Up to 40% of AAIB for sale as CBE, Kuwait wealth fund look to sell down stakes

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WHAT WE’RE TRACKING TODAY

Egypt’s sovereign wealth fund to finalize hotels sale this year

Good morning, friends. We have a packed issue for you this morning, so we’re going to jump right in.

WATCH THIS SPACE-

#1- Gulf countries have been reticent to earmark fresh assistance for Egypt — is the war in Gaza changing how they see things? Bankers and analysts tell Reuters that the conflict may be prompting Riyadh and Abu Dhabi to rethink their shift away from no-strings-attached financial assistance packages for Egypt. Gulf countries are considering fresh assistance in the form of cash deposits and post-devaluation support for the EGP, according to two Cairo-based bankers. Monica Malik, chief economist at Abu Dhabi Commercial Bank, added that “I have felt a change in sentiment in the Gulf.”

FYI-

This isn’t the first time we’ve heard this:Chatter in the local press last month claimed Saudi Arabia and the UAE could deposit another USD 5 bn at the CBE — but we think there’s a good chance that was likely referring to the rollover of maturing portions of existing deposits.
KSA + UAE deposits already account for 60% of our FX reserves: About 85% of our USD 35 bn FX reserve stockpile is made up of deposits from Arab nations. The UAE has provided USD 10.7 bn and Saudi Arabia’s deposits stand at USD 10.3 bn.

#2- SFE to finalize hotels sale this year -Soliman: The Sovereign Fund of Egypt (SFE) will finalize the sale of a stake in a group of historic hotels by the end of the year, SFE boss Ayman Soliman told Reuters last week in New York. “They’re going to turn around those trophy assets in Egypt and with a view of taking those public as well,” Soliman said. The portfolio includes seven properties, among them the Cairo Marriott, Marriott Mena House, the Winter Palace, and the Cecil.

Refresher: The Planning Ministry said in July it had agreed to sell a 37% stake in the government’s hotels holding company to a group that includes a unit of EGX-listed hotel and real estate player TMG and unnamed foreign investors for USD 700 mn. An unconfirmed report last month claimed that the consortium will increase its stake to 51%.

FROM THE RUMOR MILL-

Euroclear talks at loggerheads? Talks between the Madbouly government and European clearinghouse Euroclear have allegedly broken down due to disagreements about the taxation of Egyptian debt, Al Borsa reported yesterday, citing unnamed sources. Euroclear requires that all bills and bonds issued by the Finance Ministry be exempt from tax, a condition that has been “categorically rejected” by the government, according to the news outlet. Egypt currently exempts foreign investors from tax on interest from local-currency debt, but imposes a 20% levy on local investors.

Remember: We have for years been in talks to make our debt “euroclearable,” a step that would make local-currency bonds more accessible to foreign investors and boost capital inflows. The government has set up a new securities depository to handle settlement of bills and bonds in what was one of the key requirements to clearing EGP debt at the Belgium-based clearinghouse.

Last we heard: Finance Minister Mohamed Maait in May voiced optimism that an agreement would be finalized by the end of the year.

HELP GAZA-

Want to support relief efforts in Gaza, but don’t know how? We’ve got you. More than 1 mn people in Gaza have been thrown from their homes and every human being there lacks access to food, water, and fuel amid the most intense bombardment any population has endured this century.

The folks at Talabat are processing donations for a range of Gaza relief appeals by charities including the Egyptian Food Bank and Misr El Kheir. Pay in EGP using your credit card.

Or check out our list of charities to which you can make direct donations via bank deposit and / or Fawry.

ELECTION 2023-

December’s presidential election is officially a four-horse raceafter the National Elections Authority allowed all of the provisional candidates onto the ballot. President Abdel Fattah El Sisi will face challenges from the Republican People’s Party’s Hazem Omar, Al Wafd’s Abdel Sanad Yamama, and the head of the Egyptian Social Democratic Party, Farid Zahran, according to a decision published in the Official Gazette on Thursday.

Remember: The nation goes to the polls on 10-12 December. Egyptian expats will vote 10 days earlier on 1-3 December. Bloomberg was among the international media outlets to give the decision some ink.

