The EGP’s rally continues

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WHAT WE’RE TRACKING TODAY

FinMin drafts EGP 9.7 tn consolidated budget

Good morning, wonderful people. We’re heading to the weekend with both a busy issue and a shot of good news:

The EGP continued to strengthen yesterday, breaking below EGP 52 to the greenback at banks including the NBE and Banque Misr (buy rate at 51.97) and CIB (51.95).

(Tap or click here to listen to the 10-minute version of this morning’s issue — Morning Drive is out Sunday-Thursday at 6:15am and is perfect to listen to if you’re in a rush, behind the wheel, or need something to listen to while you suit up for a day at the office.)

The driver? A wave of returning hot money inflows. Some USD 450 mn came in yesterday, bankers we spoke with estimate, bringing the two-day total to just under USD 1.8 bn.

We won’t be out of the woods until the war in the Gulf is over, but this much is clear: Officials do not have their thumb on the scales, and that’s allowing the EGP to do exactly what it’s meant to do — to serve as a shock absorber.

“If inflows continue and there is no further escalation [of the war], the EGP could recover further, potentially pushing the USD toward the EGP 50 level,” one banker told us.

Privatization: A welcome recalibration?

The Madbouly government is cutting its estimate of how much it will net from the sale of state assets through the privatization program. Officials now expect to bring in proceeds of c. USD 4.5 bn in the coming three years, a senior government official tells us — that’s a significant dip from the USD 6 bn target officials had hoped to hit in the upcoming fiscal year alone.

Cabinet sees the privatization process as being about bringing in the private sector, not just the maximizing of receipts, the official reiterated.

Underpromise, overperform: There may be upside to the USD 4.5 bn in three years figure, but this is a welcome recalibration. Spillover from the conflict in the Gulf has sapped investors’ appetite for risk and we need a big, successful IPO (or two) to prime the pump for more listings. Much better that Cabinet signal a realistic outlook than commit to targets that external forces have (for now) made unrealistic.

Banque du Caire and Misr Life are two of the three big privatization sales now on deck, Finance Minister Ahmed Kouchouk told reporters earlier this week. The government continues with administrative procedures to list other assets that could be folded into the program, but we see this as exactly what they are: Early administrative procedures for which officials would like tub-tubs, not meaningful progress.

Budget: No more slush funds

BUDGET WATCH — FinMin is drafting a consolidated general government budget for the third consecutive year in line with an agreement struck with the International Monetary Fund — and we’ve had a sneak peek. General budget expenditures in FY 2026-27 will rise to EGP 9.7 tn from the EGP 8.5 tn expected by the end of the current fiscal year, according to a document seen by EnterpriseAM, while revenues will increase to EGP 8.34 tn from EGP 7.2 tn.

But Enterprise, isn’t a budget just a budget? No, this is the general budget we all know but with financial data from all public economic authorities attached. There are currently 59 public economic authorities across 12 sectors included in the consolidated budget — think of the Grand Egyptian Museum, the Suez Canal Economic Zone (SCZone), or the General Authority for Industrial Development. All of those are public economic authorities, and their revenues are reflected in this consolidated budget. Most of these are established by presidential decree to manage a public utility or provide a public service and have broad powers to manage their own financial and administrative affairs.

Why should you care? Think of the consolidated general budget as a welcome dose of sunshine: It helps curb room for ministries and other authorities to hang onto their ‘personal’ slush funds. The Finance Ministry has for years pushed all arms of the state to return proceeds to the treasury, eliminating room for them to hang on to cash and use them for off-the-books purposes.

It doesn’t stop there: Some arms of the state don’t provide services with the same efficiency as, say, the good folks at the SCZone — and are less capable of generating revenue, which leads them to seek subsidy support or borrow with government backing. That all comes out in the consolidated general budget.

Did PHD just get a piece of Ras El Hekma?

Palm Hills Developments has reportedly reached an agreement with the UAE’s Modon to develop a 2k feddan project in Ras El Hekma. Palm Hills is reportedly hoping to launch sales of the project’s first phase as early as this summer to tap summer interest in the North Coast. We’re poking into the story and will be back with fresh details next week.

No IMF top-up?

The IMF is not currently discussing a top-up of Egypt’s USD 8 bn loan program despite the regional war’s impact on our economy, Reuters reported, citing comments by IMF Managing Director Kristalina ‌Georgieva.

Gov’t eyeing 5% growth target?

Egypt’s economy is expected to grow by a rate ranging between 4.8% and 5% during 3Q of the current fiscal year, Planning Minister Ahmed Rostom said on the sidelines of IMF and World Bank Spring Meetings in Washington. Growth in the 4Q remains contingent on the de-escalation of regional geopolitical tensions, he reportedly said. Should these conditions persist, Q4 growth is projected at 4.5%, bringing the full fiscal year rate to an estimated 4.9% to 5%, Rostom said.

Earlier this week the IMF downgraded Egypt’s GDP forecast to 4.2% in 2026, a 0.5 percentage points decrease from its January projection.

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WEATHER- We are in for another sweltering day in Cairo today, with a high of 37°C and a low of 23°C, according to our favorite weather app.

It’s enviously much cooler in Alexandria, with a high of 26°C and a low of 18°C.

And over the weekend, expect the mercury to fall below 30°C in the capital and below 25°C for our friends on the Mediterranean.

The big story abroad

The US-Iran ceasefire lives another day with no news of a breakthrough. White House officials signaled confidence that a diplomatic resolution is within reach. Talks brokered via Pakistan are “productive and ongoing,” White House press secretary Karoline Leavitt said, but denied reports that Washington formally asked to extend the truce.

Stocks went on a tear yesterday, suggesting traders think that the end of the war is nigh. The S&P 500 closed nearly 1% higher yesterday, hitting a new all-time high as it extended a two-week rally that began just before the current ceasefire came into effect. CNBC has some color here.

And oil steadied in response to unconfirmed reports a ceasefire extension, with Brent crude settling near USD 95.

In less-welcome news: US President Donald Trump renewed his threat to sack Federal Reserve Chair Jay Powell. Trump wants Powell out on 15 May, when his term as Fed chair comes to an end, even if Kevin Warsh — who Trump has named as Powell’s successor — hasn’t been confirmed by Congress by that date. Tradition would have Powell stay on until a success is in place.

Trump also said he’s not going to call off a Justice Department probe of Powell’s renovation of the Fed’s DC headquarters. Folks are also holding their breath to see if Powell steps down from the board when he exits as chair — while his term at the head of the table runs out on 15 May, he isn’t required to leave the board until January 2028.

Also in the US of A: JPMorgan Chase, Goldman Sachs, and Citigroup are all doing largeshare buybacks, as are Bank of America and Morgan Stanley. The biggest US banks have spent a combined USD 33 bn on the buybacks, the FT reports, amid strong 1Q earnings.

Record tax revenues are key to keeping budget deficit in check

Record tax revenues thanks to the widening of the tax base is key to keeping the state budget deficit under control, according an analysis of a budget document seen by EnterpriseAM.

The Finance Ministry is targeting a record EGP 3.5 tn in tax revenues in the FY 2026-2027 budget — a 28% jump from the EGP 2.7 tn projected for the current fiscal year, according to the, which was confirmed by two senior government officials.

The tax target is a central pillar of the state's plan to narrow its total financing gap to EGP 2.7 tn, down from EGP 3.6 tn, supported by stronger revenue performance. The ministry is aiming to raise tax revenues to 14.4% of GDP in the new budget — an increase of over 1% of GDP — equivalent to an additional EGP 745 bn in revenues, compared to EGP 361 bn targeted in the current budget.

BACKGROUND- FinMin is signaling it’s not trying to squeeze blood from a stone. The focus for the upcoming fiscal year is on bringing more taxpayers into the system and not putting “additional tax burdens” on businesses that are already paying their dues, Finance Minister Ahmed Kouchouk told us earlier this week at a press conference.

