The IFC says it wants in on Egypt’s privatization drive

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What We're Tracking Today

IMF Egypt loan review date still to be confirmed

Good morning, wonderful people, and welcome to the first full workweek of Ramadan. We hope the holy month is treating you well.

It’s interest rate week: It’s a big week for the folks over at the Central Bank of Egypt, who will meet on Thursday to decide on how to respond to soaring inflation rates. Most of the analysts and economists we spoke to last week see the Monetary Policy Committee (MPC) hiking interest rates by at least 200 bps in a bid to curb accelerating prices and improve foreign-currency liquidity, with some penciling-in an even larger 300-bps increase. After raising rates by 800 bps last year, the MPC at its last meeting in February opted to leave them unchanged, though last month’s red-hot inflation data renders a continuation of the ‘wait and see’ approach unlikely.

^^ We have the full results of our customary interest rate poll in this morning’s news well, below.

The IMF is yet to set a date for the first review of Egypt’s USD 3 bn loan program:“Preparations for the first review have started and dates for the first review mission will be announced when they have been agreed with the authorities,” IMF Communications Director Julie Kozack said in a press briefing on Thursday.

IMF officials should have been here by now: The IMF had scheduled its first review of the program for 15 March in a staff report published in January. Kozack didn’t elaborate on the reasons for the delay. The IMF will conduct eight reviews over the duration of the 46-month program, which will end in June 2026. The second review is due to take place on 15 September.

WATCH THIS SPACE- Private-sector minimum wage talks to start soon: The National Council for Wages will meet during Ramadan to discuss raising the private-sector minimum wage, a source at the council told Al Borsa. Monthly wages for private sector employees should be no less than EGP 3.5k a month, the source said — that’s a 30% hike the current gross minimum monthly salary of EGP 2.7k.

Expect pushback: Some in the private sector have historically been reluctant to agree to higher minimum wages (though as we keep saying, if you can’t afford to pay your staff a living wage you probably shouldn’t be in business). Public-sector workers and civil servants will receive wage hikes and a higher minimum wage from 1 April.

EGP WATCH-

Fitch Solutions sees the EGP falling to 33.00 against the USD in 1H 2023 thanks to the ongoing FX shortage, according to its latest risk report on Egypt. While the country has secured external financing from the IMF and Gulf countries to cover its needs, “a burgeoning due diligence process will prevent the USD 20 bn of investments pledged by the UAE, Saudi Arabia and Qatar to be channeled into Egypt’s privatization programme in the short term,” the report reads .

The silver lining: Fitch is expecting the EGP to rebound to 30 against the USD by the end of 2023 as the privatization program picks up pace and portfolio investors stage a partial return to the market, bringing in more hard currency.

REMEMBER- The official EGP-USD rate hasn’t moved since 12 March, remaining priced at 30.96.

ALSO- The Central Bank of Egypt (CBE) has relaunched its website. Read more about the new website and its features here.

AFCON QUALIFIERS GROUP STAGE- Egypt secured a comfortable2-0 home victoryagainst Malawi on Friday after two first-half goals from Mohamed Salah and Omar Marmoush kept the Pharaohs at the top of Group D following the third round of the Africa Cup of Nations (Afcon) qualifiers. Egypt’s away game on Malawian turf is scheduled for this Tuesday, 28 March, at 3pm.

PSA- We’re in for another week of changeable weather, with the mercury on a rollercoaster and frequently foggy skies. The Egyptian Meteorological Authority (EMA) is forecasting the daytime high to hit 22°C and a nighttime low of 13°C today, with foggy skies across Greater Cairo. Later in the week we will see highs of 26°C as the weather continues to warm up as we head deeper into spring.

SO, WHEN DO WE EAT? We’ll be breaking our fasts tonight at 6:10pm and Fajr prayers are at 4:24am tomorrow.

HAPPENING TODAY-

EU Vice-President Margaritis Schinas is in Egypt from 26 to 28 March to discuss skills, education and migration, the EU said yesterday. Schinas will meet cabinet ministers, including Foreign Minister Sameh Shoukry, Education Minister Reda Hegazy, and Manpower Minister Hassan Shehata.

The Senate is back in session after a three-week break. Here’s what’s on the agenda:

The Economic and Financial Affairs Committee will discuss the government’s efforts to stop soaring inflation and prices;
The Agriculture Committee will review the government’s strategy to support the fertilizer industry;
The Energy and Environment Committee will look into the progress of implementing COP27’s climate recommendations;
The Education Committee will look into the National Telecommunications Regulatory Authority’s efforts to fight cybercrime.

HAPPENING THIS WEEK-

We can expect to get our first proper look at the state’s spending plans for the coming fiscal year when the Finance Ministry delivers the draft FY 2023-2024 budget to the House of Representatives.

Cambodian Deputy Prime Minister and Foreign Minister Prak Sokhonn will visit Cairo this Wednesday and Thursday for talks, the Cambodian foreign ministry said Friday. Sokhonn will visit Morocco on Monday and Tuesday before arriving in Egypt.

THE BIG STORY ABROAD-

Russia will soon place its tactical nuclear weapons in Belarus, President Vladimir Putin said yesterday, according to Russian news agency Tass. Training and infrastructure for the nukes will be in place by 1 July, he said. (AP | Reuters | Bloomberg | Financial Times | Wall Street Journal)

FROM THE REGION-

The GERD is almost complete: Ethiopian authorities said that 90% of construction work on the Grand Ethiopian Renaissance Dam (GERD) is now complete, 12 years to the day since beginning work on the mega dam, Ethiopian state-affiliated news agency Fana reports.

Syria and Saudi Arabia have agreed to restore diplomatic ties and reopen embassies after more than a decade of hostilities, three sources with knowledge of the matter told Reuters.

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The IFC could participate in Egypt’s privatization program, regional vice-president for Africa Sérgio Pimenta says

The International Finance Corporation (IFC) wants in on the state privatization program: The first of as many as 32 privatization sales will start after Ramadan, and while the majority of headlines have centered on potential appetite from GCC sovereign wealth funds, emerging markets investors — hungry for bright spots in a gloomy EM macro climate — are closely watching progress on the program.

That’s according to IFC Regional VP for Africa Sérgio Pimenta, who was in town last week for talks with the government on how the IFC can help. We sat down with Pimenta to discuss his thoughts on the rebooted program, what the World Bank Group’s private-sector finance arm is pitching the Madbouly government, and what else is in the pipeline for the IFC in Egypt.

Edited excerpts from our conversation:

As a development institution we see this program as an important step in the right direction that will create positive momentum, and we are excited and ready to engage in helping to support the program.

We’ve been actively encouraging investors to take part: What we have been doing on our side is talking with private-sector players, encouraging them to participate, telling them that we think this is an interesting program and it's worth coming, applying, participating and investing.

We’ve expressed to the government our interest in helping out with the program, and they already indicated that they would be very interested in these talks. That’s why I’m here.

We see that we can help in three ways — the first being as an adviser: We have a team that already does advisory work for governments on privatization. So that team can help the government implement the process, give advice in terms of defining what the right structure is, what are the different steps, help to pitch to private-sector investors, and in the bidding and selection process.

The other part that we can do — and what we are more known for — is financing. Private-sector investors that want to come in and acquire a stake can come to us to help fund that acquisition or that operation.

We can also mobilize funding: Meaning we can also mobilize other partners to come and finance this type of transaction.

Theoretically we would help on any of the 32 companies announced in the program, but we will have to decide which ones will have the most value and the biggest impact as well as those that are most aligned with the government strategy and our own, which is very much focused on infrastructure, water and healthcare.

For those EM-weary investors, we have this to say: Egypt has a large and young population coupled with a very interesting geographic location, with many natural and strong competitive advantages that are independent of whatever happens in the short term in the global macro environment. So we think that an investor coming in will look at those circumstances and will say, “Okay, I think it is worth putting money in the country.”

Investors want a clear vision for the program. They want to understand the government’s vision regarding the privatization program. They want details on how it works, what part of the companies are open for investment as well as the future corporate governance for these companies. Having clear ownership structures is something that the private sector companies are going to look at, so that they know what they're getting into.

We believe FDI will follow the program. The privatization program will provide a strong indication to investors of Egypt’s direction in terms of long-term prospects of growth, of prospects of opportunities and of business. If you improve the business environment in Egypt, not only will foreign investments come in, but Egyptian companies, investors and people will invest. We’ve been helping the government simplify procedures and cut red tape so that investors don’t have to waste their time, money and energy getting what they want.

We expect to have a record year in Egypt and not only this year, but next year also. So we are on track to massively support Egypt with financing for the private sector. I'm quite confident of that. Right now our portfolio in Egypt is USD 1.5 bn, with almost USD 900 mn in new financing done in FY 2022-2023.

We are looking at everything around green construction and green buildings, as well as water. The IFC has a longstanding green strategy in Egypt: All of our work on energy in Egypt is renewable and we did a lot of work supporting the government with the organization of COP27 in Sharm El Sheikh last year.

Gender and supporting Egyptian women’s participation in the economy is also important to us. On the financing side, we are putting together a certain number of projects with financial institutions that we already work with, aiming to support SMEs run by women. On advisory, we have been helping companies have more gender fair policies and increasing the presence of women in the workforce.

Egypt secures USD 7 bn World Bank loan to support private-sector, climate goals

The World Bank will lend Egypt USD 7 bn over the next five years to support private-sector job growth, health and education services, and climate measures, it said in a statement Wednesday. The Country Partnership Agreement, approved by the bank’s executive board on Tuesday, will see the International Bank for Reconstruction and Development (IBRD) provide USD 1 bn a year through to 2027 and the International Finance Corporation (IFC) lend USD 2 bn during the period.

The plan: The agreement looks to achieve its goals by creating more and better private-sector jobs, improve the provision of health and education services, and strengthen the country’s resilience to macro-economic and climate-related shocks.

It’s been two years since the last CPF ended: The previous CPF initially covered FY 2015 - 2019, and was extendedfor an additional two years to end in 2021. It included a total of USD 8 bn of WBG financing — of which USD 6 bn was allocated from the IBRD and, again, USD 2 bn from IFC.

The news got attention overseas:AP | Reuters | Bloomberg.

Egypt’s central bank will likely increase interest rates this week -poll

The Central Bank of Egypt (CBE) will raise interest rates by at least 200 bps when it meets on Thursday as it tries to put a lid on soaring inflation amid continued pressure on the EGP, according to a poll of analysts we conducted last week. Six of seven respondents see the central further tightening policy, with three expecting policymakers to raise rates by 200 bps and two penciling in a 300-bps hike.

Where we stand: The overnight deposit rate is 16.25%, while the overnight lending rate is 17.25% and the main operation and disc. rates are at 16.75%. The CBE has raised rates by 800 bps over the past year, including a large 300-bps increase in December, but in a surprise move opted to leave them unchanged at its last meeting in February.

Inflationary pressures are to blame: “We expect the Monetary Policy Committee to continue tightening policy rates by around 200 bps to tame increasing inflation rates, which we expect to continue rising,” said HC Securities banking and macro analyst Heba Monir. Prime Securities Head of Research Amr El Alfy is also expecting a 200 bps hike.

Inflation surged to a fresh high in February on the back of a record increase in food prices. The follow-through effects of the EGP devaluation in January caused headline inflation to hit its highest level since July 2017, while core inflation hit a record high.

More aggressive tightening could be on the table: Economist Mona Bedeir is predicting a 200 bps increase but “wouldn't be shocked if the CBE opts for a more aggressive hike and raises its policy rate by 300 bps,” she told us, citing the pressure on the exchange rate and the expected inflation trajectory. Hany Aboul Fotouh, a veteran of CI Capital, Arab Banking Corporation, and HSBC, is also expecting a 200-300 bps hike.

Inflation isn’t coming down any time soon: HC Securities is expecting inflation to continue to increase for the coming months, peaking at almost 36% by July before falling back to 30.3% by the end of the year. Inflation will be driven by the recent fuel-price hikes, the devaluation of the EGP, the ongoing poultry shortage, and the expected rise in electricity prices from 1 July, Monir said. HC Securities is expecting inflation to fall to 21.5% in March 2024, while Prime Holding sees it averaging 27% through this year.

A lot is contingent on what happens with the government’s privatization program: “The upside risk on this estimate is heavily dependent on the magnitude of USD / EGP movements,” Bedeir said. ”Delays to the IMF-backed reforms, privatization plans, or Gulf investor inflows will put pressure on the currency and inflation.”

The CBE’s inflation targets are looking out of reach: The CBE is sticking with its current inflation target of 7% (± 2%) through to 4Q 2024, but wants to bring inflation down to 5% (± 2 percentage points) by 4Q 2026. “Even as inflation slows later in the year, we do not envisage it will fall back within the CBE’s target range of 7% (± 2%) until mid-2024 at the earliest,” Capital Economics’ James Swanston wrote in a note.

