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Wednesday, 10 Jan 2024

What We're Tracking Today
Economy
M&a Watch
Investment Watch
War Watch
Kudos
Last Night’s Talk Shows
Also On Our Radar
Planet Finance
Diplomacy
Hardhat
Calendar

World Bank downgrades Egypt’s GDP growth for FY 23/24 to 3.5%

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Today at a glance

1

Economy

World Bank downgrades Egypt’s GDP growth for FY 23/24 to 3.5%.
2

What We're Tracking Today

Is the state’s privatization list set to triple with 61 new additions?
3

What We're Tracking Today

Officials meet with IMF head and US Treasury secretary in Washington for loan talks.
4

M&A WATCH

Ezdehar acquires majority stake in apparel player behind Dalydress and Premoda.
5

Investment Watch

Maxim Investment Group will set up Egypt’s first medical resort.
6

DEBT WATCH

Halan closes EGP 917.5 mn securitized bond issuance.
7

Also on our Radar

Centamin sees “encouraging” results from maiden drilling expedition in the Eastern Desert.
8

PLANET FINANCE

Saudi Arabia raises USD 12 bn in largest bond sale since 2017.
9

HARDHAT

A look through gov’t targets for the infrastructure sector over the next six years.

Wednesday, 10 Jan 2024

What We're Tracking Today
Economy
M&a Watch
Investment Watch
War Watch
Kudos
Last Night’s Talk Shows
Also On Our Radar
Planet Finance
Diplomacy
Hardhat
Calendar
1

What We're Tracking Today

The state’s privatization program might be tripling in size

Good morning, folks. We’ve got a chockablock issue with a bit for everything for everyone today, so let’s jump right into it.

PSA- EnterpriseAM Egypt is off tomorrow. We’re heading out to a company offsite today before we come back tomorrow to tool up ahead of the official launch of EnterpriseAM UAE next week.

If you haven’t already: Sign up for the UAE edition here. Our report, produced in the UAE and in Cairo, is written for decision makers in the UAE as well as executives, investors, and others doing business or deploying capital there.

EnterpriseAM UAE is available to you without charge thanks to the generous support of our friends at Mashreq and is published by 7am UAE time Monday through Friday.

** THAT’S NOT ALL: EnterpriseAM Saudi Arabia is launching later this month. You can sign up here to let us know you’d like to be on the list on launch day. More details soon.

HAPPENING TODAY-

El Sisi attends tripartite summit in Jordan: President Abdel Fattah El Sisi is set to meet with Jordan’s King Abdullah II and Palestinian Authority President Mahmoud Abbas todayin the Red Sea city of Aqaba for a summit to discuss pushing for a ceasefire in Gaza and increasing the delivery of humanitarian aid, the Egyptian State Information Service and Jordanian News Agency reported.

HAPPENING TOMORROW-

Blinken in Cairo: US Secretary of State Anthony Blinken is expected to touch down in Cairo on Thursday after meeting officials in Ramallah the day before, if the State Department’s itinerary holds. Blinken has been in the region since 4 January — his fourth trip since the outbreak of the war — and has so far touched down in the UAE, KSA, Israel, Qatar, Turkey, Greece, and Jordan.

WATCH THIS SPACE-

#1-Is the state’s privatization list set to triple? The government has identified some 61 additional state-owned companies that it plans to add to the state’s privatization list and exit via stakes sales to either strategic investors or through EGX offerings, reports Al Borsa, citing unnamed sources. While they did not name the new companies, the sources said that priority will be given to four main sectors: airports, telecommunications, banking, and ins.

ICYMI: The Madbouly government — with assistance from the International Finance Corporation (IFC) — has been looking into 50 state-owned companies not currently in the program to determine which sectors would be more attractive and lucrative for investors.

#2 AIB could be on the list: The government is considering exiting its stake in the Arab International Bank and is in the process of appointing financial advisors in order to do so, Al Borsa writes, citing unnamed sources. The government is looking into exiting a second unnamed bank at the same time, with Al Borsa’s sources saying that the banking sector is expected to see a number of transactions in 2024. No further details regarding the value of the share the government expects to exit or the recipient were included.

THE BIG STORY HERE AT HOME-

US Treasury secretary says that they’ve got our back in meeting with Egyptian officials: US Treasury Secretary Janet Yellen met with CBE Governor Hassan Abdalla, Finance Minister Mohamed Maait, and International Cooperation Minister Rania Al Mashat in Washington yesterday, the US Treasury Department said in a statement yesterday. Yellen emphasized the US’ support for Egypt’s economic reform program and “underscored the goal of bolstering Egypt’s economy and supporting inclusive, sustainable growth.”

AND- We might be in store for some big IMF news soon: The state-side Egyptian delegation also met with IMF Managing Director Kristalina Georgieva, according to a post by Georgieva on X that we caught in the early hours of this morning. News of what was said at the meeting is yet to emerge.

The int’l press gave the meeting some ink: Reuters

BIG STORIES ABROAD-

There’s no single big story dominating the global business press this morning. Among the headlines you need to know about:

#1- The World Bank thinks global growth is going to slow in 2024, writing in its semiannual Global Prospects report that the world’s GDP will grow 2.4% this year, down from 2.6% last year and 3% in 2022. A slowdown in trade and geopolitical tensions are among the factors weighing on sentiment. We have a look at the bank’s outlook on Egypt in this morning’s news well, below.

#2- BTC rose sharply yesterday after a hack of the SEC’s account falsely claimed that the US securities regulator had approved BTC exchange-traded funds.

#3- Boeing’s CEO, facing a growing crisis, says the company needs to own “our mistake”as airlines and regulators around the world order safety inspections of the 737 Max model after last week’s incident at Alaska Airlines.

#4- Asset manager BlackRock is laying off 600 people, or about 3% of its global workforce. The firm still thinks its headcount will grow this year as it adds staff at its ETF and private markets businesses. You can read the full memo here.

AND- France has a new prime minister. Gabriel Attal, the popular education minister in the previous cabinet, is the youngest (34) and first openly gay PM in France’s history.

RED SEA WATCH-

Oil and fuel tankers continue to move through the Red Sea despite a spike inshipping costs and ins. premiums due to the repeated vessel attacks from Yemen’s armed Houthi group, according to Reuters. A daily average of 76 oil and fuel tankers crossed the Red Sea and Gulf of Aden last month, only three fewer than the daily average for the first 11 months of 2023.

The why: Despite the rise in costs, the Red Sea route remains far cheaper than a reroutearound the Cape of Good Hope. It is also likely that oil tankers don’t view the Houthi attacks as a threat, seeing as the Houthis have so far only attacked non-petroleum vessels, according to the newswire.

CREDIT WHERE CREDIT IS DUE

Egyptian Journalists’ Syndicate gives 2024 Press Freedom Press Award toPalestinian journalist Wael Al Dahdouh,the bureau chief of Al Jazeera in Gaza, in recognition of his role during the ongoing war on Gaza, the syndicate said in a statement. Al Dahdouh has continued to report on the Israeli war, despite his wife, three children, and one grandchild having been killed in Israeli strikes since October.

MORNING MUST READ-

China is shrinking: A weakening economy and covid-related deaths have likely causedChina’s population to drop for the second consecutive year in 2023 — estimates put the number of new births in 2023 below the 9.56 mn figure recorded a year prior — Reuters reports. China’s birth rate has been in decline since 2016 as the country struggles with gender inequality, high child care expenses, youth unemployment, low wages, and an ongoing property crisis.

CIRCLE YOUR CALENDAR-

More international oil, gas, and gold exploration tenders are on the horizon: The government aims to launch new international tenders for oil, gas, and gold exploration this year, with a new gold tender slated for the second half of the year, Oil Minister Tarek El Molla told Asharq Business on the sidelines of the Future Minerals Forum in Riyadh.

ICYMI- A government source in October told us that the ministry plans to launch an internationalbid round for the exploration of gold and minerals in 13 concessions in Shalateen and Aswan in early 2024.

Pulse check on our gas production: Egypt’s average daily natural gas production hit 5.8 bn cubic feet per day in 2023, El Molla said. That’s 6.8% less than the 6.2 bn cubic feet we produced per day in FY 2022-2023.

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

*** 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 take a look at the government’s ambitious targets for infrastructure andenergy exports for the next six years — undertaking water security, boosting oil and gas exports, and tackling unplanned areas.

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2

Economy

World Bank downgrades Egypt’s GDP growth for FY 23/24 to 3.5%

The World Bank has downgraded its Egypt growth outlook for the current fiscalyear due to the country’s ongoing economic problems, according to figures in its Global Economic Prospects reports (pdf). The lender expects real GDP growth to slow to 3.5% in FY 2023-2024, down 0.2% from its last forecast in October, when it penciled in growth of 3.7%. Growth is forecast to accelerate to 3.9% in FY 2024-2025.

It’s in line with other international monitors: The IMF and S&P Global penciled in 3.5-3.6% growth in FY 2023-24 late last year. The EBRD and Morgan Stanley are slightly more optimistic and set growth expectations between 4.2-4.5%.

While the government is even more optimistic: The Madbouly government sees the economy growing at a 4.7% clip in the coming fiscal year, from an estimated 3.0% in FY 2023-2024 and 4.2% the year before.

A regional conflict could further hit Egypt’s economy: “The conflict in the Middle East will likely exacerbate the inflation problem, eroding households’ purchasing power and constraining activity in the private sector,” the lender wrote. A heightened conflict will “intensify pressures on external accounts through implications on tourism, remittances, and oil trade balance.”

We’re still expected to be one of the top performers in the region for FY 23/24: The only countries with stronger projected growth rates for FY 23/24 are Libya (14.1%), Djibouti (4.7%), and Iran (4.2%).

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3

M&A WATCH

Egyptian private equity firm Ezdehar Management acquires 80%+ stake in apparel company behind Dalydress and Premoda

Ezdehar acquires majority stake in local apparel player: Local private equity firmEzdehar Management has purchased above 80% stake in clothing company SETA Textiles — the company behind clothing brands Dalydress and Premoda — Ezdehar Private Equity Principal Farah El Agami told Enterprise. She refused to disclose the value of the transaction.

About the acquisition: The investment came through the Ezdehar Egypt Mid-Cap Fund II, which counts among its limited partners the European Bank for Reconstruction and Development, International Financing Corporation, European Investment Bank, and others, Ezdehar said in a press release (pdf). The acquisition includes a primary capital investment in SETA Textiles to aid the company’s plans to expand both in Egypt and overseas.

Expansion on the horizon: On the local front, the company aims to increase its branches,expand its online reach, and diversify its products in the apparel sector, El Agami said. SETA is also looking to expand overseas — either by opening branches abroad through partnerships and franchises and through online marketplaces. The company also wants to expand its existing presence in Saudi Arabia before expanding to other Gulf nations and potentially a number of African countries, she added.

The acquisition could open the door for more apparel investments: “The current macroeconomic challenges and growing demand for local brandshave made the local apparel market an attractive one for investment in general. Ezdehar could look to acquire more players in the market through SETA in the future,” El Agami told us.

Ezdehar is looking to invest some USD 70 mn this year across various sectors that include manufacturing, healthcare, retail, technology, and others, El Agami said. Ezdehar will unveil more investment news “very soon,” she added.

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4

Investment Watch

Maxim Investment Group will set up Egypt’s first medical resort

A potential boost for medical tourism in Egypt: Maxim Investment Group will setup Egypt’s first medical and health resort — an EGP 1.5 bn project under the name Naya Wellness Resort — in the El SafInvestmentZone in Giza governorate, according to an agreement inked between the group, the General Authority for Investment and Free Zones (GAFI), and the authority’s Misr Investment for Development.

In detail: Maxim will develop, manage, and operate the 40-feddan resort, which is set to providesome 4.5k job opportunities when fully operational. Naya Wellness will house the typical medical facilities — medical clinics, laboratories, and cosmetic clinics — as well as hotels, restaurants, and spaces for hosting events and workshops.

What they said: “The project is the first of its kind in Egypt … [well-positioned to be] a globaldestination for medical tourism, ensuring a sustainable influx of foreign currency," Maxim Chairman Mohamed Karrar said.

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Halan brings EGP 3 bn securitization program to a close: Halan, the consumerfinance arm of MNT-Halan, has closed an EGP 971.5 mn securitized bond issuance, the third and final of an EGP 3 bn securitization program, the company said in a statement (pdf). The six-tranche issuance is the first corporate securitization in 2024.

Remember: Halan closed the second issuance in the program worth EGP 1.04 bn inSeptember of last year and the first EGP 978 mn issuance in December 2022.

Advisors: CIB was the financial advisor, transaction manager, arranger, promoter andbookrunner. Matouk Bassiouny served as counsel, Hazem Hassan — KPMG’s Egypt branch — as auditor, and GB’s Capital for Securitization as custodian.

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5

WAR WATCH

The war on Gaza enters its 95th day

There’s plenty of scrambling around, but little new to report on diplomatic efforts to end the war in Gaza. Here’s what you need to know:

#1- Egypt’s priority right now is brokering a ceasefire — and will look at post-war reconstruction and security issues further down the road, Reuters reports, citing a mix of unnamed Egyptian and Israeli sources.

#2- Israel isn’t getting more oversight of the 13-km buffer zone between Egypt and Gaza, the newswire adds.

#3- US Secretary of State Antony Blinken thinks Arab countries could consider taking part in the “reconstruction and governance” of Gaza when the war ends, Associated Press reports. The newswire says Blinken namechecked Saudi, Jordan, Qatar, the UAE and Turkey — all countries he has visited so far.

#4- No Arab country has made a commitment to do anything in Gaza despite persistent efforts in some Western circles (particularly in corners of DC) to shape a narrative that gives Saudi and the UAE responsibility for funding whatever happens post war, while Egypt and Jordan provide security.

#5- Blinken reportedly told Israeli leaders yesterday that the road to normalization with the Arab world runs through recognition of a viable Palestinian state. Blinken’s regional tour continues today, and he’s expected in Egypt tomorrow.

#6- Israel is stepping up its bombing of Syria and Hezbollah targeted an Israeli base in northern Israel yesterday.

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6

Kudos

Egyptians aplenty on the Forbes’ top 100 Mideast CEOs list

Forbes is out with its annual ranking of the Middle East’s top 100 CEOs — and 20 Egyptians have made the cut:

#10 - Hatem Dowidar, CEO of e&

#15 - Osama Rabie, chairman and managing director of Suez Canal Authority

#18 - Yasser Zaghloul, CEO of NMDC Group

#20 - Ahmed Galal Ismail, CEO of Majid Al Futtaim Holding

#25 - Hisham Okasha, executive chairman of the National Bank of Egypt

#37 - Hisham Talaat Mostafa, CEO and managing director of Talaat Moustafa Group Holding

#40 - Mohamed El Etreby, chairman of Banque Misr.

#44 - Hussein Abaza, CEO and managing director of CIB

#46 - Othman A. Ibrahim, CEO of Rawabi Holding.

#47 - Mohamed Nasr Eldin, CEO and managing director of Telecom Egypt.

#49 - Osama Bishai, CEO of Orascom Construction.

#51 - Sherif Beshara, CEO of Mohamed & Obaid Almulla Group and American Hospital Dubai.

#54 - Karim Awad, Group CEO and executive committee chair at EFG Holding.

#57 - Ahmed Abdelaal, CEO of Mashreq.

#58 - Bassel Gamal, CEO of Qatar Islamic Bank

#65 - Tarek Youssef Hosni, CEO of Jamjoom Pharma.

#68 - Said Zater, CEO and managing director of Contact Financial Holding.

#83 - Tarek El Sayed, CEO and managing director of Al Rayyan Tourism Investment Company (ARTIC).

#88 - Omar El Hamamsy, CEO of Orascom Development Egypt

#89 - Khaled Abbas, chairman and managing director of the Administrative Capital for Urban Development (ACUD).

AND-Palm Hills is Egypt’s first 2024 Olympics sponsor: Our friends at real estate developer Palm Hills Development have signed a EGP 30 mn sponsorship contract with the Youth and Sports Ministry to support Egyptian athletes at the 2024 Paris Olympics and those looking to compete in 2028 iteration, a Sports Ministry statement said.

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7

LAST NIGHT’S TALK SHOWS

Maait goes to Washington D.C.

The economy once again dominated last night’s talk shows, with hosts focusing onFinance Minister Mohamed Maait, CBE Governor Hassan Abdalla, and International Cooperation Minister Rania Al Mashat’s meeting with the US Treasury secretary in Washington yesterday. However, the nation’s talking heads also found time to talk about an Egyptian-Jordanian-Palestinian summit set to take place in Aqaba today.

Will Egypt get a yes from the IMF? If the Egyptian delegation is able to convince the IMF and US Treasury Department officials to support us, the current year will be less difficult than expected and Egypt will witness a major breakthrough in terms of the loan program and its expansion, economist Medhat Nafie told Kelma Akhira. Egypt needs to increase the size of the IMF package to no less with USD 6 bn with “some flexibility” regarding future reviews, Nafie added. (watch, runtime: 2:21).

The World Bank’s latest growth forecasts for the globe are the worst in 30 years and put 2024 on route to be the worst and slowest year in terms of global economic and trade growth rates, Lamees El Hadidi said during Kelma Akhira, (watch, runtime: 1:15). The lender’s report also received coverage from Ahmed Musa on Ala Mas’ouleety, (watch, runtime: 10:32).

Tripartite summit in Aqaba: Today’s anticipated summit between Egypt, Jordan, and Palestine in Aqaba will be a time for the three countries to discuss the ongoing conflict in Gaza and the future of the enclave after the war, El Hadidi said. The timing of the summit is important as it coincides with US Secretary of State Anthony Blinken’s tour of the region before he lands down in Egypt as it is the only country to have put forward a clear plan for post-war arrangements in Gaza El Hadidi told her viewers. El Hadidi also pointed to the shift in Blinken’s statements regarding the US’ desire to end the war as soon as possible and the need for Israel to give Palestinians their rights (watch, runtime: 3:15 | 3:48).

Also on the airwaves last night:

  • A seven-pronged strategy to develop the EGX: EGX boss Ahmed El Sheikh appeared on Masaa DMC to discuss a plan to support and encourage trading on the bourse. El Sheikh added that the EGX is capable of achieving much larger daily trading volumes, but that the instability of the exchange rate currently restricts the entry of foreign investors into the market (watch, runtime 5:15 | 6:18 | 4:49 | 3:38 | 4:32 | 6:27).
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8

Also on our Radar

Centamin sees “encouraging” results from maiden drilling in the Eastern Desert. PLUS: Egypt x KSA mining cooperation, Ecab, El Hazek, fintech news

MINING-

#1- Centamin strikes gold: LSE- and TSX-listed gold miner Centamin’s maiden drilling expedition in its Eastern Desert Exploration (EDX) block has delivered “encouraging” results, the company said in a statement to the London bourse yesterday. “These results underpin Egypt's emergence as an attractive exploration jurisdiction which Centamin is uniquely positioned to leverage,” said CEO Martin Horgan.

ICYMI- Centamin last month raised its estimate of gold reserves at its flagship Sukari mine to 5.8 mn oz — up 10% from previous projections.

#2- Egyptian-Saudi mining cooperation: Egypt and Saudi Arabia will work to boost mining cooperation under an MoU inked between the two countries, according to an Oil Ministry statement. The agreement also seeks to promote the role of the private sector in both countries working in the mineral resources sector.

PRIVATIZATION-

Gov’t studies proposals on what to do with Egyptian Iron and Steel land: The Public Enterprise Ministry will conclude studies on how to dispose of the land to the south of Cairo where the now-liquidated state-owned Egyptian Iron and Steel was built within three to six months, Public Enterprise Minister Mahmoud Esmat told Al Arabiya and Asharq Business. The land may be used to build for residential projects in partnership with investors and some of it may be allocated to bridges or roads, Esmat said. The ministry last week received several offers for the land from private sector players — including from a local university — the minister added.

Remember: Egyptian Iron and Steel was liquidated three years ago in a bid to pay off some of its EGP 9 bn in outstanding debt.

EMPLOYMENT-

Cabinet doubles down on sending workers abroad: Prime Minister MoustafaMadbouly ordered the establishment of a ministerial task force to set a plan for increasing the number of skilled workers abroad, a cabinet statement read yesterday. The move is part of the government’s efforts to help 1 mn Egyptians access labor markets in developed countries by 2030 by providing specialized training programs that was unveiled in a new report (pdf) from the Cabinet Information and Decision Support Center.

LEGISLATION-

Reforming Egypt’s tourism legislation: The Madbouly government is currently looking into reforming laws governing tourism, a cabinet statement said yesterday. These include issuing a new law regarding the establishment of a tourism chambers and an adjacent union, a draft law dealing with foreign tourists, and preparing the general framework for a draft law regulating tourism companies.

TRADE-

Local currency-dominated trade with Pakistan in the works? Pakistan is open to trading with Egypt using local currencies — with a particular focus on wheat — its Trade Minister Jawhar Ijaz told Asharq Business, the outlet said on X.

FINTECH-

Fintech startups may soon be allowed to enter the ins. sphere: The Financial Regulatory Authority (FRA) is looking into handing fintech startups licenses to offer ins. services, FRA Deputy Chairman Islam Azzam told Asharq Business. The authority has not yet determined the minimum capital requirement for such licenses, Azzam added.

ICYMI- The FRA earlier this week set the minimum issued and paid-up capital needed for fintech startups to receive two-year licenses for non-bank financial services (NBFS) at EGP 15 mn. These services include mortgage finance, MSME finance, leasing, factoring, and consumer finance.

MANUFACTURING-

Production at Ecab’s Saudi facility set to kick off by mid-2024: Local cable manufacturer Ecab plans to begin operations at its Saudi facility by mid-2024, CEO Said Abdelwahab told Zawya yesterday. The USD 10 mn factory in Jeddah will produce ethernet cables and server cabinets.

FINANCIAL SERVICES-

El Hazek to get financing for construction projects: Local construction company ElHazek Construction is borrowing EGP 1.3 bn via a financial leasing agreement with a syndicate of lenders to finance the capital expenditure of two of its subsidiaries, Abu Dhabi Islamic Finance (ADIFinance) — the leasing subsidiary for Abu Dhabi Islamic Bank Egypt — said in a statement(pdf) yesterday. The syndicate is led by UE Finance and includes ADIF Finance, Aur Leasing, AT Lease, and Cairo Leasing Corporation.

It’s been a good start to the year for El Hazek, which closed an EGP 1.7 bn MoU to build the final stages of its Madinat Masr’s Taj City project as well as the latter’s new company headquarters.

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9

PLANET FINANCE

Saudi Arabia raises USD 12 bn in largest bond sale since 2017

Saudi Arabia made its biggest bond sale since 2017 yesterday,raising USD 12bn, according to a statement from the National Debt Management Center. The issuance was 2.5x oversubscribed and the kingdom received orders totalling USD 30 bn.

Why did Saudi Arabia tap the debt market? With oil prices trading lower relative to the budget needs of the country — whose economy relies heavily on oil — it needed to tap another funding source to back its ambitious projects pushed by Crown Prince Mohammed bin Salman, Bloomberg wrote. Last week, Saudi Arabia estimated its funding needs for 2024 at roughly SAR 86 bn (USD 23 bn), its annual borrowing plan (pdf) showed.

ALSO WORTH MENTIONING-

Eurozone unemployment slips back to record low: Unemployment in the eurozonefell back to 6.4% in November from 6.5% the month before — a drop that could complicate widely expected rate cuts by the European Central Bank as wage growth could elevate prices. (Financial Times)

EGX30

25,590

+1.0% (YTD: +2.8%)

USD (CBE)

Buy 30.83

Sell 30.96

USD at CIB

Buy 30.85

Sell 30.95

Interest rates CBE

19.25% deposit

20.25% lending

Tadawul

12,198

-0.4% (YTD: +1.9%)

ADX

9,767

+0.6% (YTD: +2.0%)

DFM

4,118

+0.7% (YTD: +1.4%)

S&P 500

4,756

-0.2% (YTD: -0.3%)

FTSE 100

7,684

-0.1% (YTD: -0.6%)

Euro Stoxx 50

4,467

-0.4% (YTD: -1.2%)

Brent crude

USD 77.59

+1.9%

Natural gas (Nymex)

USD 3.19

+7.0%

Gold

USD 2,033.00

0.0%

BTC

USD 45,715.90

-2.7% (YTD: +10.4%)

THE CLOSING BELL-

The EGX30 rose 1.0% at yesterday’s close on turnover of EGP 4.0 bn (19.3% above the 90-day average). Regional investors were net buyers. The index is up 2.8% YTD.

In the green: Abu Qir Fertilizers (+3.4%), Beltone Holding (+3.2%), and Eastern Company (+2.8%).

In the red: Ezz Steel (-1.5%), CIRA Education (-1.4%), and Oriental Weavers (-0.8%).

Asian markets are largely in the red this morning, with Japan’s Nikkei being the notable exception. Traders in Tokyo look set to notch another 33-year high after yesterday’s high-water mark, CNBC suggests. Futures show stocks in Europe, on Wall Street, and on Bay Street opening in the red later today.

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10

Diplomacy

German foreign minister discusses Gaza with Egypt’s Shoukry

Germany’s foreign minister was in town to discuss Gaza: Foreign Minister SamehShoukry met with his German counterpart Annalena Baerbock yesterday to discuss the Gaza situation among other issues of mutual concern, according to the State Information Service. The two officials held a press conference, (watch, runtime: 33:19), where Baerbock called on the international community to help organize security in Gaza and said that a reformed Palestinian Authority must take a leadership role in the enclave in the post-war period.

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Our weekly deep-dive into infrastructure in Egypt.

Published every Wednesday in EnterpriseAM.

Read Hardhat
11

HARDHAT

A look through gov’t targets for the infrastructure sector over the next six years

More infrastructure reforms for El Sisi’s third term: The government has laid out itsambitious targets for infrastructure and exports for the next six years over President Abdel Fattah El Sisi’s third term in the Cabinet Information and Decision Support Center’s recently released report (pdf).Among the biggest targets are: plans for digital transformation, boosting exports in oil and gas and electricity, increasing water security, and tackling unplanned areas.

** In case you missed it, we dove deeper into the more strictly economic aspects of the report here and our renewable energy targets here.

ENERGY POWERHOUSE AMBITIONS-

Big oil + gas export targets: Oil and gas exports are set to double to USD 36 bn — a number the government hopes to achieve through streamlining procedures for investors and offering more oil and gas exploration bids and expanding exploration activities.

Emissions reductions are still a priority: The government is eyeing a 65% reduction in emissions from the oil and gas sector and an end to routine gas flaring by the end of the decade, according to the report. The government also wants to develop a regulatory framework for methane emissions from the sector by the end of the year, the report added.

Electricity exports will also get a boost: Egypt envisions itself as a regional electricity hub, aiming to double its daily exports to 1.5 GW. The country will achieve this by implementing electrical interconnection projects, becoming a gateway for European energy through Greece and Italy, and strengthening electric connections with neighboring countries.

Four Egypt-Europe interconnectors are in the cards. The atest proposals include a 3-GW Scatec-backed link and a 3-GW Italy-funded connection, both targeting Egypt-Italy connections. The 2 GW Greece-Africa Power Interconnector (GAP) advanced with a signed MoU last year, and is expected to be completed by 2030. Meanwhile, the 2 GW EuroAfrica Interconnector remains stalled, with no news on consultant selection — initially planned for 2H 2023 — yet.

Meanwhile, