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Wednesday, 6 Nov 2024

What We’re Tracking Today
Economy
Economy
Investment Watch
A Message From Auc School Of Business Executive Education
Egypt In The News
Also On Our Radar
Planet Finance
Hardhat
Calendar

The fourth review of Egypt’s IMF loan program is well underway

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Today at a glance

1

ECONOMY

IMF begins its fourth review of Egypt’s USD 8 bn program.
2

ECONOMY

Egypt’s non-oil private sector activity continues to contract on the back of rising price pressures.
3

ALSO ON OUR RADAR

Eastern Company hikes cigarette prices for the fourth time this year.
4

INVESTMENT WATCH

Kemet Data Center secures land under usufruct agreement.
5

WHAT WE’RE TRACKING TODAY

Egypt eyes USD 4 bn in renewable investments next year.
6

WHAT WE’RE TRACKING TODAY

It’s Election Day in the US.
7

EGYPT IN THE NEWS

Foreign Minister Badr Abdelatty calls for renewed two-state solution.
8

PLANET FINANCE

Investors watch equities, bonds, and crypto as US election unfolds.
9

HARDHAT

Algammal for Contracting to set up three industrial complexes in Saudi Arabia, Libya, and Iraq.

Wednesday, 6 Nov 2024

What We’re Tracking Today
Economy
Economy
Investment Watch
A Message From Auc School Of Business Executive Education
Egypt In The News
Also On Our Radar
Planet Finance
Hardhat
Calendar
1

WHAT WE’RE TRACKING TODAY

Egypt wants to attract USD 4 bn in renewable investments next year

Good morning, all. We have a busy issue for you this morning as we sit tight awaiting the results of the US presidential race.

WATCH THIS SPACE-

#1- Egypt eyes USD 4 bn in renewable investments next year: The Madbouly government is looking to attract some USD 4 bn in foreign investments in the country’s renewable energy sector next year, Al Arabiya reports, citing unnamed government sources. The government’s plan has been presented to firms from countries that include Japan, France, China, Germany, Italy, Spain, and the US, with meetings set to take place with company representatives before year-end, the publication reports.

The gov’t is keen on private sector-led investment in the sector: Sources at the Electricity Ministry previously told EnterpriseAM that expanding the country’s renewable energy profile and encouraging private sector investment in the sector is at the top of its list of priorities for the coming period. The government sees renewable energy making up 18.6% of Egypt’s total energy mix by FY 2026-27, up from 11.5% during the past fiscal year.

#2- SCZone plans USD 3 bn infrastructure investment: The Suez Canal Economic Zone (SCZone) plans to invest USD 3 bn on infrastructure projects over the coming few years as it looks to attract investors, SCZone head Walid Gamal El Din told Al Arabiya. The investment will mirror the USD 3 bn invested over the past few years.

Among the new projects: A desalination plant: The authority is developing a new desalination facility in AIn Sokhna dedicated to shared utilities for green hydrogen project, Gamal El Din said. The first phase of the project will produce around 250k cubic meters per day. The authority will soon launch a tender for the project and construction should take 2-4 years.

IN THE HOUSE-

#1- MPs approve amendments to tax dispute resolution: The House of Representatives approved a government-drafted bill to extend the window for settling tax disputes until 30 June 2025, with Parliamentary Affairs Minister Mahmoud Fawzy adding that the government could extend the deadline further if necessary. The law will now head to President Abdel Fattah El Sisi for ratification.

#2- Kouchouk outlines Finance Ministry priorities: Finance Minister Ahmed Kouchouk presented his ministry’s priorities until 2030 to MPs, including building trust between the Tax Authority and business community, enforcing fiscal discipline, reducing the public debt — pushing the debt-to-GDP ratio to 85% this fiscal year — and supporting the social safety net.

Cleaner drive ahead? Kouchouk also told MPs that the government is currently looking into a new initiative that aims to replace gasoline-fired car engines with electric motors or dual-fuel engines that primarily use natural gas.

#3- Preliminary approval of the draft Criminal Procedures Law has been delayed to allow more MPs to discuss and contribute to the bill. The House will reconvene on 17 November to continue discussions.

HAPPENING TODAY-

It’s day three of the World Urban Forum: The UN’s World Urban Forum — which kicked off Monday and will run until Friday in Cairo — is entering its third day today, with the Egyptian government co-sponsored event featuring discussions and workshops aimed at reshaping urban policies and fostering sustainable, inclusive cities for the future. Check out today’s agenda via the link available on the event’s official website.

Day two of the forum saw Planning, Economic Development, and International Cooperation Minister Rania Al Mashat discussing Egyptian-German cooperation with parliamentary state secretary for Germany’s Economic Cooperation and Development Ministry Niels Annen during the inauguration of Germany’s pavilion, according to a ministry statement. The two sides are scheduled to meet at the end of November in Berlin to identify priority projects for fiscal years 2024-26.

PSA-

WEATHER- It’s another cool day in Cairo, with a high of 26°C and a low of 18°C, according to our favorite weather app.

It’s almost as cold in Alexandria, with a high of 25°C and a low of 20°C.

** DID YOU KNOW that we now cover Saudi Arabia and the UAE?

** Were you forwarded this email? Tap or click here to get your own copy delivered every weekday before 7am Cairo time — without charge.

DEBT WATCH-

CBE sells more than EUR 600 mn in t-bills in oversubscribed issuance: The Central Bank of Egypt sold EUR 642.8 mn in one-year EUR-denominated t-bills in an auction yesterday at an average yield of 3.5%, according to its website. The EUR 600 mn issuance was over 1.5x oversubscribed, receiving a total of 28 bids worth EUR 922.8 mn. The issuance is set to replace EUR 657 mn in maturing one-year bills with an average yield of 4%.

HAPPENING TOMORROW-

Gov’t to launch the National Decentralization Strategy on Thursday: The Madbouly government is set to announce its National Decentralization and Local Administration Enhancement Strategy tomorrow, Al Borsa quotes Deputy Local Development Minister Hisham El Helbawy as saying. The deputy minister’s comments came during a session on local governance at the World Urban Forum on Monday.

Three pillars to empower local gov’t: The strategy will focus on strengthening local and urban development, fostering private sector partnerships, and ensuring the fair distribution of financial resources, with El Helbawy expressing hope that the measures will empower local administrations to act as a bridge between citizens and the state, ultimately pushing forward innovative solutions to development problems.

CIRCLE YOUR CALENDAR-

Turkish auto and construction delegations to visit Egypt: Turkey’s AutomotiveManufacturers Association and the Turkish Contractors Association will visit Egypt in 1Q 2025 following an invitation from Investment Minister Hassan El Khatib, during his visit to Turkey this week, according to a ministry statement.

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

THE BIG STORY ABROAD-

No surprises here: Election Day in the US is fully dominating news coverage in the international press this morning, as polls close and the ballot counting continues. The counting is likely to take several days, particularly as this year’s elections are closely contested and several states are “too close to call” and likely to hinge on the results from the country’s seven swing states — Georgia, North Carolina, Pennsylvania, Arizona, Michigan, Nevada, and Wisconsin.

What we know so far: Donald Trump is so far in the lead, with victories in Texas and Florida — each of which have a large number of electoral votes — as well as a smattering of other states. Kamala Harris has secured a victory so far in Washington, D.C., Vermont, and Massachusetts, among others. Trump is looking likely to secure the overall vote, although Harris still has a path to victory if she manages to come out on top in Pennsylvania, Michigan, and Wisconsin. Meanwhile in the Senate, the Republican Party has so far gained a seat and is closing in on a majority.

You can check out live results from the Associated Press, Reuters, the New York Times, the Wall Street Journal. The Financial Times and Bloomberg also have coverage.

IN NON-ELECTION NEWS- Israeli Prime Minister Benjamin Netanyahu fired Defense Minister Yoav Gallant and appointed Israel Katz — who was foreign minister — in his stead. Gideon Saar is now Israel’s foreign minister in Katz’s place. Netanyahu’s decision to fire Gallant — a move he was reportedly considering for weeks — is due to the two disagreeing on critical issues, including Gallant supporting a ceasefire and hostage release agreement with Hamas in Gaza. The former defense minister was also pressing for an investigation into the country’s security failures in Hamas’ 7 October attack, and opposes a law that would allow ultra-Orthodox Jews to be exempt from mandatory military service. Reuters, the Financial Times, Axios, and Bloomberg have the story.

*** It’s Hardhat day — your weekly briefing of all things infrastructure in Egypt: Enterprise’s industry vertical focuses each Wednesday on infrastructure, covering everything from energy, water, transportation, and urban development, as well as social infrastructure such as health and education.

In today’s issue: We talk to Algammal for Contracting Vice President Mohamed Farouk Hafeez to learn more about the company’s plans to set up three industrial complexes in Saudi Arabia, Libya, and Iraq.

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Discover the essence of paradise at Somabay: Join us at the World Travel Market in London, Stand #S12-200 from November 5-7, 2024.

Let’s connect and explore the experiences that make Somabay a world class destination. From pristine beaches to exhilarating sports, we can’t wait to share the beauty of Somabay with you.

2

ECONOMY

IMF begins its fourth review of Egypt’s USD 8 bn program

IMF kicks off its fourth review of the country’s loan program: An International Monetary Fund mission has begun its long-awaited fourth review of Egypt’s USD 8 bn loan program, which if successfully completed would unlock USD 1.3 bn in funds — the biggest of the four tranches Egypt has received from the program to date, a high-ranking government official told EnterpriseAM.

(Tap or click the headline above to read this story with all of the links to our background as well as external sources.)