The push is already gaining traction, with some 31k new applicants joining the simplified tax regime out of a targeted 100k, reflecting improving confidence in the system, our sources noted.

Modest changes to the VAT may be in the works: The government is studying a gradual phase-out of the “Table Tax” (special tax treatments) for several goods, moving them toward the standard 14% VAT rate. “Subjecting these goods to the general rate allows investors to deduct input tax, thereby lowering costs and providing an investment advantage,” one source said.

Customs revenues are expected to rise following tariff revisions aligned with industrial localization efforts, and (as usual) cigarettes may see new price hikes next year, according to sources. Real estate tax revenues are projected to increase to EGP 27 bn following amendments and improved collections, up from EGP 18 bn in the current budget.

What to watch for next: The budget moves next to the House of Representatives for committee-level review.

MetiPro acquisition sees Hassan Allam push deeper into water

Our friends at Hassan Allam Holding have acquired MetiPro, the engineering, procurement, and construction (EPC) arm of UAE’s Metito for an undisclosed amount, according to a statement (pdf) out overnight. The transaction will set up a “scaled, integrated platform” that boosts the firm’s presence in water and wastewater operations across the region, Africa, Eastern Europe, and the Commonwealth of Independent States, the statement said.

Meet MetiPro: Established in 1958, MetiPro — otherwise known as Metito Water Projects — specializes in desalination, wastewater treatment, surface water treatment, water reuse, and industrial solutions, according to its website.

There’s some history here: Hassan Allam Construction and Metito worked together on a contract to upgrade and expand the Alexandria West wastewater treatment plant last year, as well as the Delta Irrigation Water Treatment Plant and other projects in Egypt.

What they said: “By bringing together MetiPro’s global expertise with our 90-year legacy of delivering complex, nation-building projects, we are creating a stronger, integrated platform and built to lead the next generation of sustainable water and wastewater mega-projects across the Middle East and Africa,” Hassan Allam Holding CEO Hassan Allam said.

Stay in your lane

The Egyptian Customs Authority (ECA) is rolling out a risk-based clearance system classifying all incoming cargo into four distinct lanes: green, blue, yellow, and red. The goal? Faster release times with tighter oversight at ports, according to a document seen by EnterpriseAM. The new system will classify shipments based on risk levels and importers based on their compliance records.

Want a spotless record? Get your papers in order — and don’t be a smuggler. Compliance will be measured by the accuracy of invoices, their conformity with the country of origin, the safety of imported goods, and containers void of smuggled, prohibited, or harmful goods threatening health or national security.

Why it matters: The color-coded lanes are part of a broader plan to reduce customs clearance times from the current eight days to two days — and eventually to just a few hours.

Any color you like

The four shipping lane categories include:

Green — very low-risk shipments: Immediate release once requirements are met and duties are paid — and no physical inspection. Pre-payment and advance clearance procedures are allowed, turning ports into transit gateways for compliant importers.

Blue — low-risk shipments: Goods are released with post-clearance audit mechanisms which may include company headquarters or factory visits to verify documentation, while still offering faster processing and reduced costs.

Yellow — medium-risk: Document-based review required prior to release to ensure procedural accuracy, without physical inspection of containers and without unnecessary delays. This will apply to companies with a history of minor violations.

Red — high-risk: A comprehensive inspection and detailed document review required before release, including physical examination and container opening. Higher costs and longer processing times as a result of tighter oversight.

Want to level down? Importers can ask for an upgrade if they keep their noses clean for a documented period.

Importers can also ask to be whitelisted: Customs officials will keep a “white list” of compliant companies with input from a number of other regulatory bodies. Companies included on the list will benefit from preferential treatment, including faster procedures and reduced clearance times.

REMEMBER- Faster clearance = lower cost of goods brought into the country. Importers pay thousands of USD in fees per shipping container brought in, and the cost per unit can go up by as mich as 100% if a container sits occupied in port for more than 11 days waiting for customs clearance, according to traders we spoke with.

Car sales were up 63% in February — and then came the war…

Auto sales jumped 63.3% y-o-y in February to 17.3k units, with total market sales climbing 22.5% m-o-m, according to figures from the Automotive Marketing Information Council (Amic) seen by EnterpriseAM. The February figures reflect none of the impact from the US-Israel war on Iran, which kicked off at month’s end.

The breakdown: Passenger car sales climbed 22.9% m-o-m to 13.4k units, while bus sales rose 56.3% m-o-m to 1.4k units. Truck sales saw a more measured 7.5% m-o-m increase to 2.4k units. On a y-o-y basis, the bus segment more than doubled (up 128.6%), while passenger cars climbed 64.4% and truck sales rose 35.9%.

Behind the surge: Promos offered in connection with the Auto Mobility exhibition earlier February helped stimulate market demand, Amic board member Abdelkader Talaat tells EnterpriseAM. February sales are in line with the normal cyclicality of the industry, Osama Aboul Magd, head of the Egyptian Automotive Dealers Association, adds.

The big question: What will March figures tell us about the impact of the war in the Gulf. Aboul Magd notes that Egyptian consumers have a recurring pattern of buying hard assets like cars and gold during times of crisis to hedge against currency fluctuations. The shift is already visible in early licensing data — which is often a more accurate real-time indicator than Amic’s distributor reports — suggesting that March sales leaped more than 25% compared to January and February, Talaat tells us.

IN CONTEXT- The 63% growth in sales in February reflects the impact of a low base — early 2025 was a notoriously difficult period for the sector thanks to import restrictions as the market adjusted to the impact of the early 2024 float of the EGP, Aboul Magd argues.

Sales of completely built-up imports surged nearly 80% in February, handily outpacing the 30% growth in sales of locally assembled vehicles.

Invia raises USD 1.2 mn and Pullman to make its Egyptian debut

Invia raises USD 1.2 mn

SME finance startup Invia secured USD 1.2 mn from angel investors and strategic backers to expand its financial operating system for SMEs, according to a press release. Founded in 2023 by former Beltone SME executives Yehia Ashour, Ahmed Zeinhom, and Omar Aboulmagd, Invia’s platform automates daily bookkeeping and inventory management through simple inputs like voice notes and text messages. The platform aims to eliminate the need for expensive enterprise resource planning systems for smaller businesses.

Pullman is going to the NAC

Contact Developments has brought in global hospitality player Accor to operate a 150-room Pullman hotel and 100 branded residences in the New Capital, according to a press release (pdf). It’s the first time the Pullman brand will toll-out in Egypt.

Spillover from Gulf war hits China

Spillover from the war in the Gulf, coupled with seasonal distortions, slowed China’s export activity in March, with exports inching up just 2.5% y-o-y — down from a near-40% rise in February, according to General Administration of Customs data. The drop was led by exports to the US, which were down more than 26% y-o-y during the month.

Meanwhile, the trade balance was thrown further out of whack as imports rose at the fastest pace since 2021, increasing 27.8% y-o-y. The rise came on the back of higher purchases of refined oil products, textile yarn, fabric, and copper — all up at double-digit rates — alongside integrated circuits, which surged on AI-related demand.

Higher energy costs from the regional conflict squeezed manufacturer margins and weighed on outbound shipments. Seasonality also weighed, with the later-than-usual Lunar New Year holiday also reducing working days. Also not helping the picture is an unfavorable base effect from the previous year, when manufacturers pushed out eleventh-hour exports ahead of US tariffs coming into effect.

“This unexpectedly weak growth in exports is probably not driven by slowing external demand,” Mizuho Securities’ senior economist Serena Zhou told Bloomberg. The robust performance in high-tech exports and processing imports during the same period indicates that the broader export trend remains solid.