HAPPENING TODAY-

Inflation figures are due: We’re expecting the Central Bank of Egypt to be out with core inflation figures for October later today. Annual urban inflation slowed for the first time in six months in October, according to figures released by Capmas on Thursday. We have the full story in this morning’s news well, below.

The House is back in session: MPs will reconvene for two days this week. On the agenda:

Today: MPs will vote on draft laws including amendments to the Penal Code that would toughen penalties for harassment and amendments to the Child Act that would strengthen child protections.
Tomorrow:Amendments to the 2020 SMEs law will be up for a vote. The changes would grant financing handed out by the SMEs Development Agency the same exemptions and benefits afforded under the Banking Act.

ALSO-

The Intra-African Trade Fair continues at the Egypt International Exhibition Center complex.
Al Mal’s Real Estate Debate takes place at the InterContinental Cairo Semiramis.

THE BIG STORIES ABROAD-

It’s another morning with the international pages fixated on the war on Gaza and the not-so-functional US Congress, which is trying its best to avoid a shutdown when federal funding expires on 17 November. A plan put forward by newly appointed House Speaker Mike Johnson to keep the government operating for a little while longer faced harsh criticism from both sides of the House and was denounced by Democratic Senator Patty Murray as the “craziest, stupidest thing I’ve ever heard of.” (Associated Press | Reuters | Bloomberg | Financial Times | New York Times | Washington Post | WSJ)

ALSO- There are more than murmurs of dissent in the US government against the administration’s anything goes Gaza policy: Thousands of State Department and USAID officials are speaking out against the Biden administration’s Israel policy and are calling for a ceasefire, according to leaked dissent letters picked up by Reuters and Politico.

IN FINANCE NEWS- Mark Mobius is retiring. If you invest in emerging markets or serve foreign public-market investors as an investment banker, you owe Mark your job. The 87-year-old icon was one of the most high-profile leaders of the movement to make emerging markets an asset class back in the 1980s. Mark will leave Mobius Capital Partners some time in the coming months, the firm said. The news is getting wide attention in the international business press: Financial Times | Bloomberg.

MARKET WATCH-

DATA POINT- Egyptians brought 3.3 tons of gold from abroad in the six months after the government’s decision in May allowed imports of up to 150 grams of gold without any customs charges, Asharq Business reports, citing an anonymous government source.

ICYMI: Prime Minister Moustafa Madbouly decided last week to extend zero-customs exemption for gold imports until 10 May 2024 after 24 carat gold surged on Wednesday to EGP 3k per gram for the first time.

CIRCLE YOUR CALENDAR-

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

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Central Bank of Egypt, Kuwait Investment Authority to divest 40% of AAIB

BIG PRIVATIZATION NEWS- CBE to sell almost half of its stake in AAIB: The Central Bank of Egypt (CBE) and Kuwait Investment Authority (KIA) have agreed on a divestment plan that will see each of them offloading a 20%-stake in AAIB, a source with first-hand knowledge of the transaction tells Enterprise. The sale, which is expected to wrap up in 2024, will be carried out via a private placement to a strategic investor and a stake sale on the EGX, our source said.

Remember: AAIB is on the government’s list of 35 state-owned companies earmarked for privatization. It owns one of the nation’s most-respected corporate banking franchises.

Who owns what? The CBE and the KIA each own a 49.37%-stake in AAIB, with the remaining 1.26% owned by unnamed “others,” according to the lender’s latest financial statements (pdf).

Advisors: The KIA plans to reappoint Citigroup as an advisor, while the CBE wants to tap JPMorgan, Arab World Press (AWP) reports, citing a Kuwaiti government document seen by the newswire. McKinsey had previously also prepared a study for AAIB’s shareholders, our source noted.

A committee is in the works: Both parties are set to form a joint committee to oversee the sale, according to AWP. The committee will reportedly include the chairman and managing director of AAIB along with a representative from the KIA and CBE.

The KIA started looking into divesting its stake in AAIB in 2020 when it appointed Citigroup as an advisor, our source said. Local media reported in April that the KIA was seeking to up its stake in AAIB to become the lender’s biggest shareholder.

Following an investigation, Fawry denies claims of cyberattack

Investigation shows no hack at Fawry: E-payment giant Fawry said on Friday that a “comprehensive examination” of the company’s systems by the cybersecurity firm Group-IB showed no evidence its systems were breached. The company made the statement after rumors circulated on social media on Thursday that the platform had been subject to a cyberattack. “The results of the systems check confirmed that there have been no breach or leaks of any information or banking details of any of the … clients,” Fawry said in a statement (pdf).

Rumors of a hack on Thursday: Speculation that the e-payments giant had been hacked spread on social media on Thursday after cybersecurity monitors (here and here) claimed that ransomware group LockBit had made Fawry a new target. One reported that LockBit gave Fawry a 28 November deadline to meet ransom demands or it would leak hacked data on the dark web. Fuelling the flames was a screenshot of what purported to be an internal memo at an Egyptian financial institution that warned it had blocked access to the app after a breach. The authenticity of the screenshot is unproven and the cybersecurity organization released no information to back up its claim.

Fawry blames app crash: Fawry said its MyFawry services were temporarily unavailable as “a result of unprecedented customer demand exceeding the application’s capacity.” The company reassured its clients that its services are “entirely safe” to use and that no financial data had been compromised. Fawry also rebuffed the cyberattack rumors in an EGX disclosure (pdf) on Thursday, saying that the tests it ran showed no sign of breach.

CBE investigation reportedly confirms Fawry’s findings: The regulator launched an investigation that showed that no leaks occurred at Fawry, an anonymous CBE official told Asharq Business, adding that Fawry will restart its application and smart wallet services on Sunday. There has been no official statement from the CBE to confirm the information.

Founder reassures clients: “Our systems could have been attacked and we are investigating the matter … but what is certain after reviewing the systems is that no data were hacked or withdrawn,” CEO and founder of Fawry Ashraf Sabry told Asharq Business. He also downplayed the need for customers to delete their card data or the MyFawry app.

AAIB walks back attack warning: AAIB issued an alert stating that “no cyberattacks or exposing of personal identifiable information of Fawry customers has been confirmed,” reported Business Today Egypt.

LockBit hits world’s largest bank, Boeing:Bloomberg reported Thursday that the Industrial and Commercial Bank of China — the world’s largest bank — was hit with a cyberattack thought to be committed by LockBit. The cybercrime gang also published internal data belonging to Boeing on Friday after the US defense giant refused to pay ransom in response to a hack in October, according to Reuters.

Market reax:The rumors triggered a selloff of Fawry shares Thursday, which lost 4.6% during the session.

Egypt inflation eases for the first time in five months in October, slower than analyst expectations

It’s been a while since we’ve had good inflation news: Annual urban inflation in October eased for the first time in six months on the back of slowing food and beverage price inflation. Consumer prices in urban areas decelerated to 35.8% y-o-y from 38.0% in September, marking October as the first reprieve since April, according to figures released yesterday by state statistics agency Capmas. Headline inflation has been running above 30% since February on the back of a series of currency devaluations and the FX crunch.

The figure came in lower than expected: The median forecast in a recent Reuters poll saw annual inflation easing to 37.1%. Analysts in a CNBC poll, however, predicted an acceleration of between 0.5-1.5%.

What to look for next: Core inflation figures are due out today from the central bank.

We were also none the wiser: Analysts w e spoke with were split on which way the inflation figures would go, with some worrying that the parallel market would continue to put pressure on prices and others believing the Madbouly government’s curbs on key food items would pay dividends.

You can thank food and beverage prices: Food and beverage prices — the largest components of the basket of goods and services used to calculate inflation — slipped to 71.3% y-o-y from a record high of 73.6% in September. This is the first time food inflation has slowed since April.

What changed? The government agreed with private food producers to cut prices of 10 key food items by 15-25% from the middle of October in a bid to reel in inflation.

Monthly inflation figures are also back on a downward trend: October put monthly inflation back on a downward trend, coming at 1.0%, down from 2.0% in September.