ICYMI- The Fund completed its third review of the country’s loan program in late July and the USD 820 mn tranche landed in state coffers just days later.

What’s on the agenda? The Fund will conduct visits to the ministries involved in the implementation of the program to assess progress made on the financial and economic fronts, as well as its social impact. Exchange rate flexibility will be discussed with the Central Bank of Egypt, with social protection efforts also on the Fund’s agenda, the source said.

The EGP’s stability in the face of regional tension has raised questions: Investors have reportedly been pressing the IMF for an explanation regarding the EGP’s stability amid regional shocks and in light of Egypt’s pledges to maintain a flexible exchange rate.

It has been a tough week for the EGP, which started the week at 49.03 against the greenback and is now going for 49.21, according to the central bank’s exchange rate.

The review and talks to adjust the program are likely to proceed separately: The fourth review is likely to be separate from talks that aim to revise the timeline and targets of reforms previously agreed upon with the Fund, another informed source told us. The IMF will, however, consider requests to change timelines and targets as the review takes place over the next two weeks.

Remember: President Abdel Fattah El Sisi last month stated that the country might need to revisit the IMF agreement in light of the economic pressures the country is facing as it undergoes agreed-upon reforms. The IMF has expressed willingness to revisit the terms of the agreement, with IMF managing director Kristalina Georgieva saying last week that the Fund has “been very open to adjust the Egyptian program or any other program to what is best to serve people.”

The priorities for the review: Georgieva mentioned during a presser attended by EnterpriseAM this week the main areas that will be subject to discussions during the review, including helping Egypt achieve greater economic stability and lower inflation, increasing private sector growth, and supporting Egyptian objectives in the green economy.

There’s already been a considerable shift in policy: There’s an ongoing transformation in how officials are managing fiscal and monetary policy, one source told us, adding that it has reorganized its spending priorities and its management of public debt — especially domestic debt — amid the significant challenges posed by high interest rates. The public debt strategy has consequently undergone comprehensive changes since the beginning of the current fiscal year, leading to significantly reduced debt service payments, the source said.

Remember:Egypt’s debt service bill dipped (5.4% y-o-y in 1Q 2024-25, contributing to a decline in the budget deficit.

Giving improved tax collection its fair due: The new debt strategy has been supported by the government’s digital transformation and automation efforts, which have collectively boosted tax revenues, the source added.

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3

ECONOMY

Egypt’s non-oil private sector activity continues to contract on the back of rising price pressures

On the up, but still in the red: Egypt’s non-oil private sector activity contracted for the second consecutive month in October, S&P Global’s most recent PurchasingManagersIndex (PMI) (pdf) report showed. The decline was driven by rising price pressures — driven by higher costs of raw materials and utilities — that dampened new order volumes across the board.

(Tap or click the headline above to read this story with all of the links to our background as well as external sources.)

By the numbers: October’s index reading rose to 49.0 from the previous month’s 48.8, leaving us just below the 50.0 mark that separates growth from contraction. This marks our second month in the red since August’s reading of 50.4 — the first time our PMI reading had broached the threshold into growth since November 2020.

A stronger USD and high input prices drove the fall: Rising costs of imported inputs drove the trend, according to the report, with a stronger USD highlighted as the main culprit. However, input cost inflation rose at a slower pace than September’s six-month high and at the slowest pace since July — a possible indication that we might soon see the tail-end of input cost inflation.

A drop across the board — with construction taking the biggest hit: Surveyed companies reported overall declining sales due to weak market conditions and higher prices, with construction firms seeing the largest drop in activity and sales.

On a more positive note, hiring was up: Despite the contraction in overall business activity, employment rose for the fourth straight month, with job creation growing at its fastest rate since May. Total input purchases also fell for the first time since August, easing pressures on supply chains.

A positive outlook, with confidence concerns: Non-oil private sector activity is expected to increase in the coming 12 months, with S&P Global Market Intelligence senior economist David Owen noting that “with the PMI at 49.0 points in October, Egypt’s non-oil economy is not too far from growing again.” That being said, businesses are not confident about the year ahead, with the report saying that the relevant index had dropped to “one of its lowest readings in the survey’s history.”

ELSEWHERE IN THE REGION-

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4

INVESTMENT WATCH

Kemet Data Center secures land under usufruct agreement

SCZone inks land usufruct agreement for Kemet Data Center: The Suez Canal Economic Zone (SCZone) signed a land usufruct agreement with Intro Group that gives it access to a plot in the Sokhna Industrial Zone to set up the USD 450 mn Kemet Data Center, according to a cabinet statement.

(Tap or click the headline above to read this story with all of the links to our background as well as external sources.)

Fresh details emerge: During a meeting withPrime Minister Moustafa Madbouly, Intro Group representatives said that the project will be expanded to include four phases each with a capacity of 20 MW, pushing its price tag at USD 1 bn.

And we have a completion date: The project is expected to be fully completed by the end of 2030, Madbouly said.

An export-oriented center: The project will target exporting cloud solutions and digital services to markets abroad, specifically in the Middle East and Africa.

Opening the door for more data centers: Madbouly noted that Egypt remains interested in attracting greater investment in data centers through simpler procedures, more incentives, and a better-equipped workforce

REFRESHER- We first heard about the big-ticket project back in September, after Intro Technology signed a MoU with Omani data center leader Oman Data Park to establish the Kemet Data Center on 80k sqm in the SCZone. The partially solar-powered center will serve large companies looking for cost-effective and advanced cloud solutions, Internet of Things (IoT), and digital transformation.

Also onboard: Data center engineering leader Sterling and Wilson Data Center will act as theproject’s EPC contractor, overseeing design, budgeting, timeline management, and systems testing and accreditation. The firm will also maintain the facility for 3-5 years after the project’s completion.

MANUFACTURING HONEYWELL LIGHTING PRODUCTS LOCALLY-

Siraj Lightning to manufacture Honeywell Lighting products locally: Egypt’s SirajLighting signed a USD 15 mn agreement with electric lighting equipment manufacturer Vesra — a Honeywell authorized licensee — to produce Honeywell lighting products in its factory in the the Suez Canal Economic Zone (SCZone), according to a cabinet statement.

The details: Siraj will be producing indoor and outdoor lighting for use in commercial, residential, and industrial settings, with plans to export 30% of output during the first phase of the project.

Lowering the import bill: The project will create new jobs, foster economic growth, and increase exports, Prime Minister Moustafa Madbouly said at the agreement’s signing.

** Earlier this week we ran an Inside Industry on Egypt’s efforts to localize 152 industries by 2030 through offering support for factories and improving the technical capabilities of industry.

TWO TURKISH COMPANIES LOOKING TO SET UP SHOP IN EGYPT-

USD 360 mn worth of Turkish investments? One Turkish ready-made garments maker is looking to invest USD 160 mn to set up a factory in the Tenth of Ramadan and another is looking to set up a USD 200 mn furniture factory in Damietta’s freezone, according to a statement. This came during Investment Minister Hassan El Khatib visit to Turkey aimed at boosting trade and investment relations between the two nations.

That’s not all: A Turkish retail player told Al Khatib that it is looking to expand its Egyptian footprint, setting up an additional 600 branches on top of its already existing 400.

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5

A MESSAGE FROM AUC SCHOOL OF BUSINESS EXECUTIVE EDUCATION

AUC School of Business and Afreximbank join forces to boost African trade

AUC School of Business strengthens ties with the African Export-Import Bank (Afreximbank) to shape continental and global trade. The partnership aims to support African trade while providing innovative educational solutions to tackle complex trade challenges.’

Kicking off in 2023, the collaboration between ExecEd and Afreximbank introduced the Certificate of Trade Finance in Africa (COTFIA). COTFIA equips participants with deep insights into the dynamic opportunities and challenges of the African economic landscape. By blending academic knowledge with practical applications, COTFIA addresses the specific priorities of African entrepreneurs.

To date, over 95 participants from 19+ countries in the continent have joined the program, spanning various sectors. The program’s hybrid format — blending virtual and in-person sessions — enhanced accessibility and flexibility, enabling a broad range of participants to benefit.

This September, the partnership soared to new heights with the launch of “AfCFTA: Its Genesis, Dimensions and Prospects,” centering on the African Continental Free Trade Area Agreement (AfCFTA). This new initiative empowers African entrepreneurs to seize the opportunities offered by AfCFTA.

Yemi Kale, the group chief economist and managing director of research at Afreximbank, stated, “Through this training program, we aim to empower African businesses to fully exploit the vast opportunities created by the AfCFTA, thereby enhancing their competitiveness and contributing to sustainable economic growth in Africa.”

The collaboration between the AUC School of Business ExecEd and Afreximbank falls in line with Egypt’s goal to strengthen trade capabilities within the country and across Africa. Through this partnership, the program fosters practical knowledge and strategic insights, ensuring that initiatives like AfCFTA create lasting economic benefits across the country.

Christian Kamga, Chief Executive Officer of ED SARL in Cameroon, highlighted, “The [first] session was interesting, and I was also very happy with the way the team here at AUC School of Business welcomed us and made this a great experience.” Mohammad Abdullah, Managing Partner at MIS Egypt added: “This is an exciting opportunity to connect Egyptian companies with their counterparts across the continent.”

For more information on our diverse range of banking, trade, and finance programs, please visit: https://business.aucegypt.edu/execed/individual-programs/banking-and-finance

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6

EGYPT IN THE NEWS

Foreign Minister Badr Abdelatty calls for renewed two-state solution

In a Washington Times op-ed, Foreign Minister Badr Abdelatty called for an independent Palestinian state as part of a two-state solution, urging the international community to support Palestinian self-determination. The FM condemned Israel’s “continued occupation, annexation, targeted assassinations, use of force and uninterrupted construction of illegal settlements across the occupied Palestinian territories with constant acts of violence from settlers,” saying that Israel’s “shortsighted and misguided approach” to guaranteeing its security through the use of force had not and would not yield results.

The only solution, Abdelatty stressed, is one that addresses the occupation’s root causes by providing Palestinians with hope and dignity through sovereign self-rule. He highlighted Egypt’s role in Middle East peace efforts, calling on the international community to continue pursuing the two-state solution so as to “spare future Palestinian and Israeli generations the scourge of war and terror.”

ALSO- Egypt joins 52 states calling for a halt in arms delivery to Israel: Egypt has backed a letter addressed to the UN Secretary General, the President of the Security Council, and the President of the General Assembly, pushing for halting exports of arms that could be used against Palestinians in occupied territories to Israel, according to a statement from the Foreign Ministry on Tuesday. The letter, which has the backing of 52 countries, is also supported by the Arab League and the Organization of Islamic Cooperation.

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7

ALSO ON OUR RADAR

Eastern Company hikes cigarette prices for the fourth time this year

RETAIL-

Eastern Company hikes prices for the fourth time this year: EGX-listed tobacco giant Eastern Company on Tuesday hiked prices of its cigarettes by up to EGP 5, after the company’s board approved the decision, according to a statement seen by EnterpriseAM. The price of all its 20-cigarette packs, including Cleopatra, now stands at EGP 38.75, while its higher-end Viceroy and Pall Mall now sell for EGP 60 a pack. The Box 10 — the pack including 10 cigarettes — now costs EGP 27. This marks the fourth hike the company imposed in 2024, following the latest hike implemented in July to comply with the Universal Health Ins. Law, and two other hikes in April and February.

(Tap or click the headline above to read this story with all of the links to our background as well as external sources.)

The reason: The increase came in response to the Finance Ministry enacting the law thatallows companies to raise prices by 12% annually without moving into a higher per-pack tax bracket, the head of the Federation of Egyptian Industries’ tobacco division, Ibrahim Imbaby, told EnterpriseAM.

Eastern attributed the increase to a weakening EGP, higher input costs, and higher transport costs.

M&A-

#1- PHD purchases stake in Makor Hotels + Taaleem: Property development giant Palm Hills Developments’ (PHD) general assembly has approved the purchase of a 9.5% stake in Makor Hotels from Mansour-Maghraby Investment and Development Company in a transaction valued at just under EGP 175.6 mn, the company said in an EGX disclosure (pdf). The transaction brings PHD’s total share in Makor Hotels to 69.5%.

PHD also approved a decision to purchase Palm Hills chairman and group CEO Yasseen Mansour’s entire stake in higher education outfit Taaleem in an EGP 1.9 bn transaction, the statement read. The transaction gives Palm Hills a 29.6% stake in Taaleem.

#2- Al Areej International Investment further reduces stake in Eastern Company: Al Areej International Investment sold another 20 mn shares in tobacco giant Eastern Company on Monday to an undisclosed Emirati buyer at EGP 25 a pop, bringing the total transaction value to EGP 500 mn, Al Mal reports, citing sources in the know. This brings down the company’s share in Eastern Company to 2.3% from 2.99% previously, by our math.

Remember: Al Areej announced on Sunday that it had sold some 9 mn shares of its stake in Eastern Company to an undisclosed buyer in an EGP 225 mn transaction, bringing the company’s stake in Eastern to 2.99% from 3.29%. The company holds another 30% stake in Eastern Company through its Global Investments Holding.

ENERGY-

The gov’t is looking to work with Emirati IRH to transport LNG overseas: The Oil Ministry and Emirati mining firm International Resources Holding (IRH) are in talks over the possibility of collaborating on liquefied natural gas trade and distribution in a bid to transport gas to foreign markets, according to a ministry statement. The talks, which came on the sidelines of the ADIPEC 2024 conference in Abu Dhabi, also saw the two parties exploring areas of cooperation in the mining sector.

Gov’t to launch mining tender, portal: The Oil Ministry is gearing up to launch a tender for mineral exploration in several areas in the Western Desert, Oil Minister Karim Badawi said. The ministry also plans to officially launch a mining portal before the end of the year to stimulate investment in the sector following the portal’s trial launch in July.

ICYMI- It was reported back in July that the government would launch an international tender for mineral exploration in Sinai, the Eastern Desert, and the Western Desert before the end of the year.

MANUFACTURING-

Minority stakes in two ACDIMA plants up for grabs: State-owned Arab Company for Drug Industries and Medical Appliances (ACDIMA) will offer investors stakes of up to 49% in a pharma raw materials plant with investments estimated at USD 150 mn and a glass production project with investments of at least USD 135 mn, Al Mal reports.

