorously.”

The crypto market hasn’t taken this well: BTC, the most traded cryptocurrency, more than 6% to its lowest level since March. Binance’s stablecoin is down almost 9% while Ethereum lost 4.3%.

ALSO WORTH NOTING-

  • US regulators move to shore up banks with new capital requirements: Large US banks could see capital requirements rise by about 20% under plans by regulators to shore up the banking system following the recent failures of a series of mid-sized lenders. (Wall Street Journal)
  • Commercial real estate could be the next flashpoint in the US financial system:Some US lenders are planning to offload commercial real estate loans at a loss amid growing signs of stress in the USD 5.6 tn industry due to rising borrowing costs and slow post-covid demand. (Financial Times)
  • Elon Musk’s brain chip startup more than doubles in value: Recent stock trades have put Elon Musk's brain implant startup Neuralink at a valuation of nearly USD 5 bn — more than double the USD 2 bn in 2021 — despite expectations that it would take Neuralink at least another decade to take its brain implant to market. The company last month received regulatory approval in the US to start testing its technology on humans. (Reuters)

EGX30

17,346

-0.6% (YTD: +18.8%)

USD (CBE)

Buy 30.84

Sell 30.96

USD at CIB

Buy 30.85

Sell 30.95

Interest rates CBE

18.25% deposit

19.25% lending

Tadawul

11,294

+0.6% (YTD: +7.8%)

ADX

9,376

-0.3% (YTD: -8.2%)

DFM

3,653

+1.4% (YTD: +9.5%)

S&P 500

4,274

-0.2% (YTD: +11.3%)

FTSE 100

7,600

-0.1% (YTD: +2.0%)

Euro Stoxx 50

4,293

-0.7% (YTD: +13.2%)

Brent crude

USD 76.46

+0.4%

Natural gas (Nymex)

USD 2.27

+4.5%

Gold

USD 1,977.50

+0.4%

BTC

USD 25,606

-6.1% (YTD: +55.2%)

THE CLOSING BELL-

The EGX30 fell 0.6% at yesterday’s close on turnover of EGP 3.05 bn. Foreign investors were net sellers. The index is up 18.8% YTD.

In the green: Rameda (+4.3%), EFG Holding (+2.7%) and Mopco (+2.5%).

In the red: Ibnsina Pharma (-4.0%), Abu Qir Fertilizers (-3.5%) and Edita (-3.2%).

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15

Diplomacy

El Sisi, African leaders discuss Ukraine peace efforts

President Abdel Fattah El Sisi and five African leaders yesterday discussed a plan to mediate an end to the war in Ukraine ahead of potential meetings with the Russian and Ukrainian presidents later this month, Ittihadiya said yesterday. The leaders of Egypt, South Africa, DR Congo, Senegal, Uganda, and Zambia are planning to travel to Moscow and Kyiv to kickstart a peace process under an initiative announced by South African President Cyril Ramaphosa last month. Jean-Yves Ollivier, an international negotiator who has been working on the initiative for the past six months, told the Associated Press that the talks will likely take place this month. During yesterday’s meeting, El Sisi said that Egypt has sought to remain neutral on the conflict and emphasized the need for the two sides to restart peace talks.

Egypt hosts Hamas, PIJ talks:Leaders of Hamas and Palestinian Islamic Jihad have agreed to strengthen ties during ongoing reconciliation talks mediated by Egyptian officials in Cairo yesterday, Al Arabiya reports, citing Palestinian sources. The delegations also discussed building on the ceasefire with Israel brokered by Egypt last month as well as improving living conditions in the Gaza Strip.

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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
16

Going Green

Enterprise Explains: Egypt’s planned electricity link-ups with Europe

Enterprise Explains: Electricity Interconnectors. Projects to link our power grids to Europe appear to have picked up pace in recent months as the EU steps up its search for new energy sources in response to Russia’s invasion of Ukraine. So how do electricity interconnectors work and why do we have so many planned projects in the pipeline?

Electricity interconnectors are high-voltage direct current cables that carry surplus electricity from one territory to another, allowing countries to share and trade energy. These cables run subsea, underground, or overhead. Because they can draw from renewable energy sources such as wind and solar farms, they offer countries a means to integrate more renewables into their energy markets while achieving energy security.

The war in Ukraine has prompted the EU to wean itself off Russian oil and gas, both as a punitive measure against Moscow and as a safeguard against what it calls a “weaponization” of energy supplies. Prior to the war, the EU secured 40% of its natural gas and 27% of its total oil imports from Russia for roughly EUR 400 bn a year. The European Commission in May 2022 unveiledRePowerEU, an EUR 210 bn plan aimed at eliminating the EU’s reliance on Russian fossil fuels by the end of the decade. The three-piece plan seeks to diversify energy sources, accelere the green transition, and curb energy consumption. In its pursuit of energy security, the EU has also set an electricity interconnection target of at least 15% by 2030, meaning that each EU country needs to have electricity cables that allow at least 15% of the electricity it produces to be transmitted neighboring countries.

This is where Omm El Donia comes into play: Egypt is in close proximity to Europe, has huge potential for solar and wind power generation, and already generates a large surplus of electricity, potentially making it an important partner for the EU. Our grid is currently linked with Jordan, Palestine, Libya, and most recently Sudan, and will link up with Saudi via a 3-GW interconnection in 2025.

There are five proposed Egypt-Europe interconnectors in the pipeline. Below is a rundown of what they are and where they stand:

#1 -The 3-GW link between Egypt and Italy that was proposed by Norwegian renewable energy developer Scatec in February is the latest in the pipeline.The project, which would allow Egypt to export renewable energy to Europe, would be backed financially by the Norwegian government. Cabinet in May approved the signing of an MoU with Scatec to study the project.

#2 - Another 3-GW Egypt-Italy interconnector was proposed by Italy in January. Italy has reportedly proposed signing an MoU to begin conducting a feasibility study for the USD 3.5 bn project. The proposal commits Italy to covering the project’s costs by securing funding from Italian banks and European financing agencies. Egypt and Italy are reportedly in talks to bring a third country into the project to help bridge the distance between the two countries.

#3-The EuroAfrica Interconnector, which Egypt has been planning since 2018,is a USD 4 bn project aimed at linking up the electricity grids of Egypt, Cyprus, and Greece through a 2-GW subsea link. Egypt and Greece are in the process of selecting a consultant to conduct feasibility studies for the interconnector and are expected to sign agreements with a consultant some time in 2H 2023.

#4 - The Greece-Egypt interconnector (GREGY) is a EUR 3.5 bn, 3-GW link that will transmit solely renewable energy generated in Egypt. It will run almost 1.5k km from Wadi El Natroun directly across the Mediterranean to mainland Greece. Bloomberg reported last year that Greek electricity grid operator Admie and the Egyptian Electricity Transmission Company are collaborating on technical design, while Renewable energy player Elica has applied to the EU for funding. Homegrown renewable energy provider Infinity Power and Greek infrastructure investor Coupelouzos in May announced plans to study the development of new renewable energy projects in Egypt to generate electricity for GREGY. Plans for a Greece-Egypt link first surfaced back in 2008, but were shelved following the 2011 revolution.

#5 - The Greece–Africa Power Interconnector (GAP)is a 2-GW link that will transit the Mediterranean between Marsa Matrouh and Crete. US contractor McDermott in February inked an MoU with Greek renewables company Eunice Energy Group to work on the project, which is expected to be completed before 2030.

Your top green economy stories for the week:

  • Local projects finish UK-backed green accelerator: Six green homegrown projects have graduated from the Climate Finance Accelerator, an GBP 11.8 mn technical assistance programme funded by the UK.
  • OIH eyes Uzbekistan renewables sector: Orascom Investment Holding (OIH) is exploring investments in Uzbekistan’s renewables sector as part of a USD 1.2 bn investment plan.
  • Keeping freezones clean: An agreement to regulate the disposal of petroleum waste and used mineral oils in investment and freezones has been signed by the General Authority for Investment and Free Zones (GAIF) and Petrotrade.
  • EnvironMin launches sustainability campaign: The Environment Ministry haslaunched a campaign supporting local communities in nature reserves to maintain sustainable livelihoods as part of World Environment Day.
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CALENDAR

JUNE

June: Suez Canal Economic Zone India roadshow.

June: Egyptian-Saudi business forum.

5-8 June (Monday-Thursday): The International Telecommunication Union’s General Symposium for Regulators, Sharm El Sheikh.

7-10 (Wednesday-Saturday): Africa Health Excon, Egypt International Exhibition Center.

6-8 June (Tuesday-Thursday): Association for Iron and Steel Technology (AIST) MENA, Royal Maxim Palace Kempinski Hotel.

10 June (Saturday): Thanaweya Amma examinations begin.

11 June (Sunday): House reconvenes.

11 June (Sunday): National Dialogue.

12 June - 15 July (Monday-Saturday): Thanaweya Amma exams.

13-14 June (Tuesday-Wednesday): Federal Reserve interest rate meeting.

13 June (Tuesday): National Dialogue.

15 June (Thursday): National Dialogue.

18 June (Sunday): Senate reconvenes.

19-20 June (Monday-Tuesday): The forum for insolvency reforms and corporate restructuring in the Middle East and North Africa.

19-21 June (Monday-Wednesday): Egypt Infrastructure and Water Expo, Egypt International Exhibition Center.

19-21 June (Monday-Wednesday): Big 5 Construct, Egypt International Exhibition Center.