The intensifying FX crunch means this isn’t over -Goldman: “The weakening of the EGP in the parallel market suggests broader upward pressure on domestic prices going forward,” Goldman Sachs analysts wrote in a report picked up by Bloomberg. “This is likely to keep real interest rates deep in negative territory in the months to come” and necessitate further interest rate hikes.

Remember: The EGP has weakened to record lows against the greenback in the parallel market in recent weeks as pressure builds on the currency. The currency was trading at 48.0 to the USD compared to the 30.9 official exchange rate on Thursday, according to traders.

The international press also has the story:Reuters | Bloomberg.

Elsewedy Capital and Ezz El Arab Automotive team up to locally assemble cars

The push to localize our automotive industry continues: Elsewedy Electric sister company Elsewedy Capital and automotive group Ezz El Arab have launched a joint venture that will assemble petrol and electric vehicles, according to a statement (pdf) released yesterday. Ezz Elsewedy Automotive Factories (ESAF) will receive more than USD 15 mn of investment and aims to assemble 50k Proton-branded petrol cars and EVs annually in the “coming years,” the statement added. The firm will offer the vehicles “competitive prices” in the Egyptian market and export some abroad.

The project is already getting some support from the state’s push to localize the auto industry: The Madbouly government’s Egyptian Automotive Industry Development Program (AIDP) pushed forward with its plan to localize our automotive industry by signing three separate agreements between state bodies and the ESAF and two other local private sector companies to further cooperation on developing car assembly plants, according to a cabinet statement on Thursday.

ICYMI: Proton was said to have been exploring a partnership with state-owned El Nasr Automotives to explore the feasibility of producing cars in Egypt in 2020.

We also got an update on EGX-listed GB Corp’s Sadat City auto factory in the works: One of the other private-sector companies that signed framework agreements, GB Corp, is currently building an auto factory in Sadat City. The EGP 2 bn factory is currently under construction and is expected to reach an annual capacity of 50k cars, according to GB Corp’s chief manufacturing officer Ramez Adeeb, who attended the signing.

ALSO IN AUTOMOTIVE NEWS:

AfreximBank earmarks USD 1 bn for Africa’s auto makers, local players want in: The African Export-Import Bank (AfreximBank) plans to allocate a USD 1 bn package to support distributors and auto parts makers across the African continent, reports Al Borsa, quoting Afreximbank trade facilitation manager Gainmore Zanamwe’s comments to the Middle East News Agency. He noted that several local auto players filed requests to be among the recipients, and that the lender is studying all requests before giving its final approval before the end of the year.

Mercedes-Benz EVs hit the Egyptian market

Mercedes EVs just hit the market: German carmaker Mercedes-Benz has released a lineup of electric vehicles in Egypt, it said in a statement (pdf). The lineup includes a range of sedans and SUVs powered by “batteries with significantly higher energy and efficiency.” Mercedes Egypt’s website has a detailed rundown of the EV models and their specs.

What’s on offer: EQS, EQE and EQB SUVs in addition to sedans.

Where to find them: The cars are available at five Mercedes’ authorized distributors — Abou Ghaly Motors, Alexandria National Automotive (ANA), Ezz Elarab Star, German Auto Service (GAS), and Star National Automotive (SNA). Each of the distributors will have their own price list for the new cars.

Arab, Muslim leaders condemn Israel but fail to agree on Gaza war response

More talk, little action:Arab and Islamic nations repeated calls for an immediate ceasefire in Gaza but failed to agree on measures against Israel at an emergency summit in Riyadh yesterday. In a joint statement, the 57 nations reiterated condemnations of Israel’s actions and rejected its justification of self-defense but could not agree on more punitive measures put forward by countries such as Lebanon and Algeria, which called for severing diplomatic ties and threatening an oil embargo. The statement also called on the UN Security Council to pass a resolution condemning Israel’s actions, for the International Criminal Court to investigate potential war crimes committed by the IDF, and for an arms embargo on the country.

There were signs of internal divisions among Arab states earlier in the weekend: At an Arab League meeting the day before, divisions among its members prevented a unified diplomatic response, as four “influential countries” vetoed proposed measures against Israel, according to Al Araby Al Jadeed. The 57-nation summit combining the league with the Organization of Islamic Cooperation was reportedly a last-minute attempt to smoothe over differences and create a more unified regional response, the report claims.

The fault lines:Those listed as in favor of the proposals — which reportedly included freezing relations with Israel and threatening economic sanctions — were Palestine, Syria, Algeria, Tunisia, Iraq, Lebanon, Kuwait, Qatar, Oman, Libya and Yemen. The four countries who voted against and the seven who abstained were not named.

EGYPT WARY OF US-LED INITIATIVES-

El Sisi rejects CIA’s Gaza security proposal: El Sisi rejected a proposal from CIA director William Burns during his visit to Cairo last week that would have seen Egypt manage security in Gaza until the Palestinian Authority takes over control, the Wall Street Journal reported, citing unnamed senior Egyptian officials. The president reportedly refused to help destroy Hamas because they play a role in maintaining border security with Egypt, according to the officials cited by the outlet.

Egypt worried US and Israeli-approved safe zones, humanitarian corridors will lead to mass displacement: Safe zones and humanitarian corridors green-lighted by Israel on Thursday after talks with US officials are “deceitful” and will be used to displace thousands of Palestinians, an unnamed Egyptian official reportedly told Al Araby Al Jadeed over the weekend. This stance has been made clear to the US, the unnamed official added.

OTHER DIPLO- Iranian President Ibrahim Raisi became the first Iranian leader to visit KSA in more than a decade, meeting with Crown Prince Mohamed bin Salman and El Sisi among others | El Sisi also held talks with the leaders of Jordan, Turkey, Saudi Arabia, and Qatar among others | French president Emmanuel Macron became the first Western leader to call for a ceasefire | Hezbollah chief Hassan Nasrallah said Saturday that the armed group had started to strike Israel with more powerful missiles and new weapons.

HOSTAGES- Egypt + Qatar mediating hostage handover for temporary ceasefire: Egypt and Qatar are in talks with Hamas leaders to broker an agreement that would see the group release 15 hostages in return for a two-day ceasefire, the Wall Street Journal reported yesterday, citing Egyptian security officials. Hamas has reportedly agreed to the arrangement, but Israel and the US are continuing to hold out, the sources reportedly told the newspaper. Hamas leader Ismail Haniyeh was in Cairo on Thursday for talks with Egyptian intelligence chief Abbas Kamel, Al Araby Al Jadeed reported. Ahram Online picked up the report.

AID- NGOs, and Arab and Western countries attended a Gaza donor conference in Paris on Thursday | Countries have pledged EUR 1 bn, though this includes some funds that were previously announced | Turkey has sent an aid ship carrying field hospital equipment, generators and ambulances to Gaza.

ON THE GROUND- Israeli troops continue ground offensive, closing in on hospitals in Gaza City: There have been reports of intense fighting in the Gaza City neighborhoods of Al Nasr, Al Shati camp and Al Shifa Hospital over the weekend as Israeli forces advance. Tens of thousands of Palestinians fled south after the Israelis agreed to a daily four-hour pause in the fighting. Hamas says it has destroyed over 160 Israeli military targets in Gaza; the Israeli military has confirmed the death of 45 Israeli soldiers since the beginning of the ground invasion two weeks ago.

Gaza City hospitals face “relentless bombardment”: Several major hospitals sheltering thousands of refugees came under heavy bombardment by Israeli forces over the weekend, according to organizations on the ground and the World Health Organization. The Palestinian Red Crescent said Israeli snipers and artillery were targeting the Al Quds Hospital, which is housing 14k people, and that the intensive care unit had come under attack. Al Shifa Hospital — the largest health facility in Gaza and where Israel claims Hamas has its HQ — has been shelled multiple times, according to MSF, and on Saturday evening ran out of fuel, causing the death of two premature babies and endangering a further 37-40 babies relying on incubators. About 1.5k patients remain in the complex, as well as 1.5k medical personnel and 15-20k people seeking shelter, the Gaza Health Ministry spokesperson told Al Jazeera.

YESTERDAY IN NUMBERS-

11,078: The number of Gazans who have been killed by the Israeli military since 7 October. Almost half of the dead are children. (Reuters)
Caveat: The real death toll is likely “higher than is being cited” by Gaza’s Health Ministry, a senior Biden administration official told a House panel last week. President Biden and other officials have publicly accused the ministry of inflating the figures. (The Hill)
27,000+: The number of Gazans that have been wounded in the violence. (Palestine Health Ministry)
1,200: The revised figure for the number of Israelis killed in Hamas’ attack on 7 October. Israel previously believed 1,400 had been killed in the attack. (Reuters)
55%: The percentage of Gaza hospitals’ that have been forced to stop operating because of the conflict. (Financial Times)

Madinet Masr’s earnings more than double in 9M 2023 on record sales

Madinet Masr had a strong year so far: EGX-listed Madinet Masr’s bottom line soared 149% y-o-y to EGP 1.4 bn in the first nine months of 2023 on the back of record sales, according to the real estate developer’s earnings release (pdf). The company’s revenues rose 48% y-o-y to EGP 4.4 bn during the same period.

A solid quarter: The company saw its net income up 151% y-o-y to EGP 773.2 mn in 3Q 2023, while its revenue climbed 85% to EGP 2.2 bn.

Sales skyrocketed: Gross contracted sales hit a record EGP 14.9 bn in 9M 2023, up 122% y-o-y. Nearly 69% of the sales were at the company’s Taj City project, with Sarai generating the remainder. The company sold a total of 2.6k units in 9M 2023, up 15% y-o-y.

The developer is on track for a record year: Madinet Masr last month predicted that gross contracted sales would exceed EGP 20 bn by the end of 2023.

Deliveries dipped: Madinet Masr deliveries dropped 29% y-o-y to 792 units during 9M 2023 due to a higher inventory of move-in ready units in the comparable period in 2022, the company explained.

SOUND SMART- In real estate, sales ≠ revenues. Most real estate companies book a sale when you sign a contract to buy a home, but only record (some or all) of the value of the unit they sold when they (a) deliver the unit to you or (b) hit a percentage of completion of the overall project. Therefore, in most cases, revenues are composed of sales from past periods, while sales in a given quarter will be recognized as revenues in the future when units are completed or delivered.

Afreximbank appoints new executive vice president of global trade

Afreximbank welcomes new VP of global trade: The African Export-Import Bank (Afreximbank) has appointed Haytham ElMaayergi (LinkedIn) as its executive vice president of global trade bank, succeeding Amr Kamel, the bank said. ElMaayergi has over 26 years of experience working with a number of regional and multinational banking institutions — Arab African International Bank, Abu Dhabi Islamic Bank, Standard Chartered, and Citibank.

Riyadh’s Islamic-Arab summit dominated the airwaves

All eyes were on Riyadh last night, as the nation’s talking heads shifted their attention from on-the-ground updates in Gaza to the Islamic-Arab League summit that took place in the Saudi capital yesterday. The summit concluded with a joint statement calling for the immediate end to the war and a rejection of Israel’s justification for the war as self defense. We have the full story in this morning’s War Watch, above.

Palestinians aren’t happy with the outcome of the summit: “The outcome represents the bare minimum of what is necessary — putting an end to the violence and the forced displacement of Gazans. The decisions are good, they represent a strong Arab-Islamic stance, but they are missing political will,” senior PLO official Ahmad Majdalani told Kelma Akhira’s Lamees El Hadidi (watch, runtime: 6:52). “The decisions will remain without action, just like all the previous Arab and Islamic decisions taken,” he added, explaining that Arab leaders need to go to the UN Security Council and push to end the war and forced displacement of Gazans. “The outcomes of the summit did not live up to the aspirations of the Palestinian people … the ongoing violence requires more Arab efforts,” head of the Palestinian Authority's Commission for Detainees' Affairs Qadura Fares told Al Qahera News (watch, runtime: 7:18). The summit received coverage from Masa’a DMC (watch, runtime: 4:55), El Hekaya (watch, runtime: 1:55), and Ala Maso’uleety (watch, runtime: 3:48).