What we know about the pharma project: First announced in September 2023, the plant will produce 28 active substances used in the pharma industry. The first phase of the project will see Acdima set up production lines for 21 pharma raw materials and is set to start operations in 2026. The second is scheduled to come online in 2030.

One step closer to pharma industry localization: The company aims to dedicate 45% of production from the pharma materials plant to ACDIMA subsidiaries and 25% to local companies as part of the government’s wider drug industry localization project, ACDIMA chairperson Olfat Ghorab told Al Mal. The remainder of the plant’s production is set to be exported to neighboring countries, which Ghorab noted will assure the plant’s future profitability.

LOGISTICS-

Egypt’s planned ro-ro shipping line with Italy is almost here: The new ro-ro shipping line connecting Damietta Port with Italy’s Port of Trieste will begin operations on 29 November, according to a statement. The new line is part of the state’s plan to transform Egypt into a regional hub for transportation, logistics, and transit trade, as well as to open new export markets for Egyptian agricultural commodities in Italy and Europe.

The government has offered a number of incentives to support the project, including an 88% reduction in port fees and lowering road tolls to a flat rate of USD 100 per truck — in lieu of USD 300 per imported truck and USD 350 per exported truck.

AGRICULTURE-

Phase II of the Egyptian Cotton Project: The Madbouly government and the United Nations Industrial Development Organization (UNIDO) launched the second phase of the Italian Agency for Development Cooperation-funded Egyptian Cotton Project which aims to boost sustainability across the local cotton value chain, according to a statement. The second phase of the project aims to introduce young cotton farmers to sustainable practices and employ the youth across the cotton value chain. The first phase of the project ran from 2018 to 2021.

DEBT-

Misr Petroleum secures EGP 10 bn syndicated loan: State-owned oil company Misr Petroleum secured an EGP 10 bn syndicated loan from nine banks, sources familiar with the matter told Al Mal. The syndicate includes the National Bank of Egypt, CIB, QNB Alahli, Arab African International Bank (AAIB), Al Ahli Bank of Kuwait, Midbank, Banque du Caire, EG Bank, and the Agricultural Bank of Egypt.

ALSO WORTH NOTING-

#1- El Attal is inching closer to its KSA debut: Real estate player El Attal Holding is poised to start setting up a new mixed-use project in Saudi Arabia in 1Q 2025 and is set to ink the project’s contracts this month. The project, which will span over a thousand units, is set to encompass commercial, administrative, and entertainment activities.

#2- Teradix secures USD 140k to fuel Saudi expansion: Disruptech-backed eProcurement solutions startup Teradix has secured a USD 140k grant to fuel its expansion into Saudi Arabia. (Press release | pdf)

#3- GASC secures 290k tons of wheat to shore up reserves: State grain buyer GASC has purchased 290k tons of Romanian, Ukrainian, and Bulgarian wheat for delivery between next month.

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8

PLANET FINANCE

Investors watch equities, bonds, and crypto as US election unfolds

We’re hours away from the results of one heated US presidential race, and financial markets are gearing up for the wild swings to come. Traders are bracing for heightened volatility amid a tight race between Republican candidate Donald Trump and Democratic candidate Kamala Harris. The stakes are high, with potential policy shifts, economic ramifications, and the Federal Reserve’s imminent rate decision all poised to impact investor sentiment and market movements.

We have the latest on the election in the news well, above.

(Tap or click the headline above to read this story with all of the links to our background as well as external sources.)

This election’s outcome is poised to reshape various sectors, from healthcare and energy to technology and banking. A Trump victory could boost traditional energy stocks, while a Harris victory might favor renewable energy and tech sectors due to anticipated regulatory changes. Market participants are adjusting their portfolios accordingly, preparing for sector-specific impacts based on the election’s result.

What’s at stake for markets? As the dust settles on one of the most divisive US presidential elections in history, investors are zeroing in on the potential market ripples. From equities to bonds, currencies, and crypto, each asset class is poised for unique shifts depending on whether Trump or Harris claims victory.

Equities: Post-election market movements are expected to be sector-specific rather than broad-based. Stuart Kaiser from Citigroup notes that traders are bracing for a 1.8% swing in either direction for the S&P 500 immediately following the results. Goldman Sachs’ indexes — which track stocks favorable to either a Trump or Harris victory — show divergent trends; Trump-linked baskets waned in late October while Harris-aligned stocks gained momentum. “This will be one of the most easily investible election results ever, given the policy divergence between the two candidates,” David Wagner from Aptus Capital Advisors told Bloomberg.

Pulse check: All of the nation’s major indices closed in the green last night — the benchmark S&P 500 was up 1.2%, the Dow Jones closed 1.0% higher, and the Nasdaq saw the most significant increases with a 1.4% gain.

Bonds: “The markets are most concerned about a sweep and the lack of checks and balances,” BNY Mellon Wealth Management’s John Flahive told Bloomberg. Meanwhile, JPMorgan strategists predict that a Republican sweep could push 10-year yields higher, while a Harris victory with a divided Congress might stabilize the bond market, fostering a relief rally.