One vote for leaving rates unchanged: Faisal Islamic Brokerage’s head of research, Hesham El Shebeini was the sole respondent to predict leave rates unchanged. “We believe that there will not be any further interest rate hikes by the CBE down the road. We believe that an interest rate cut will be in sight within 2024 or so,” he said.

Abu Dhabi Ports bids for Port Said and Damietta port operators -Al Mal

Is ADP eyeing stakes in Port Said + Damietta container and cargo handling?Abu Dhabi Ports (ADP) has reportedly submitted an initial offer to acquire a controlling stake in state-owned Port Said Container and Cargo Handling (PSCCHC) and Damietta Container and Handling (DCHC), Al Mal reports, citing what it says are sources close to the matter. No details were provided on the stake size AD Ports is eyeing, nor the value of its offer.

ADP’s bid would rival an offer from Qatar’s SWF: The Qatar Investment Authority’s investment arm Maha Capital Partners had submitted an offer to acquire stakes in the two terminal operators in January. The negotiations with Qatar have stalled over the size of the stake Maha Capital wants to acquire, with the Transport Ministry reportedly reluctant to sign off on the QIA acquiring a majority stake in the companies.Qatar had inked an MoU to invest in Egypt’s port infrastructure, a few months after pledging to invest USD 5 bn into the economy to help shield the country from the fallout from the war in Ukraine.

What’s next: ADP’s offer will be presented to the board of PSCCHC and DCHC’s parent company, the Holding Company for Maritime Transports, Al Mal’s sources said, without providing further information on the expected timeline of the negotiation process.

ADP is no stranger to the Egyptian market: ADP signed a concession agreement earlier this month to develop and operate a container terminal at Safaga Port for USD 200 mn. The Emirati port developer has also signed two 15-year agreements worth a combined USD 33 mn to develop cement terminals at Al Arish Port and West Port Said Port. Last year, the group also acquired a 70% stake in shipping and logistics firm International Associated Cargo Carrier for USD 140 mn.

MEANWHILE- ADP is also eyeing a project in East Port Said Port: ADP has inked a MoU with the Suez Canal Economic Zone to develop and operate a multi-purpose container terminal in East Port Said Port, theSCZone said last week.. The company will start work on the new terminal in the coming months with the aim of having the first phase of the project up and running in 2Q 2024. The terminal will complement a nearby logistics zone the group is working on, according to the statement.

SODIC, Orascom Development Egypt end sale talks on Orascom Real Estate

SODIC won’t be acquiring Orascom for Real Estate: Real estate developers Orascom Development Egypt (ODE) and SODIC have agreed to end talks on SODIC’s bid to acquire Orascom for Real Estate (ORE),Orascom Development Holding (ODH) said in astatement Thursday. The company did not disclose why the talks fell through.

The market welcomed the news: ODE shares gained 1.5% during trading on Thursday to close at EGP 7.99. SODIC shares were up 6.6% to close at EGP 13.19.

REFRESHER- SODIC in October submitted a non-binding offer to acquire 100% of ORE for almost EGP 2.5 bn. ORE ⁠— which owns the 4.2 mn sqm O West development ⁠— is 70% owned by ODE.

O West is a priority for ODE: “ODH continues to be fully committed to the development of O West,” the company said, adding that it plans to deliver over 1k residential units and launch the first phase of its sports club this year. O West accounted for more than half of the company’s new sales in 2022.

SODIC has had appetite for M&A following its acquisition by UAE investors. The company last year made a play for Madinet Nasr for Housing and Development (MNHD), but the transaction fell through after MNHD shareholders said the bid was too low. A consortium of real estate giant Aldar Properties and Abu Dhabi sovereign wealth fund ADQ acquired more than 85% of SODIC in 2021.

China’s Xinxing to invest USD 2 bn in iron, steel plants in Suez Canal area. PLUS: Danone to up investment in Egypt this year.

More investment from China: Chinese company Xinxing Ductile Iron Pipesplans to invest USD 2 bn to build iron and steel plants in the Suez Canal Economic Zone (SCZone), according to a cabinet statement. The plants will produce iron pipes and steel products for domestic use and for export and will be located in China’s TEDA industrial zone in Ain Sokhna.

By the numbers: The project is expected to generate an annual turnover of USD 2.6 bn and create more than 2.1k jobs. The first phase will see Xinxing build a USD 150 mn cast iron pipe factory that will employ more than 600 people and produce some 250k tons of pipes annually. In the second phase, the company will build a USD 1.8 bn steel factory, producing some 2 mn tons of steel products for export each year and employing 1.5k people.

