“The EGP’s adjustment is coming close to an end”

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What We're Tracking Today

Egyptian stocks, gold hit record highs on currency fears

We love the smell of optimism in the morning. Yes, there’s a risk that we just let our inner Pollyanna loose.

But still: A little bit of light amid all of the gloom is most welcome. This morning, that takes the form of a research note from EFG Hermes offering a (cautiously optimistic) case for our being in the final stage of our FX crunch.

Also: Multinational lender Standard Chartered is pushing ahead with plans to open here and a Saudi healthcare investor is eyeing a stake in UCP — signs of investor interest in our fair country.

And: Dice’s founders really, really want to buy their company back.

As the SFE’s Ayman Soliman has said over and over again: It’s all about sentiment. There are plenty of people out there (public and private market investors and strategics alike) who believe in the business case for Egypt. What they need is a clear signal that they can commit capital today and not see the value of their investment halved the next day (in USD terms).

Onward:

PSA #1- Foreigners with expired residency permits are being given a little more time to sort everything out: The government has extended the deadline announced in August for foreign residents who have overstayed their residency permits to legalize their stay in the country, according to a cabinet statement. The deadline to settle the USD 1k fine and arrange an Egyptian host has now been pushed back three months to the middle of March, from its initial December deadline.

PSA #2- Fall weather may finally be upon us. Next week could see daytime highs of in the mid-to-high 20s and overnight lows in the mid-teens, according to our favorite weather app, suggesting an end to the unseasonably warm weather may be in the works. Look for a chance of a shower in the early morning hours of Sunday.

PSA #3- University students who want to study in Egypt have until Saturday to register. The government’s university admission portal Study in Egypt has extended the registration deadline for international students wanting to transfer to Egyptian universities from abroad until Saturday, according to a statement (pdf).

INFLATION FIGURES LAND TODAY-

There’s little consensus about what we’re going to find when Capmas and the Central Bank of Egypt publish October’s inflation data later today. Seven analysts we spoke to are split down the middle about what happened, with three forecasting inflation to accelerate to a new record high, three predicting a dip, and one expecting no change.

Remember: Inflation reached an all-time high of 38% in September as the effects of a series of currency devaluations combined with seasonal factors to keep the upward pressure on prices.

What should you expect?

ON ONE HAND- Food inflation to slow on government price curbs? Annual inflation for October will decrease to between 37.1-37.2% due to the government’s initiative to reduce the prices of basic commodities, as well as the customs exemption handed to producers and retailers, said Ahmed Nashy, head of the research department at CFI Financial.

Remember: The government agreed with business leaders during the middle of the month to reduce prices of 10 staple foods by 15-25%.

ON THE OTHER- Currency pressures could weigh on prices: “Inflation may reach 39% or a little more due to the widening gap between the exchange rate of the EGP against the USD in the parallel and official markets and the continued pressure on commodity prices,” said Mostafa Shafie, head of research at Arabeya Online Brokerage.

There’s no consensus among the international press either:

A Reuters poll of 19 analysts forecasts inflation falling to 37.1%
Nine of 10 analysts surveyed by CNBC expect inflation to accelerate by another 0.5-1.5%.

PRESIDENTIAL ELECTION NEWS TODAY-

#2- The National Elections Authority will announce the final list of presidential candidates today. The current list includes: President Abdel Fattah El Sisi; Hazem Omar (Republican People’s Party); Abdel Sanad Yamama (Al Wafd); and Farid Zahran (Egyptian Social Democratic Party).

Remember: The nation goes to the polls on 10-12 December. Egyptian expats will vote 10 days earlier on 1-3 December.

#3- It’s day one of the Intra-African Trade Fair: If business is your game, and Africa your focus, the Intra-African Trade Fair is kicking off at the Egypt International Exhibition Center complex today with a busy schedule that runs all the way until Wednesday.

#4- Shoukry is at the Gaza aid conference in Paris: Foreign Minister Sameh Shoukry is heading an Egyptian delegation to a conference organized by France to coordinate humanitarian aid for the besieged enclave, a statement from the Foreign Ministry. He is also set to deliver a speech on the importance of international efforts in addressing the situation.

EGYPT STOCKS SOAR TO FRESH HIGH-

Egyptian stocks and gold hit fresh record highs yesterday as investors continue to pile into non-EGP assets in response to the prolonged currency uncertainty exacerbated by the war in Gaza.

The EGX: The EGX30 climbed 2.5% during trading yesterday, leaving it just shy of 24k by the end of the session. The benchmark index is up 64% year-to-date in EGP terms.
Gold: The price of 24 carat gold reached EGP 3k for the first time ever yesterday. The price has risen almost 60% since the beginning of the year.

Where it started: Egypt has struggled with a series of currency devaluations and spiraling inflation since the outbreak of war in the Ukraine, forcing people to look to other assets to protect their savings. This set off a rush to the gold and the EGX which has continued to snowball since summer 2022.

Fanning the flames: The combination of a widely anticipated devaluation and concerns about the impact of the war in Gaza have caused the rally to accelerate over the past month. The EGX30 and gold have both climbed more than 20% in the past five weeks alone.

The Madbouly government is trying to put a lid on gold prices: The cabinet yesterday extended customs exemptions designed to encourage Egyptians to bring gold into the country for another six months. The measure will now expire on 10 May 2024.

MORE FALLOUT FROM GAZA-

More on how the war is impacting Egypt and the MENA region:

Will Europe say goodbye to Egyptian gas? Our LNG exports are set to remain “low to zero” this winter, according to an analyst quoted by Reuters. A combination of surging domestic demand and reduced imports of Israeli gas since 7 October has made Egypt’s ambitions to become the main exporter of LNG to Europe “unachievable” in the short and medium term, according to a recent report (pdf) picked up by Reuters.
There’s caution among ins. firms: Several companies offering ins. to large-scale events are excluding Israel, Lebanon, Egypt and Jordan from their cancellation policies after a slew of event call-offs, Reuters reports.

One area of the markets that is no longer being affected by the conflict: Oil prices fell another 2.5% yesterday, slipping to their lowest levels in over three months, Reuters reported, citing concerns over falling demand in the US and China. Brent crude futures fell 2.5% to their lowest since mid-July at USD 79.54 a barrel. Oil has now erased all of last month’s gains stoked by fears about the war’s impact on global energy markets

THE BIG STORIES ABROAD-

It’s a mixed bag in the international press this morning,with US politics, as is often the case, taking center stage. The Wall Street Journal, AP, and the Washington Post are all focused on the Republican presidential debate, which saw DeSantis, Haley, Christie, and who’s who of “who?” take to the stage, while frontrunner Donald Trump is holding a rally nearby. Reuters decided to look into President Joe Biden’s future in office after Tuesday’s off-year elections gave the Biden camp some hope after some worrying polling data the day before. Bloomberg, however, remains focused on the situation in Gaza, especially after the US fired a ‘self-defense strike’ on an Iranian armory located in Syria.

ALSO WORTH NOTING- Over 300k people in Somalia displaced after “worst flooding in decades”: Flooding in Somalia has so far killed at least 29 people and internally displaced some 300k people after heavy rains swept across East Africa on Wednesday, Reuters reported.

CLIMATE WATCH-

A record breaking October (but not in a good way): Last month was the warmest October onrecord with average global temperatures 0.4 degrees Celsius above the previous record in 2019, the EU-funded Copernicus Climate Change Service said in a report. Unless November and December see significantly cooler than average temperatures, 2023 is “virtually certain” to be the hottest year ever recorded, the report added.

HAPPENING NEXT WEEK-

#1- The Arab League is getting together on Saturday for an emergency meeting in Riyadh called for by Palestinian President Mahmoud Abbas. The league’s main goal at the moment is to establish a ceasefire in Gaza, Palestinian presidential advisor Mahmoud Al Habbash previously told AWP.

#2- Followed a day after by the Organization of Islamic Cooperation on Sunday for an extraordinary Islamic in the Saudi capital to “discuss the brutal Israeli aggression against the Palestinian people.” it said in a statement.

CORRECTION- We goofed in the subject line of yesterday’s EnterprisePM. Fighting a tech gremlin that saw us miss our deadline, we were in a rush. The correct subject line was “Superconductor doubts deepen” and not “Semiconductor doubts deepen.”

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Egypt needs USD 8-10 bn to address the FX crunch, says EFG Hermes

We need a foreign currency liquidity buffer of between USD 8-10 bn to get through the FX crunch and go ahead with a successful float in the coming months, according to a note to clients by EFG Hermes lead MENA economist Mohamed Abu Basha seen by Enterprise. Better yet, he thinks it could be within reach.

The rationale: EFG Hermes produced the estimate “after considering current levels of FX backlogs, as well as enough buffers for the [Central Bank of Egypt] to ensure sustained liquidity in the interbank markets for an extended period of time as it ensure the return of confidence back to the market.”