El Sisi meets with Iranian and Turkish counterparts:On the sidelines of the Islamic-Arab summit, President Abdel Fattah El Sisi met with his Turkish counterpart Recep Tayyip Erdogan and Iranian President Ebrahim Raisi. “Egypt’s relationship with Turkey is developing. There are mutual steps to resume efforts of restoring relations,” presidential spokesperson Ahmed Fahmy told El Hekaya’s Amr Adib (watch, runtime: 2:10). The meeting with Raisi centered around the situation in Gaza, Fahmy said (watch, runtime: 1:36).

AND- It’s as if Masa’a DMC knew Enterprise would be tuning in: Masa’a DMC hosted (watch, runtime: 4:51) professor and economist Sherif Delawar who laid out the history of Egypt’s relationship with the USD and the root of our FX crisis.

TAQA Arabia launches Tanzania’s first CNG station. PLUS: News from Capricorn Energy, NERIC, Samcrete, Cashcall

ENERGY-

#1- TAQA Arabia launches its first CGN station in Tanzania: Qalaa Holdings’ TAQA Arabia has inaugurated its first compressed natural gas (CNG) filling station and conversion center in Tanzania — under its Master Gas brand — the company said in a statement (pdf). The station will fuel up to 800 vehicles a day. TAQA Arabia and holding group Janus Continental have partnered on TAQA Dalbit, which aims to build 12 stations in Tanzania at a cost of USD 10 mn over the next few years.

#2- Capricorn Energy wants better terms for its Egypt contracts: British oil and gas firm Capricorn Energy is in talks with the Egyptian General Petroleum Corporation (EGPC) over better terms, Reuters reported, without providing any details. The company will be publishing its operational update in early 2024, instead of 30 November, as originally planned “due to a number of factors including completing the required technical and commercial work to provide a comprehensive and detailed portfolio update,” the company told Reuters.

Remember: Capricorn’s new leadership is scaling back the company’s operations to focus only on Egypt and putting a new focus on dividend payouts. Its former board was ousted earlier this year by activist investors who weren’t happy with plans for a merger with Israel’s NewMed Energy. The company will pay out USD 575 mn to shareholders this year despite a rise in receivables outstanding from Egypt.

M&A WATCH-

Gulf investors want in on local rebar steel manufacturer: A Saudi-Emirati investment fund will acquire a 50% stake in local rebar steel manufacturer Al Refaey Steel in a USD 200 mn transaction, chairman Hisham El Refaey told Al Borsa on Thursday. The fresh investment will go towards expanding the company’s production capacity and setting up a plant for billet production in the Suez Canal Economic Zone — the production from both will go towards exports. The two sides have inked an initial agreement, with the final contract to be signed mid-November.

MANUFACTURING-

#1- Gov’t looks at Russian, Chinese firms to locally manufacture railcars: The National Egyptian Railway Industries Company (NERIC), a joint-venture between the state and the private sector, is negotiating with Russia’s Transmashholding and China Railway Construction Corporation (CCRC) to produce 500 railway cars in NERIC’s Port Said factory, sources reportedly told Al Borsa. The Transport Ministry was going to award the contract to Hungarian firm Ganz Motor, but it held off on finalizing the agreement until it received more offers that meet its new requirement of a 70% minimum local component quota.

Both companies are familiar with the local market: Transmashholding has previously supplied Egypt with a number of railcars, as part of an EGP 22 bn contract. The company is also providing technical support and spare parts for the delivered railcars. Meanwhile, CCRC is reportedly part of a consortium bidding for the first phase of the USD 23 bn high-speed electric rail network.

A lot of railway news: The news comes shortly after the TransMEA 2023 transport expo wrapped up. The expo saw Egypt ink a long list of agreements on maritime, logistics, and land transport.