This is the third big-ticket investment Chinese firms have been involved in recently: Hong Kong-based port operator Hutchison Ports and Chinese shipping firm Cosco Shipping Ports were among the companies that earlier this month signed agreements worth USD 1.6 bnto develop new container terminals at the Ain Sokhna and Dekheila ports. China Energy also said recently that it would begin work on a USD 5.1 bn green hydrogen facility in May.

March also saw Chinese manufacturers expand production in the SCZone: Fiberglass manufacturer Jushi Group inaugurated a USD 320 mn production line at its factory in the zone while the Egypt Fanyang Textile Company opened a USD 60 mn factory.

DANONE’S 2023 INVESTMENT PLANS-

Danone Egypt will invest EGP 170 mn in its operations this year, up from EGP 150 mn last year, Hesham Radwan, general manager and managing director of Danone Egypt and Northeast Africa, told Al Shorouk.

More localization + exports: The company is working to increase the use of local components in its operations to 85% within the coming three years and increase its exports to 5% of its total Egyptian production from 3% currently.

National Paints Holding ups its bid for Egypt’s Pachin + Sidpec finishes due diligence on Ethydco

Pachin bidding war intensifies: Dubai-based National Paints Holding’s (NPH) has upped its offer for EGX-listed Paint and Chemical Industries (Pachin) in response to Eagle Chemicals’ new bid last week, the Financial Regulatory Authority (FRA) said in an EGX disclosure (pdf) on Thursday. The Emirati firm is now offering to purchase 75-100% of the state-owned company for EGP 36.00 per share, EGP 1.00 higher than Eagle Chemicals’ EGP 35.00 bid submitted last Tuesday. NPH’s new offer values the company at EGP 864 mn, according to our calculations.

Tick tock: NPH’s new offer has extended the 10-day mandatory tender offer (MTO) by an additional day, giving Pachin’s shareholders until Tuesday, 4 April to respond.

Market reacts: Pachin’s shares rose 4.8% to EGP 36.6 during Thursday’s trading.

NPH has big plans for Pachin,including developing Pachin factories, adding new products, and increasing export revenues, Pachin said in an EGX disclosure (pdf).

REMEMBER- The play for Pachin comes amid the government’s privatization push, which should see it reduce its involvement in or exit certain industries to make way for the private sector. Pachin is currently approximately 54% owned by state-owned companies and banks.

Advisors: Al Ahly Pharos is acting as broker on the transaction, Matouk Bassiouny & Hennawy are acting as NPH’s legal counsel, while the company doesn’t have a financial advisor. Al Ahly Pharos is advising Pachin, and Shalakany Law Office is legal counsel.

SIDPEC FINISHES DUE DILIGENCE ON ETHYDCO-

Sidpec-Ethydco merger is nearing the endgame: EGX-listed Sidi Kerir Petrochemicals (Sidpec) has completed due diligence on Egyptian Ethylene and Derivatives Company (Ethydco) ahead of a potential all-share merger, Al Mal reports, citing sources familiar with the matter. The financial advisor working on the transaction, Baker Tilly, has issued the swap ratio and is working on the final legal and financial reports, which will be put to the companies’ boards for approval, the sources said.

Transaction could close within three months: Al Mal’s sources say that the acquisition could be finalized before the end of 2Q 2023 in June.

REMEMBER- The merger has been in the works since last year, when Sidpec expressed interest in fully acquiring Ethydco through a share swap. Sidpec currently owns 20% of Ethydco, making it the company’s second-largest shareholder.

Investors are already lining up: Gulf investors have expressed interest in acquiring stakes in the planned merger, eyeing between 16-20% of the new company.

Ethydco is in the state’s privatization plans: The chemicals firm is among the 32 state-owned companies that the government is looking to part-privatize over the coming year. The government has not mentioned Sidpec as being in line for privatization though an unconfirmed press report claimed it could look to offer a secondary stake to investors.

EBRD, IFC to advise Egypt’s sovereign fund on desalination tenders

EBRD + IFC to help launch desalination PPPs: The European Bank for Reconstruction and Development and the International Finance Corporation (IFC) will work with the Sovereign Fund of Egypt to increase private-sector participation in proposed desalination plants, the EBRD, the IFC, and the cabinet said Wednesday. The two multilateral lenders will provide advice on how to structure and implement four public-private partnership desalination projects, the European bank said.