Where the money’s coming from: privatization, debt, state revenues. EFG Hermes is confident that the Madbouly government will raise another USD 1 bn from the sale of state assets over the next three months, taking total proceeds from the privatization program to almost USD 3 bn. Recent debt agreements with the UAE and China have contributed a further USD 2.4 bn, in addition to inflows from revenue-raising measures such as the car import and the military service settlement schemes.

Remember: The government wants to raise another USD 5 bn from its offering program between November and June, and is working on the sale of a number of assets including two military-owned companies, wind farms, and one of the Siemens-built combined-cycle power plants.

With that in mind, Abu Basha sees signs that the “EGP’s adjustment is coming close to an end.” He notes evidence that FX is “accumulating in the economy,” particularly in the form of corporate foreign-currency deposits, which “have risen by USD 5 bn in the 18 months to August, hitting a historic all-time high of USD 17.5 bn.” Add “genuine improvement in CA dynamics … and extended stability of the parallel market rate” from May through mid-October, and it feels likely that we’re reaching a juncture where a resolution could be possible.

So, where does the EGP land against the greenback? “We see the EGP 40 mark as being an eventual area of stability for the EGP when the FX market clears,” Abu Basha wrote.

A credible exchange rate will trigger significant inflows from both investors and folks in Egypt who have USD under their proverbial mattresses. “An EGP closer to the 40-mark would primarily translate into an EGP that is nearly as cheap as it was post the 2016 devaluation … providing an attractive entry point for foreign investors.”It could also see some USD 12-14 bn enter the system as individuals holding USD or trading currency in the parallel market return to safty. Factoring in Egyptian expats, this could increase to USD 20 bn if easing FX liquidity conditions convinces them to bring money into the country.

Now is the time for policymakers to act: “A longer time period opens room for downside risks, as was the case in the past two weeks, with a rally in the parallel market. An elevated FX rate at this stage would not necessarily bode well for debt dynamics, in addition to magnifying inflationary pressures,” Abu Basha wrote.

Standard Chartered to set up shop in Egypt by the end of the year

Standard Chartered will open in Egypt by the end of this year: British multinational lender Standard Chartered Egypt expects to begin operations by the end of 2023, according to a statement from the Planning Ministry yesterday.

ICYMI: Veteran banker and the former head of the bank’s Qatar branch Mohammed Gad was tapped as head of the bank’s Egyptian entity this week.

Standard Chartered Egypt has been in the works for a while: StanChart received its full banking license from the Central Bank of Egypt in November 2022 allowing it to offer services to sovereign and government-related bodies, corporate entities, financial institutions and multinationals working in Egypt, the lender said in a recent statement (pdf).

StanChart is looking at corporate clients: “Sovereign and government related entities, large corporates, financial institutions and multinational companies operating in the country” are the company’s target market, it said.

The lender is no stranger to the region: Out of the 57 countries that the bank has a presence in worldwide, Standard Chartered currently operates in seven countries in the MENA region, accounting for 20% of the bank's total revenue, the bank’s regional chief Sunil Kaushal told the National last month.

Goodbye Lebanon and Jordan, hello Egypt and Saudi Arabia: The bank announced last year its plans to exit seven markets, including Lebanon and Jordan, to focus on bigger and faster-growing markets like Saudi Arabia and Egypt, according to a report by Reuters.

Playing the long game:The bank is confident of long-term growth in Egypt, despite the economic challenges, Kaushal told the National. “It's under [economic] stress … but you know, we're going there for the next 50 to 100 years,” he added.

Saudi health firm could acquire minority stake in Egypt’s UCP this year !_StoryTags_! pharma, United Company of Pharmacists, Tamer Group, Saudi Arabia, investment watch

Saudi conglomerate Tamer Group could acquire30% of Egyptian pharma wholesaler United Company of Pharmacists(UCP) for USD 35 mn before the end of this year, Asharq Business reported, citing sources it says are in the know.

Who’s selling? American wholesale company Cencora (formerly known as AmerisourceBergen) owns 50% of UCP and has already agreed with Tamer Group on the size and value of the sale, according to the news service. The remaining 50% of the company is owned by the family of the founder, Hossam Omar, UCP general manager Mohamed Galal told Enterprise in September.

UCP is seeking much-needed finance to weather its debt crisis: The company, one of the largest pharma distributors in Egypt, has been seeking new finance sources to resolve a growing debt problem, Al Mal reported in September. UCP controls a third of Egypt’s pharma distribution market and supplies 38.5k pharmacies and 2k hospitals, according to the group’s website.

Advisors: JPMorgan is advising Cencora on the transaction, according to Asharq.

Eastern Company hikes cigarette prices by as much as 33%

Some of us have been given yet another reason to quit: State-owned tobacco giant Eastern Company published a new price list for its tobacco products starting today that raises prices between 12% and 33%, according to an EGX disclosure (pdf) from the company.

The new prices came in the wake of a new VAT amendments: The EGX30-listed company raised prices legislators on Monday passed passed into law an EGP 0.50 increase in tax on all tobacco products and allowed companies to raise prices by 12% annually for the next five years without moving into a higher per-pack tax bracket.

Higher prices should increase supply and tackle the black market: Eastern’s new prices and the permission to raise prices over the coming five years should allow manufacturers to confidently increase supply and undercut wholesalers who have been selling cigarettes far above the sticker price. Prices have spiked in recent months as FX shortages and the rising cost of production squeezed supply — and wholesalers and retailers took advantage.

Cabinet thinks this is going to be a money earner: House Planning and Budget Committee head Fakhri El Fiqi said that the tax will raise some EGP 8 bn in the House last month.

DATA POINT: Around 33% of adult males in Egypt smoke, according to CAPMAS figures out earlier this year.

Dice founders up their offer to buy back shares

Dice founders really want to buy back their shares: The founders of the EGX-listed clothingcompany Dice Sports and Casual Wear yesterday upped their offer to buy back shares to EGP 0.80 per share, up 23% from the EGP 0.65 offered previously, according to a statement (pdf) from the Financial Regulatory Authority (FRA) yesterday morning. Their current offer to take back 46.9% of the company through the purchase of 838 mn shares totals up to a EGP 670.5 mn reacquisition bid.

Market reax: Dice shares rose about 14.8% to close at EGP 0.78 following the news.

The Dice reacquisition saga has been going on for a while: The founding family submitted a mandatory tender offer (MTO) last month to re-acquire up to 46.9% of Dice. The transaction would see the family consortium’s stake in the company increase to about 80%. Before this, the consortium first submitted a preliminary offer to up their stake to 90% of Dice in September.

BACKGROUND- The family sold more than half of the company to public investors during its IPO on the EGX in 2017.

Israel-Hamas ceasefire rumors mount as fighting continues in Gaza City; US calls for Palestinian control of Gaza

Gaza City has become a battleground between Israeli and Hamas forces, forcing thousands of civilians to head south in search of safety, Reuters wrote. Hamas said it had inflicted heavy losses on the advancing Israeli troops, who entered the city earlier this week. The Israeli military claimed yesterday that Hamas has “lost control” of northern Gaza and that it had destroyed more than 100 tunnels. Neither of the sides’ claims have been verified and neither has disclosed casualty figures.

PAUSE? The rumor mill over the prospect of a temporary ceasefire “pause” went into overdrive yesterday: A number of conflicting press reports yesterday claimed that a breakthrough in the ongoing hostages-for-temporary-ceasefire negotiations was close, only for the Israeli prime minister to issue a denial.

Al Qahera News said that Egypt is close to negotiating a “humanitarian truce” in return for the release of hostages, citing a number of Egyptian sources. The state broadcaster did not report how many hostages were part of the agreement or the length of the ceasefire.
AFP published comments from a single Hamas source, who claimed that Qatar is trying to broker a three-day ceasefire in return for the release of 12 hostages, half of them Americans.
Reuters published a conflicting single-source report claiming that Qatar-led discussions were focused on a 1-2 day ceasefire in exchange for 10-15 hostages being released.

Israel denies, then amends the denial: Israeli Prime Minister Benjamin Netanyahu called the reports “idle rumors” and reiterated his rejection of a ceasefire without the release of hostages. The IDF spokesman said afterwards that humanitarian pauses may be part of talks but a ceasefire is out of the question.

The G7 wouldn’t mind a pause: G7 foreign ministers stopped short of calling for a temporary humanitarian ceasefire during talks in Japan yesterday, and instead offered “support” for the idea.
There’s a bit more urgency within the aid community: Thirteen international aid organizations urged governments yesterday “to do everything in their power” to force an immediate ceasefire. This came 48 hours after the heads of 18 UN agencies and NGOs issued a similar call.