Currencies: Trump’s tariff policies are likely to bolster the USD, potentially pushing it by 7% higher on a trade-weighted basis, according to JPMorgan’s Meera Chandan. This would weaken other currencies like CNY, MXN, and most notably the EUR. A Harris victory, on the other hand, could weaken the USD and strengthen the EUR, with the threat of new tariffs in the rearview.

Crypto: It appears unlikely that the crypto sector would be harmed by which way the election race goes — A Trump administration will create a strategic reserve of BTC and ease regulatory constraints, spurring optimism in the crypto market, while a Harris administration “wouldn’t necessarily be a negative for the sector,” writes Bloomberg. “Whoever the next administration is, it’s going to take a very different approach on a regulatory perspective toward crypto,” Chris Rhine from Galaxy Digital is quoted as saying by Bloomberg.

The story is getting a lot of ink in international press: Bloomberg | CNBC | Reuters | TheGuardian | CNN.

MARKETS THIS MORNING-

Asia-Pascific markets are mostly in the green in early trading. Japan’s Nikkei is leading the gains, up over 1.7%, Shanghai is up 0.6%, and South Korea’s Kospi is up 0.1%. The Hang Seng Index is in the red, down 1.1%.

Over on Wall Street, stock futures are flat as investors sit awaiting the results of the presidential election.

EGX30

30,794

+0.5% (YTD: +23.7%)

USD (CBE)

Buy 49.08

Sell 49.21

USD (CIB)

Buy 49.1

Sell 49.2

Interest rates (CBE)

27.25% deposit

28.25% lending

Tadawul

12,015

-0.2% (YTD: +0.4%)

ADX

9,384

+0.6% (YTD: -2.0%)

DFM

4,595

+0.2% (YTD: +13.2%)

S&P 500

5,783

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THE CLOSING BELL-

The EGX30 rose 0.5% at yesterday’s close on turnover of EGP 3.5 bn (17.3% below the 90-day average). International investors were the sole net sellers. The index is up 23.7% YTD.

In the green: Eastern Company (+3.6%), Ezz Steel (+2.9%), and Orascom Construction (+2.8%).

In the red: B Investments Holding (-2.1%), Oriental Weavers (-1.9%), and Cleopatra Hospitals (-1.8%).

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Our weekly deep-dive into infrastructure in Egypt.

Published every Wednesday in EnterpriseAM.

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9

HARDHAT

Algammal for Contracting to set up three industrial complexes in Saudi Arabia, Libya, and Iraq

Algammal is set to build three industrial complexes in KSA, Libya, and Iraq: Home-grown contracting firm Algammal for Contracting is gearing up to establish three industrial complexes in Saudi Arabia, Libya, and Iraq, the group’s vice president Mohamed Farouk Hafeez told EnterpriseAM. These complexes will focus on underground infrastructure pipes essential for water, electricity, gas, and internet supplies in industrial cities, smart cities, and data centers.

(Tap or click the headline above to read this story with all of the links to our background as well as external sources.)

About the group: Founded in 2003, Algammal initially started its journey with subcontracting for electrical infrastructure projects. Over time, the group expanded into general contracting. By 2008, the company entered the pipeline and electrical networks sectors as a certified subcontractor for major contractors, evolving into a prominent general contractor for infrastructure, electrical networks, industrial projects, commercial buildings, and housing projects. The group currently has a branch in Libya and opened its latest branch in Saudi Arabia eight months ago, as it continues to push forward with its international expansion plans.

A regional footprint. The company has established alliances with pre-qualified major contractors in several Arab countries, including Libya, the UAE, Oman, Saudi Arabia, and Iraq, according to Farouk.

Industrial expansion: Expanding in the contracting sector paved the way for the group to step foot into the industrial sector, launching subsidiaries like Ajyad for General Contracting and Metal Works, Algammal Transportation and Services, and Hafar Al Batin Concrete. The group provides international services through Egyptian Global Industrial and Contracting Corporation (EGICCO).

What we know about the regional projects: The group recently obtained a license to build a complex in Saudi Arabia with an annual production capacity of 36-40k tons of various products and investments exceeding SAR 200 mn (c. USD 53 mn). It is also awaiting a license for another complex in Libya, with a plan to open a contracting arm there to meet local project demands. Meanwhile, early-stage plans are in place for launching a contracting company and industrial complex in Iraq, according to Farouk.

Navigating currency challenges: To mitigate the impact of exchange rate fluctuations, Algammal is working to increase the local component ratio in its operations to 80-90%, and only import specialized cables. FX revenue from the group’s operations in foreign markets supports the group’s financial standing, Farouk said, adding that the group has not been affected by import restrictions as it has sufficient stock to complete ongoing projects.