22 June (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

28 June-2 July (Wednesday-Sunday): Eid El Adha (TBC).

30 June (Friday): June 30 Revolution Day.

30 June (Friday): Egypt to exit Grains Trade Convention.

JULY

1 July: House of Representatives deadline to approve the FY 2023-2024 budget.

1 July: GAFI to launch the country’s first integrated electronic platform to facilitate setting up a business.

5 - 6 July (Monday - Tuesday): Gov’t to pay out subsidies to first wave of applicants under its sixth export subsidy program.

15 July (Saturday): Deadline for bids in EGPC’s mature oil fields tender.

18 July (Tuesday): Islamic New Year.

19 - 20 July (Wednesday - Thursday): Gov’t to pay out subsidies to second wave of applicants under its sixth export subsidy program.

20 July (Thursday): National holiday in observance of Islamic New Year (TBC).

23 July (Sunday): Revolution Day.

25-26 July (Tuesday-Wednesday): Federal Reserve interest rate meeting.

27 July (Thursday): National holiday in observance of Revolution Day.

Late July-14 August: 2Q2023 earnings season.

AUGUST

August: Hassan Allam Utilities + Agility to open Yanmu East logistics park.

2 - 3 August (Wednesday - Thursday): Gov’t to pay out subsidies to second wave of applicants under its sixth export subsidy program.

3 August (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

10 August (Thursday): Shalateen Mineral Resources gold mining tender closes.

22-24 August (Tuesday-Thursday): BRICS summit, Johannesburg, South Africa.

SEPTEMBER

September: Sustainable Debt Coalition Initiative agreed at COP27 to launch.

September: IDH to open first branch in Saudi Arabia.

9-10 September (Saturday-Sunday): G20 summit, New Delhi, India.

10-12 September (Sunday-Tuesday): The International Agricultural Exhibition for Africa and the Middle East, Sahara.

15 September (Friday): IMF to review USD 3 bn program.

15 September (Friday): Deadline for FX bureaus to comply with new capital requirements.

19-20 September (Tuesday-Wednesday): Federal Reserve interest rate meeting.

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

21-23 September (Thursday-Saturday): Narrative PR Summit, Somabay.

25 September (Monday): Nasdaq deadline for Swvl Holdings Corp to increase its market value of publicly held shares to a minimum of USD 15 mn.

25-26 September (Monday-Tuesday): Egypt to host the Asian Infrastructure Investment Bank’s annual board meeting, Sharm El Sheikh.

26 September (Tuesday): Prophet Muhammad’s birthday (TBC).

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

OCTOBER

October: Deadline for ins. providers to link their databases with the FRA.

2-5 October (Monday-Thursday): ADIPEC 2023, Abu Dhabi National Exhibition Center.

6 October (Friday): Armed Forces Day.

9-11 October (Monday-Wednesday): Arabs Savings and Financial Literacy Conference, Four Seasons Hotel.

13 October- 20 October (Friday-Friday): The sixth edition of El Gouna Film Festival (GFF).

Late October-14 November: 3Q2023 earnings season.

15-17 October (Sunday-Tuesday): Egypt Automotive Aftermarket Exhibition, Cairo International Convention Center.

26 October (Thursday): Daylight saving time ends.

29-31 October (Sunday-Tuesday): Egypt Energy, Egypt International Exhibition Center.

29 October - 2 November (Sunday- Thursday): Cairo Water Week.

30-31 October (Monday-Tuesday): Intelligent Cities Exhibition and Conference, Dusit Thani LakeView, Cairo.

30-31 October (Monday-Tuesday): Global Business School Network (GBSN), American University of Cairo.

31 October - 1 November (Tuesday-Wednesday): Federal Reserve interest rate meeting.

NOVEMBER

November: Cairo to hostIntra-African Trade Fair.

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

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

15-24 November (Wednesday-Friday): Cairo International Film Festival, Cairo.

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

23 November (Thursday): Worldview Education Fair, Cairo. (Register here)

DECEMBER

10-11 December (Sunday-Monday): eGlobe Expo, St. Regis Almasa Hotel, Cairo.

12-13 December (Tuesday-Wednesday): Federal Reserve interest rate meeting.

12-14 December (Tuesday-Thursday): Food Africa Expo, Egypt International Exhibition Center.

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

EVENTS WITH NO SET DATE

2023: The inauguration of the Grand Egyptian Museum.

Summer 2023: EGX to launch a shariah-compliant index.

1H 2023: GAFI roadshow set to launch to drum up foreign investment for golden licenses

1H 2023: Abu Dhabi Islamic Bank intends to launch a digital consumer finance company

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.

End of 2023: A Developments’ first phase of the Lazoghly development completed.

2024: Standard Chartered Bank to open a branch in Egypt.

November 2024: Egypt to host the 12th session of the World Urban Forum (WUF12).

2Q 2025: Safaga Terminal 2 to initiate operations.

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