One bright spot in China’s exports story is circuits. Global AI-driven investment fueled a rally in memory chip prices and boosted export growth across Asia, helping to raise China’s circuit exports by 78% y-o-y in 1Q 2026, while high-tech exports jumped by 30%.

A US Supreme Court ruling striking down US President Donald Trump’s tariffs on Chinese imports also eased pressure on Chinese exports. Trump’s decision had pushed duties as high as 145%.

What’s next?

China’s green exports could be in for a boom as oil prices rise: The Iran conflict could support demand for Chinese green exports, including solar panels, with overseas sales of Chinese electric and hybrid vehicles having already doubled in March. These green alternatives are gaining greater appeal since oil prices went up and global supply chains went into chaos during the conflict.

The US blockade of the Strait of Hormuz is expected to lead to an increase in energy and production input costs, decreasing margins for Chinese manufacturers even further. Disrupted shipping routes also risk delaying exports and raising logistics costs, while elevated oil prices could trigger tighter monetary policies and weaken global demand.

MARKETS THIS MORNING-

Asian markets advanced in early trading amid optimism, echoing Wall Street’s gains of yesterday as traders pine for an end to the war in the Gulf — and cheer record bank earnings in New York. Japan’s Nikkei rose c. 2.2% while South Korea’s Kospi advanced 2.1%. Futures suggest Wall Street should open in the green today.

EGX30	50,733	+1.5% (YTD: +21.3%)
USD (CBE)	Buy 51.94	Sell 52.07
USD (CIB)	Buy 51.95	Sell 52.05
Interest rates (CBE)	19.00% deposit	20.00% lending
Tadawul	11,589	+0.9% (YTD: +10.5%)
ADX	9,892	+0.5% (YTD: -1.0%)
DFM	5,866	+2.6% (YTD: -3.0%)
S&P 500	6,967	+1.2% (YTD: +1.8%)
FTSE 100	10,560	-0.5% (YTD: +6.3%)
Euro Stoxx 50	5,940	-0.7% (YTD: +2.5%)
Brent crude	USD 94.93	+0.2%
Natural gas (Nymex)	USD 2.61	0.0%
Gold	USD 4,815	-0.2%
BTC	USD 74,956	+1.2% (YTD: -14.5%)
S&P Egypt Sovereign Bond Index	1,039	+0.6% (YTD: +23.8%)
S&P MENA Bond & Sukuk	151	+0.4% (YTD: +6.7%)
VIX (Volatility Index)	18.17	-1.0% (YTD: +21.5%)

THE CLOSING BELL-

The EGX30 rose 1.50% yesterday on turnover of EGP 9.4 bn (39.0% above the 90-day average). Local investors were sole net buyers. The index is up 21.3% YTD.

In the green: Orascom Development (+6.5%), Palm Hills Developments (+3.9%), and Heliopolis Housing (+3.4%).

In the red: Arabian Cement (-2.0%), Egypt Aluminum (-1.6%), and Qalaa Holdings (-1.0%).

My Morning Routine: Fumio Iwai, Japan’s ambassador to Egypt

Fumio Iwai, Japan’s ambassador to Egypt: Each week, My Morning Routine looks at how a successful member of the community starts their day — and throws in a couple of business and life questions along the way. Speaking to us this week is Japan’s Ambassador to Egypt Fumio Iwai. Edited excerpts from our conversation:

I am an Arabist by training, and Egypt has been a constant throughout my career. I have served as Japan’s Ambassador to Egypt since November 2024 — my third ambassadorial post following Saudi Arabia and Iraq.

I first arrived in Egypt over 40 years ago to study Arabic at the American University in Cairo, where I spent two years under the Center for Arabic Study Abroad program alongside private tutoring. I returned at the turn of the century, and now I am back as ambassador.

My primary mandate is to translate our 2023 strategic partnership into concrete political, economic, and cultural cooperation. A large part of my work focuses on development, particularly in education and healthcare. Japan maintains a presence across every stage of Egypt’s education system — from early childhood to postgraduate studies — alongside flagship projects like the Egypt-Japan University of Science and Technology and our growing network of Egypt-Japan Schools.

I usually wake up at 5:30am. The first thing I do is practice my golf swing at home as part of my daily exercise routine. After breakfast, I commute from my residence in Garden City to the embassy in Maadi, officially beginning my workday around 8:30am.

I start my workday reviewing cables from headquarters and other missions to stay on top of global developments, particularly in the Middle East. This has become essential given the current regional environment. From there, my schedule is typically filled with meetings, briefings, and engagements aimed at strengthening bilateral relations.

One constant in my day is the commute, which I use to read and catch up on the news. My workday rarely ends at the office. I usually leave around 5:00pm, but most evenings are dedicated to official engagements — dinners, receptions, and meetings with Egyptian counterparts and diplomatic colleagues.

On weekends, I make time for golf, which I picked up during a previous posting in Egypt in 1999. To maintain balance, I usually spend both Friday and Saturday mornings on the course, followed by a quieter time reading in the afternoon. I tend to read history, particularly on Japan’s Meiji era and the post-World War II period — both were defining moments in Japan’s modernization.

Looking ahead, I expect to remain in Egypt for another one to two years before retirement. I plan to return to Kyoto and spend more time with my family, especially my grandchildren.

The most meaningful advice I have received is patience. An Iraqi friend once shared a phrase with me: “Do not think glory is a date you can simply eat; you will not reach glory until you taste patience.” That idea — along with “as-sabru miftah al-faraj” — has stayed with me throughout my career.

CALENDAR

2026

APRIL

25 April (Saturday): Sinai Liberation Day.

MAY

1 May (Friday): Labor Day.

21 May (Thursday): Monetary Policy Committee’s third meeting of 2026.

27-29 May (Wednesday-Friday): Eid El Adha (TBC).

JUNE

15 June (Monday): Seventh review of the IMF’s Extended Fund Facility

30 June (Tuesday): National holiday in observance of the June 30 Revolution (TBC).

JULY

9 July (Thursday): Monetary Policy Committee’s fourth meeting of 2026.

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

AUGUST

20 August (Thursday): Monetary Policy Committee’s fifth meeting of 2026.

26 August (Wednesday): National holiday in observance of Prophet Muhammad’s birthday (TBC).

SEPTEMBER

15 September (Tuesday): IMF to hold its eighth review of Egypt’s USD 8 bn EFF arrangement.

24 September (Thursday): Monetary Policy Committee’s sixth meeting of 2026.

27-29 September (Sunday-Tuesday): Global Conference on Population, Health, and Human Development.

OCTOBER

6 October (Tuesday): Armed Forces Day.

29 October (Thursday): Monetary Policy Committee’s seventh meeting of 2026.

DECEMBER

17 December (Thursday): Monetary Policy Committee’s eighth meeting of 2026.

EVENTS WITH NO SET DATE

Early 2026: Passenger operations on the New Administrative Capital-Nasr City monorail scheduled to begin.

1Q 2026: Trial operations for the Ain Sokhna-Sixth of October section of Egypt’s first high-speed rail line scheduled to begin.

May 2026: End of extension for developers on 15% interest rates for land installment payments.

July 2026: British Prime Minister Keir Starmer set to visit Egypt.

2H 2026: Operations at Deli Glass Co’s new USD 70 mn glassware factory kick off.

2026: The Egyptian-American Economic Forum.

2027

20 January-7 February: Egypt to host the African Games.

April 2027: Tenth of Ramadan dry port and logistics hub to begin operations.

EVENTS WITH NO SET DATE

2027: Egypt to host EBRD’s annual meetings.

2027: Egypt-EU Summit 2027.

End of 2027: Trial operations at the Dabaa nuclear power plant expected to take place.

September 2028: First unit of the Dabaa nuclear power plant begins operations.

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