Desalination is key for Egypt’s future water security: The plants are part of the government’s plan to add 8.8 mn cubic meters per day of desalination capacity by 2050. SFE boss Ayman Soliman said in December that it will sign contracts for 21 desalination plants this year. As many as 28 companies were said to have bid for the contracts.

IFC commits EUR 25 mn to Mediterrania Capital’s regional fund

Mediterrania Capital Partners’ regional fund secures IFC investment: The International Finance Corporation (IFC) will invest EUR 25 mn in Malta-based impact investor Mediterrania Capital Partners’ Mediterrania MC IV fund, it said in a statement Wednesday. The IFC could invest an additional EUR 20 mn in the fund.

The fund has attracted the attention of European DFIs: The European Bank for Reconstruction and Development and the European Investment Bank have both expressedinterest in committing a combined EUR 35 mn to the fund.

About MC IV: The fund will invest in mid-cap companies in Egypt, Morocco and Tunisia and has an EUR 350 mn target close. The fund will focus on the healthcare, fast-moving consumer goods, financial services, and manufacturing sectors, with 25% of its capital earmarked for women-owned business.

Egypt’s EFG Hermes and Orascom Construction report higher revenues in 2022

EFG Hermes Holding reported a net income after tax and minority interest of EGP 1.8 bn in 2022, up 18% from 2021, the bank said in its earnings release (pdf). Revenues surged 77% during the year to reach almost EGP 11.0 bn, underpinned by strong performance at its investment bank and NBFIs, as well as the acquisition of aiBank.

On a quarterly basis: Revenues more than doubled y-o-y in 4Q 2022 to EGP 4.6 bn, supporting 63% growth in net income which reached EGP 813 mn during the three-month period.

The breakdown: Revenues at EFG Hermes’ investment bank rose 58% to EGP 6.2 bn, driven primarily by higher foreign-currency gains boosting holding and treasury revenues. Meanwhile, valU drove growth in non-bank lending, more than doubling its revenue to EGP 650 mn over the year. In total, the bank’s NBFIs delivered EGP more than EGFP 2.5 bn in revenue during 2022, up 28% on the year before. Meanwhile, the incorporation of aiBank contributed EGP 2.2 bn in revenues. EFG Hermes acquired 51% of the bank in November 2021.

Looking ahead: “The investment bank leveraged a favorable investment landscape in the GCC to strengthen its presence and advise on some of the most high-profile transactions in the region,” Group CEO Karim Awad said in an accompanyingstatement (pdf). “We remain confident in our ability to continue expanding our pipeline of equity, debt, and M&A transactions, with an eye to unlocking value-accretive prospects for clients and investors alike” he added.

ORACOM CONSTRUCTION REVENUES UP-

Orascom Construction reported a 18% y-o-y increase in revenues to USD 4.2 bn in 2022, according to its latest earnings release (pdf). Net income attributable to shareholders remained flat y-o-y at USD 113.5 mn. Net income was up 50% y-o-y during 4Q 2022 to USD 55.8 mn, while revenues for the quarter jumped 12% to more than USD 1.1 bn.

The company’s backlog stood at USD 5.3 bn in 2022. Egypt made up the majority of the company’s backlog as of year end, with a 68% share, followed by the US (25%) and Saudi Arabia (2.6%).

“We recorded another year of healthy new awards mostly in Egypt and the US, providing us with sufficient revenue visibility and comfort over the next year,” CEO Osama Bishai said.

Egypt Post’s investment arm has a new managing director

Egypt Post’s investment arm, Post for Investment, has appointed Ahmed Ali Abdelrahman (LinkedIn) as managing director, he announcedon LinkedIn on Wednesday. Abdelrahman has more than 25 years of experience in the investment and banking sectors and most recently served as chairman of Beltone’s consumer financing arm BelCash and Beltone Leasing.

Most of Egypt’s talk shows are on hiatus for Ramadan

The Ramadan talk show lull kicks off: In typical fashion, our talking heads went into hibernation as Ramadan mosalsalat took over the small screens.

Who will be missing from our screens? Kelma Akhira’s Lamees El Hadidi, Masa’a DMC, and Al Hayah Al Youm are all taking Ramadan off.