#2- Updates on IDG’s upcoming projects: Samcrete Holding’s industrial arm, Industrial Development Group (IDG), will submit financial and technical offers for the new Beni Suef dry port it is developing and operating in cooperation with Alexandria-based logistics company Star Shine Shipping & Logistics (SSSC) during 1Q 2024, Samcrete’s Chief Investment Officer Refky Kamel told Al Mal. IDG will invest some USD 160 mn developing the 61-feddan port, Kamel said, saying earlier reports the facility would cost USD 500 mn were untrue. IDG will also work with SSSC on a planned 2-mn square meter industrial complex in New October City. The company was awarded the land for the complex in March.

FINTECH-

Local fintech platform Cashcall plans to step into new markets, including the UAE and Pakistan, having already inked strategic partnerships with fintech players there, cofounder and CEO Ahmed Mahrous told Al Mal. Mahrous didn’t provide any details on the planned expansion.

About Cashcall: The fintech platform started operation in 2018. It offers a range of e-payment services, including Cashless — a service catered for gated communities — and Open Finance — a platform that allows the unbanked access NBFS.

FINANCE-

Future cooperation between the Egyptian and Saudi FinMins?The Egyptian and Saudi Finance Ministries inked an MoU to boost cooperation, that includes launching a high-level dialogue between the two sides and exploring areas of cooperation, according to a Finance Ministry statement.

Moody’s lowers US credit rating outlook on the back of debt affordability concerns

Bad news for the US as Moody’s lowers credit rating outlook:Rating agency Moody’s downgraded its outlook on the US’ sovereign credit rating to negative from stable on Friday, reports Reuters. The move was driven by rising fiscal deficits and Treasury yields reaching 16-year highs placing pressure on debt affordability. "It is hard to disagree with the rationale, with no reasonable expectation for fiscal consolidation any time soon," Natixis head economist Christopher Hodge said. "Deficits will remain large ... and as interest costs take up a larger share of the budget, the debt burden will continue to grow."

Remember: Fitch Ratings downgraded the US’ sovereign credit rating from A AA to AA+ in August, citing future fiscal challenges and questions over whether a dysfunctional Congress will continue to be able to raise the debt ceiling when needed.

No change on the horizon: The downgrade was driven by the “continued political polarization” in Congress that looks unlikely to break anytime soon, wrote Moody’s in a statement. "Any type of significant policy response that we might be able to see to this declining fiscal strength probably wouldn't happen until 2025 because of the reality of the political calendar next year," Moody’s senior vice president William Foster told Reuters in an interview.

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Euro Stoxx 50	4,197	-0.8% (YTD: +10.6%)
Brent crude	USD 81.43	+1.8%
Natural gas (Nymex)	USD 3.03	-0.3%
Gold	USD 1,937.70	-1.6%
BTC	USD 36,982.95	-0.9% (YTD: +123.9%)

THE CLOSING BELL-

The EGX30 rose 1.4% at Thursday’s close on turnover of EGP 4.43 bn (75.9% above the 90-day average). Local investors were net buyers. The index is up 66.5% YTD.

In the green: CIB (+4.1%), Telecom Egypt (+3.8%) and Edita (+3.5%).

In the red: Fawry (-4.6%), E-Finance (-3.8%) and Credit Agricole (-2.7%).

CALENDAR

NOVEMBER

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

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

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

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

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

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

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

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

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

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

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

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

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

Signposted to happen some time in November:

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

DECEMBER

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

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

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

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

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

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

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

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

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

Signposted to happen sometime in December:

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

EVENTS WITH NO SET DATE

2023: The inauguration of the Grand Egyptian Museum.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

2Q 2025: Safaga Terminal 2 to start operations.

2024

JANUARY

7 January (Sunday): Coptic Christmas.

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

25 January (Thursday): Revolution day.

FEBRUARY

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

APRIL

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

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

MAY

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

5 May (Sunday): Coptic Easter.

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

29 May (Wednesday): Chicago Booth Executive Program

JUNE

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

30 June (Sunday): June 30 Revolution Day.

JULY

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

23 July (Tuesday): Revolution Day.

SEPTEMBER

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

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

OCTOBER

6 October (Sunday): Armed Forces Day.

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