PUSHBACK? The Biden administration has called for the Palestinian Authority to be handed control of Gaza should Hamas be defeated, reiterating its opposition to Israel reestablishing a long-term security presence after the war. The post-war arrangement “must include Palestinian-led governance and Gaza unified with the West Bank under the Palestinian Authority,” Secretary of State Antony Blinken said yesterday following the G7 talks. Netanyahu said this week that Israel would indefinitely assume “overall security responsibility” for the territory.

AID-US: Rafah border crossing closed due to undisclosed “security circumstance” | Italy is sending ahospital shipto Gaza | The Netherlands wants to send an aid ship to Gaza “when possible” | A UN technical humanitarian team will set up in Arish to facilitate aid and advise the Egyptian Red Crescent.

DIPLO- Paris is hosting an international humanitarian conference for Gaza today | Foreign Minister Sameh Shoukry will be in attendance | A senior US State Department official is coming to Cairo between 10-17 November | Shoukry received a phone call from UN Secretary-General Antonio Guterres.

YESTERDAY IN NUMBERS-

10,515: The number of Gazans who have been killed since 7 October. (Palestinian Health Ministry)
4,324: The number of children who have died in Gaza since the war broke out. (Palestinian Health Ministry)
81: The number of trucks carrying aid crossed the border from Egypt into Gaza yesterday. (Palestinian Red Crescent)
650: The number of trucks that have entered Gaza since 7 October. (Palestinian Red Crescent)
50k: The number of civilians that fled north Gaza yesterday. (AFP)
92: The number of UNRWA staff who have been killed in Gaza since 7 October. (UNRWA)

Elsewedy Electric earnings after minority interest more than doubled in 3Q 2023

Elsewedy Electric had a good quarter: EGX30-listed Elsewedy Electric saw its net profit after minority interest leap 108% y-o-y to EGP2.5 bn in 3Q 2023, according to the company’s earnings release (pdf ) released yesterday. The company’s top line rose 66% y-o-y to EGP 39.2 bn in the quarter.

A strong year so far: The company’s net income saw a 161% y-o-y increase in the first nine months of 2023 to EGP 8.1 bn, while revenues climbed 74% y-o-y to EGP 108.8 bn in the same period.

Wires, cables, and turnkey projects boosted Elsewedy’s sales: Proceeds from the company’s wires and cables segment rose 93% y-o-y in 3Q to EGP 21.7 bn, accounting for 55% of the company’s revenues during the quarter. Meanwhile, proceeds from turnkey projects came in at EGP 13.1 bn, up 33% y-o-y and accounting for 33% of revenues.

What they said: “Increasing sales outside of Egypt and expanding [their] export markets…managing working capital and [their] cost base,” were behind the figures, CEO Ahmed El Sewedy said in the release.

Elsewedy Electric’s CFO and VC steps down

Sherif El Zeiny(LinkedIn) has resigned as CFO and vice chair at Elsewedy Electric effective 14 November, the company said in an EGX disclosure (pdf). The group’s chief internal auditor Ahmed Shokry (LinkedIn) will be the acting vice chair and CFO until the roles are filled, the disclosure read.

Egyptian Food Bank, Mersal + Vodafone provide aid to Gaza

Egyptian NGOs are working overtime to help deliver desperately needed relief to Palestinians in Gaza living under the most brutal assault on a civilian population we’ve seen in this century. Among the organizations who have reached out to us this week:

EFB is sending 2k tons of food to Gaza: The Egyptian Food Bank (EFB) is sending a convoy of 120 trucks loaded with some 2k tons of ready-to-eat food to Gaza, it said in a statement (pdf). The supplies are intended to serve 150k palestinian families, constituting EFB’s largest convoy to date. The NGO has already dispatched a convoy of 41 trucks loaded with 500 tons of food to the besieged territory.

Vodafone + Mersal provide telemedicine services to Gaza: Health charity foundation Mersal is providing free medical consultations and first aid instructions remotely to sick and injured people in Gaza through a partnership with Vodafone, according to a statement (pdf). Patients can get in touch with Mersal through the following platforms:

Social media: Facebook, Instagram
WhatsApp: +20 (0)10 6960 0015 or + 20 (0)10 6960 0045

MEANWHILE- Beltone and Wayana offer workplace training for people with down syndrome: Beltone Financial Holding and Wayana International Foundation have created a training program to equip individuals with down syndrome with workplace skills and knowledge, according to a joint statement (pdf). Financed by Beltone, the “Train to Sustain” program caters to individual training needs, the statement reads.