B Investments approves healthcare, pharma investment with Egypt’s sovereign fund. PLUS: More Edita buybacks, 3-month sugar export ban, Capricorn’s Egypt focus

INVESTMENT-

B Investments’ board signed off on investing up to EGP 500 mn in the Sovereign Fund of Egypt’s (SFE) healthcare and pharma sub-fund, it said in a statement to the bourse (pdf) on Wednesday. The investment is one of two agreements the firm signed with the SFE in January that could channel more than EGP 2 bn into local healthcare and pharma businesses.

REFRESHER- The SFE is looking to draw an initial EGP 1.2 bn for the sub-fund, and hopes to raise additional capital down the line. It will invest in local pharma players to help them expand into under-served cities around the country and improve their digital offering. The fund had also agreed to invest EGP 100 mn in B Healthcare Investments, which aims to raise up to EGP 1 bn to deploy in the specialized healthcare sector, with B Investments contributing an additional EGP 200 mn.

CAPITAL MARKETS-

Edita is buying back another 1% of its shares: EGX-listed Edita Food Industries will buy back 7.23 mn of its shares at EGP 14.50 apiece, it said in an EGX bulletin on Wednesday. The move takes the company’s buyback program, first announced last summer, to 5.8% of its share capital.

Buybacks have helped lift the company’s share price: Edita stock has climbed almost 90% since the company first announced the buyback program in August. Shares closed at EGP 15.02 on Thursday after rising 2.9% during the session. Investors have, meanwhile, had appetite for the company’s shares on the back of its strong sales despite the economic headwinds of the past 12 months.

COMMODITIES-

No sugar exports for three months: The Trade Ministry has banned the export of sugar for three months, effective last Tuesday, 21 March, according to a decision published in the Official Gazette. Exports of any “excess” supply of sugar could go ahead with approval from the ministry, according to the decree.

ENERGY-

Capricorn to cut its UK headcount as it shifts focus to Egypt: The new board of oil and gas firm Capricorn Energy on Thursday said it will cut its UK workforce to less than 40 people in the next two months as it quits other markets to maximize allocations to its operations here, according to a company statement. Capricorn is set to announce the full results of its comprehensive strategic review on 27 April, the statement reads.

REMEMBER- Pressure from shareholders led by activist investor Palliser Capital led Capricorn’s former board to resign en masse back in January, killing a proposed merger with Israeli energy firm NewMed Energy.

Federal Reserve hikes interest rates by 25 bps amid banking turmoil

Fed tightens again amid banking crisis: The Federal Reserve made a second consecutive 25-bps interest rate hike at its meeting on Wednesday — but hinted that it could soon bring a halt to the tightening cycle as it tried to balance between fighting inflation and maintaining financial stability amid a global banking crisis. The increase — which is small compared to the string of jumbo increases the central bank made last year — pushed the target range of the federal funds rate to 4.75-5%, its highest level since September 2007.

The US banking system is “sound and resilient,” the Fed said in its statement, noting that the fallout from the Silicon Valley Bank (SVB) collapse could lead to tighter economic conditions and put a damper on inflation.

The Fed wasn’t the only major central bank to hike rates last week: The Bank of England raised rates by 25 bps to 4.25% on Thursday after data showed an unexpected rise in UK inflation to 10.4% in February.

US banks aren’t the biggest source of concern right now: Deutsche Bank saw its share price decline as much as 14.5% during trading on Friday as investors fretted that it could be the next domino to fall amid global turmoil in the banking sector. Shares in the “too big to fail” German lender pared some of their losses to close 8.5% down, while the cost of insuring against a default jumped to a four-year high. The plunge occurred amid a broad sell-off among European lenders: UBS — which last weekend agreed to a last-ditch takeover of teetering Credit Suisse — closed 3.6% in the red, while French giant BNP Paribas lost 5.3%.

EGX30	15,625	+2.4% (YTD: +7.0%)
USD (CBE)	Buy 30.84	Sell 30.96
USD at CIB	Buy 30.85	Sell 30.95
Interest rates CBE	16.25% deposit	17.25% lending
Tadawul	10,446	+0.9% (YTD: -0.3%)
ADX	9,503	-0.5% (YTD: -6.9%)
DFM	3,349	-0.4% (YTD: +0.4%)
S&P 500	3,971	+0.6% (YTD: +3.4%)
FTSE 100	7,405	-1.3% (YTD: -0.6%)
Euro Stoxx 50	4,131	-1.8% (YTD: +8.9%)
Brent crude	USD 74.99	-1.2%
Natural gas (Nymex)	USD 2.22	+2.9%
Gold	USD 2,001.70	-0.6%
BTC	USD 27,420	+0.1% (YTD: +66.2%)

THE CLOSING BELL-

The EGX30 rose 2.4% at Thursday’s close on turnover of EGP 1.4 bn (31% below the 90-day average). Local investors were net buyers. The index is up 7.0% YTD.