The construction and infrastructure sector is undergoing a major transformation, with caps on government investments opening the door for private sector players. This shift allows banks to finance guarantees for larger projects in Egypt and abroad, Farouk told us, adding that the government continues to implement national projects, offering diverse opportunities for private sector contractors.

Major projects in progress: Algammal secured three construction packages for the Egypt-Saudi Arabia electrical interconnection project. The project — carried out by Italian cable manufacturer Prysmian — involves laying eight 500kV DC cables across the Gulf of Aqaba and preparing and installing ground cables.

The project’s size: Egypt and Saudi produce a combined 160 GW of electricity every year and the interconnection will transport the 3 GW at 500 kV along 1.3k km using overhead power lines and a subsea cable across the Red Sea, potentially supplying power to 20 mn people.

The progress so far: The company has completed about 75% of its work on the project, including laying seven underwater cables, with the eighth underway. The groundwork is expected to be completed in less than 30 days.

Remember: Egypt aims to kick off the trial operation of the first phase of the USD 1.8 bn power interconnection in April 2025, ahead of the original May date. The first phase — which will see 1.5 GW of the planned 3 GW come online — is set for completion by June 2025.

Algammal is also working on several major projects, including:

  • New Delta: The company is working with the Egyptian Electricity Transmission Company to connect 220kV overhead lines to the New Delta stations, with investments totaling EGP 1.8 bn.
  • Cairo Monorail: The company is responsible for supplying and installing 220kV of underground cables and fiber optic cables under an EGP 2 bn contract.
  • New Abu Qir Port: The company is constructing a comprehensive rainwater drainage network to enhance the development of reclaimed lands within the port, with total investments of EGP 620 mn.
  • Toshka Valley: The company is helping extend overhead power lines for an irrigation reclamation project in southern Toshka Valley, with investments amounting to EGP 441 mn.
  • New Administrative Capital: The company is undertaking drilling works to lay high-voltage cables throughout the city.

Your top infrastructure stories for the week:

  • Egypt to establish three shipyards: Egypt is set to establish three new shipyards in partnership with the private sector in the Suez and Red Sea governorates, with investments exceeding USD 100 mn.
  • Who’s taking over the new capital’s business district? A consortium of China State Construction Engineering Corporation (CSCEC) subsidiary Umi Group and IGI Holding signed an MoU with the New Urban Communities Authority to manage and operate the Central Business District in the New Administrative Capital.
  • Egyptian contech startup Elmawkaa has been acquired by Saudi-based Ayen: Home-grown construction tech startup Elmawkaa was acquired by Saudi-based real estate appraisal platform Ayen in a SAR seven-figure transaction.
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CALENDAR

2024

NOVEMBER

4-8 November (Monday-Friday): World Urban Forum, Cairo, Egypt.

8-9 November (Friday-Saturday): Carerha Summit 2024, Cairo, Egypt.

10-12 November (Sunday-Tuesday): Falak Startups’ Fund Manager Masterclass, Cairo, Egypt.

12-15 November (Tuesday-Friday): Arab African Investment and International Cooperation Summit, Aswan, Egypt.

17 November (Sunday): The House of Representatives reconvenes.

17-19 November (Sunday-Tuesday): Autotech Exhibition for Automotive Aftermarket & Feeder Industries, Cairo, Egypt.

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

25-27 November (Monday-Wednesday): Annual Digital Nation Conference, Cairo, Egypt.

26-28 November (Tuesday-Thursday): Egypt Energy Show, Cairo, Egypt.

28-30 November (Thursday-Wednesday): Cairo International Wood and Wood Machinery Show, Cairo, Egypt

29 November (Friday): Egypt and Italy to launch a ro-ro shipping line connecting Damietta Port with Italy’s Port of Trieste.

30 November (Saturday): Deadline to apply for renewable energy projects under the peer-to-peer (P2P) system.

DECEMBER

16-17 December (Monday-Tuesday): Mining World Conference 2024, London, UK.

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

EVENTS WITH NO SET DATE

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

3Q 2024: Egyptian-Armenian Joint Committee.

First week of November: Egypt-Turkey high-level trade consultation mechanism.

November 2024: Egypt to host the World Urban Forum (WUF12).

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

2025

28 January (Tuesday): Nigeria to inaugurate the USD 5 bn Africa Energy Bank in Abuja.

7-10 April 2025 (Monday-Thursday) : EFG Hermes One on One conference, Dubai, UAE.

May 2025: Egyptian Exporters Association (Expolink) exhibition, Italy.

July 2025: The first operational trail of Egypt-KSA electricity interconnection line.

March 2025: Operation of phase one of the Amotope wind farm

EVENTS WITH NO SET DATE

2025: The InterAcademy Partnership assembly.

2025: Nile Basin States Summit, Cairo, Egypt.

2Q 2025: Safaga Terminal 2 to start operations.

Mid-2025: The Administrative Capital for Urban Developments to roll out the second phase of offering industrial plots to investors.

2027

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

EVENTS WITH NO SET DATE

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

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