Presidential hopeful Yamama isn’t a fan of the IMF or Israel

In an unexpected turn of events, talk shows shifted their attention from Gaza to the new cigarette prices, the upcoming presidential elections, and the Metro.

[Redacted] Israel, [redacted] the IMF, says presidential hopeful Yamama: Yahduth Fi Masr’s Sherif Amerhosted presidential candidate Al Wafd’s Abdel Sanad Yamama who gave his two cents on the situation in Israel and the Egyptian economy. “Egypt should not continue to normalize ties with Israel as long as the Gaza issue is still present … I believe that Egypt should withdraw its ambassador to Israel,” he said (watch, runtime: 3:03). On the economy front, Yamama argued that we should cut ties with the IMF and stop all foreign borrowing (watch, runtime: 3:02). The National Elections Authority will announce the final list of presidential candidates later today.

The next phase of Metro Line 3 will start operating no later than January: The third phase of the Metro Line 3 will be fully operational within a month or two, Transport Minister Kamal El Wazir told Ala Maso’uleety’s Ahmed Moussa (watch, runtime: 4:40). The third phase, which runs between Kit Kat and the Ring Road, kicked off trial operations on the sidelines of the TransMEA conference on Sunday.

Good news, bad news. Cigarettes are going to become more widely available but their official prices have increased in wake of the new tobacco VAT, which we have more information on in the news well, above. The cigarette price hike unveiled by the state-owned tobacco giant Eastern Company is “much lower than expected,” Managing Director and CEO Hany Aman told Yahduth Fi Masr’s Sherif Amer (watch, runtime: 5:32), without elaborating.

Gaza coverage continues: Egypt is working to mediate truce negotiations between Hamas and Israel, which would see Hamas release hostages in exchange for a ceasefire. Masa’a DMC hosted an in-studio discussion about the prospects of a pause and what it would mean for Gaza (watch, runtime: 4:15 | 4:33). We have the details in this morning’s War Watch, above.

Aur microfinance arm raises EGP 225 mn from securitization. PLUS: News from cabinet and SODIC

Aur Capital microfinance arm secures EGP 225 mn from securitized bonds:Waseela, the MSMEs financing arm of private equity outfit Aur Capital, has closed a EGP 225 mn securitized bond issuance, according to CI Capital (pdf), which co-led the transaction and provided financial advice. The issuance came in two tranches, both rated P1 by the Middle East Rating and Investors Service (MERIS).

Advisors: CI Capital, Aur Capital, and the Arab African International Bank acted as lead arrangers, issuance managers, and financial advisors. Dreny & Partners provided legal advice, and KPMG was the auditor.

SOLAR-

SODIC contracts for Africa’s largest residential solar project:Our friends at SODIC have partnered with solar panels manufacturer Electro-Mechanical for Energy (EME) to install 400 rooftop solar panels at its West Cairo compound Vye, the upmarket real estate developer said in a press release (pdf ) on Tuesday. The panels are expected to generate around 2 MW of clean energy at peak, saving some 3.5 gigawatt hours of power and reducing 1.6k tons of CO2 emissions annually — the equivalent of planting some 35k trees. The Vye project includes detached, solar-powered villas and is the first of three compounds on a 464-acre development in New Zayed. The first lot of Vye villas went to market in 2020 and were sold out within two days.

CABINET WATCH-

At yesterday’s cabinet meeting, ministers gave the green light to:

Golden license for a new railway factory: The National Egyptian Railway Industries Company (NERIC) has been handed a golden license to build a factory that builds railway components for the metro, express trains and trams in East Port Said in the SCZone. NERIC is a public-private company established in 2020 to localize rail manufacturing.
The military will produce zero-silica products in the SCZone: The Egyptian-Italian Company for Sustainable Technological Industries, a company owned by the National Services Products Organization, will set up a factory in Ain Sokhna to produce eco-friendly bioquartz and zero-silica panels. The company will export at least 80% of annual output, and its materials must be 90% locally-sourced.
Rent-to-own housing: The government will pilot a rent-to-own social housing scheme.
The SCA wants to make boats: The Suez Canal Authority will set up a new boat company that will assemble and export yachts and marine units.

Saudi Arabia rack up five of six of the region’s IPOs in 3Q 2023

KSA is leading the region’s IPO market: Five of the six IPOs in the region in 3Q 2023 were in Saudi Arabia, according to a report (pdf) by Ernst & Young (EY) released on Tuesday. All together, the IPOs have raised USD 330 mn, including Saudi rental car firm Lumi that raised USD 290 mn in its September IPO.