In the green: Egypt Kuwait Holding (+10.0%), Ezz Steel (+7.2%) and Sidi Kerir Petrochemicals (+6.9%).

In the red: EFG Hermes (-2.4%), Abu Dhabi Islamic Bank (-1.3%) and CIRA (-0.9%).

CALENDAR

MARCH

March: 4Q2022 earnings season.

March: IMF to review USD 3 bn program.

March: Gov’t to launch the National Governance Index.

Beginning of March: Rice to be added to the EMX.

26 March (Sunday): Senate reconvenes.

26-28 March (Sunday-Tuesday): EU Vice President Margaritis Schinas in Egypt.

27-29 March (Monday-Wednesday): The first meeting of the COP transitional committee, focusing on adaptation, and loss and damage.

30 March (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

31 March (Friday): Finance Ministry to present draft budget to House of Representative by this date.

APRIL

April: GAFIto launch the country’s first integrated electronic platform to facilitate setting up a business.

April: SCZone roadshow in China.

1 April: President Abdel Fattah El Sisi's social support measures program to be implemented.

1 April (Saturday): Deadline for banks to establish sustainability units.

2 April (Sunday): House to reconvene.

3 April (Monday): National Paints Holding’s MTO for Pachin ends.

10-16 April (Monday-Sunday): IMF / World Bank Spring Meetings, Marrakesh, Morocco.

11 April (Tuesday): Deadline for NGOs to legalize their status.

15 April: Lamees El Hadidi’s startup competition show, El Forsa, closes applications.

16 April (Sunday): Coptic Easter

17 April (Monday): Sham El Nessim.

21 April (Friday): Eid El Fitr (TBC).

25 April (Tuesday): Sinai Liberation Day.

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

30 April (Sunday): Tenth of Ramadan dry port tender deadline.

30 April (Sunday): Deadline for self-employed to register for e-invoicing.

30 April (Sunday): End of Mediterranean, Nile Delta oil + gas exploration tender.

Late April – 15 May: 1Q2023 earnings season.

MAY

1 May (Monday): Labor Day.

2-3 May (Tuesday-Wednesday): Federal Reserve interest rate meeting.

4 May (Thursday): National holiday in observance of Labor Day (TBC).

4 May (Thursday): IEF-IGU Ministerial Gas Forum, Cairo.

9-11 May (Tuesday-Thursday): First edition of the Arab Actuarial Conference, Cairo.

12 May (Friday): Expat car import scheme ends.

12-15 May (Friday-Monday): Egypt Fashion Week.

15 May (Monday): Enterprise Exports & FDI Forum, Four Seasons Hotel Cairo at Nile Plaza.

16-18 May (Tuesday-Thursday): Egypt will host its first conferenceon cybersecurity and defense intelligence systems (CDIS-Egypt).

18 May (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

20-21 May (Saturday-Sunday): eGlob Expo, St. Regis Almasa Hotel, Cairo.

22-26 May (Monday-Friday): Egypt will host the African Development Bank (AfDB) annual meetings in Sharm El Sheikh.

JUNE

7-10 (Wednesday-Saturday): The second edition of Africa Health Excon.

10 June (Saturday): Thanaweya Amma examinations begin.

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

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

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

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

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

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

30 June (Friday): June 30 Revolution Day.

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

JULY

18 July (Tuesday): Islamic New Year.

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

23 July (Sunday): Revolution Day.

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

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

Late July-14 August: 2Q2023 earnings season.

AUGUST

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

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

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

SEPTEMBER

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

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

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

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

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

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

OCTOBER

6 October (Friday): Armed Forces Day.

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

Late October-14 November: 3Q2023 earnings season.

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

NOVEMBER

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

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

DECEMBER

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

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

EVENTS WITH NO SET DATE

2023: The inauguration of the Grand Egyptian Museum.

2023: Egypt will host the Asian Infrastructure Investment Bank’s Annual Meeting of the Board of Governors in 2023.

1Q 2023: Egypt + Qatar to launch joint business forum.

1Q 2023: FRA to introduce new rules for short selling.

1Q 2023: Internal trade database to launch.

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

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

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

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

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

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

2Q 2025: Safaga Terminal 2 to initiate operations.

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