That’s just the start, say Saudi companies: There are currently 27 companies that have announced their intention to list their companies on the Tadawul. Saudi has also already seen three listings in 4Q 2023, including an IPO by regional oil and gas giant ADES holding, whose shares leapt 30% in the first day of trading.

The region clocked in 29 IPOs by the end of 3Q, but we’re still behind on the same period last year: In the first nine months of the year, a total of 29 IPOs have raised some USD 5.6 bn, down 61% from the same period last year. However, investor confidence is strong according to EY strategy and transactions leader Brad Watson, who pointed to 21 out of the 29 IPOs in 3Q 2023 ending with a “gain in share price performance since listing.”

EGX30	23,987	+2.5% (YTD: +64.3%)
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	10,929	-0.2% (YTD: +4.3%)
ADX	9,546	-0.1% (YTD: -6.5%)
DFM	3,965	-0.6% (YTD: +18.9%)
S&P 500	4,383	+0.1% (YTD: +14.2%)
FTSE 100	7,402	-0.1% (YTD: -0.7%)
Euro Stoxx 50	4,178	+0.6% (YTD: +10.2%)
Brent crude	USD 79.54	-2.5%
Natural gas (Nymex)	USD 3.11	-1.1%
Gold	USD 1,957.80	-0.8%
BTC	USD 35,854	+1.5% (YTD: +117%)

THE CLOSING BELL-

The EGX30 rose 2.5% at yesterday’s close on turnover of EGP 4.1 bn (64.4% above the 90-day average). Local investors were net sellers. The index is up 64.3% YTD.

In the green: Credit Agricole (+7.1%), CIB (+6.9%) and ADIB (+5.9%).

In the red: Orascom Construction (-2.9%), Fawry (-2.7%), and Palm Hills Development (-2.6%).

My Morning Routine: Mohanad Adly, CEO of Spinneys Egypt

Mohanad Adly, CEO of Spinneys Egypt: Each week, My Morning Routine looks at how a successful member of the community starts their day — and then throws in a couple of random business questions just for fun. Speaking to us this week is Mohanad Adly (LinkedIn), the CEO of Spinneys Egypt. Edited excerpts from our conversation:

I am first and foremost a family man, a father to four beautiful kids — two boys and two girls. Professionally, I’m a retailer. I’ve been in the grocery retail business for over 20 years now. I’m currently the CEO of Spinneys Egypt, which is one of the leading hypermarket and supermarket operators in the Egyptian market. I also serve on the boards of a couple of companies: The local arm of Alamar Foods — which has the franchise rights of Dunkin Donuts and Domino's Pizza across the region — and Banque Misr’s Misr Capital Investment Fund.

I wake up around 8am and spend a couple of hours at home before I head off to work.First thing I do is take a couple of minutes to go through our trading performance report — a very brief summary of how our stores fared the day before in terms of sales, customer numbers, and basket size. Then I jump straight to EnterpriseAM, which I think is a fantastic way to keep up with business and economic news. I’m all about a wholesome breakfast. Unlike almost everyone I know, I can’t do with just coffee and a sandwich. I have a big breakfast every day, often while doing some more reading.

I do a considerable amount of work at home before I leave for the office, including responding to emails and making calls.

As the saying goes, life is what happens while you're busy making other plans. I studied political science and philosophy back in uni with the goal of joining the United Nations. I applied there when I graduated, but before I heard back, I ended up working in marketing as a favor to one of my friends. He was collecting CVs at the request of his boss, and I agreed to give him mine because I believed I wouldn’t get chosen for the job. As luck would have it, I landed the job and decided to take it as a way to fill time while I waited on the UN’s response. The rest is history — I haven’t left the business field since.

I started my retail career at Metro,which I joined as marketing and purchasing director at 26 before getting promoted a year later to managing director. Because of my early success there, I received plenty of job offers from other retail companies looking to establish and expand their footprint in the market. I joined Azadea Group — which has the franchise rights for a number of fashion brands like Zara, Massimo Dutti, and Bershka — for almost a year and half as country manager. I was then approached by the Spinneys board, which convinced me to move back to grocery retail as CEO. Together with my amazing team, we managed to grow the company from only three stores back in 2014 to its current 25 stores with a multi-bn EGP annual turnover. We have very ambitious plans for further expansion in the market.

I dedicate one day of the workweek to market visits. During that day, I either visit our stores or evaluate new sites for prospective stores. It’s very important for me to engage with the workers at our stores and listen first-hand to feedback from customers. This kind of engagement is how we are able to make things better for our staff and customers, and it’s the culture I try to promote across the company.

I’ve been writing monthly economic articles for Al Ahram and Akhbar Al Youm since 2016. I did a couple of interviews with Al Ahram back then that were received very positively and got lots of reads, so they asked me if I’d like to share more insights in writing. My stories are all related to my field and business in general. I mostly write about the obstacles faced by investors in Egypt and how we can create a more investment-friendly business environment.

My late father used to give me the best advice because it was always tailor-made for me, taking into account my individual weaknesses. One of the most valuable things he taught me is patience, which was one of his greatest virtues. When I was a kid, we often used to go fishing together and we’d wait hours on end to catch something.

Work-life balance becomes more and more important as you grow older. It’s ok to be more career-oriented early on in your professional life, but once you start a family of your own, it’s important to try and spend as much quality time as you can with your children. At this point in life, they are the main reason I’m eager to succeed in my career. I work to provide for my family and to set a good example for my kids, but it’s equally important for me to look after them and witness important milestones as they grow up.

I try to get home from work at least a couple of hours before my kids go to bed so I can spend some quality time with the family. After that, I workout with my gym buddies. It’s the best way to de-stress after a long day at work. I’ve been working out every day since I was a teenager. After I hit 40, my goal at the gym has been to stay fit while remaining injury-free. I’m now focused more on cardio training and less on muscle building.

CALENDAR

NOVEMBER

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

12 November (Sunday): House of Representatives to reconvene.

12 November (Sunday): Deadline for technical and financial offers for Misr Aluminium Company rehabilitation project (extended from 12 October)

12 November (Sunday): Real Estate Debate 2023, InterContinental Cairo Semiramis.

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

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

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

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

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

22 November (Wednesday): Deadline to apply to FRA for credit rating license.

22 November (Wednesday): The EGY-GCC Business Forum opening session.

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

30 November-12 December (Thursday-Tuesday): COP28, Dubai.

Signposted to happen some time in November:

Bidding deadline for 5 gold mine concessions in the Eastern Desert (TBC).

DECEMBER

1-3 December (Friday-Sunday): Egyptian expats vote in the presidential election.

4-7 December (Monday-Thursday): Egypt Defence Expo, Egypt International Exhibition Center.

9-15 December (Saturday-Friday) :The Engineering Export Council of Egypt’strade mission to Saudi Arabia.

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

10-12 December (Sunday-Tuesday): Voting in presidential election takes place in Egypt.

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

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

20 December (Wednesday): End of sugar export ban.

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

Signposted to happen sometime in December:

Gov’t expects to finalize sale of a stake in military-owned bottled drinks company Safi
Gov’t expects to finalize stake sale for military-owned fuel retailer Wataniya.
Gov’t expects to finalize sale of Zafarana wind farm
Kenyan trade conference in Egypt.

EVENTS WITH NO SET DATE

2023: The inauguration of the Grand Egyptian Museum.

2H 2023: Egyptian government expected to sign agreements with a consultant for the EuroAfrica electricity interconnector.

2H 2023: President Abdel Fattah El Sisi and Turkish President Recep Tayyip Erdogan expected to hold a summit.

3Q 2023: E-Finance to launch in Saudi Arabia.

4Q 2023: EGX to launch its new futures exchange.

4Q 2023: EGX to launch a shariah-compliant index.

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

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

25 February 2024 (Sunday): Deadline for bidders for oil and gas expansion in the 23 new regions.

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

June 2024: Gov’t expects to finalize sale of Beni Suef combined-cycle power plant.

1H 2024: Gov’t expects to finalize sale of four water desalination plants.

2H 2024: Gov’t to launch the Cairo Ring Road BRT buses.

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

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

2Q 2025: Safaga Terminal 2 to start operations.

2024

JANUARY

7 January (Sunday): Coptic Christmas.

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

25 January (Thursday): Revolution day.

FEBRUARY

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

APRIL

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

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

MAY

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

5 May (Sunday): Coptic Easter.

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

29 May (Wednesday): Chicago Booth Executive Program

JUNE

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

30 June (Sunday): June 30 Revolution Day.

JULY

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

23 July (Tuesday): Revolution Day.

SEPTEMBER

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

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

OCTOBER

6 October (Sunday): Armed Forces Day.

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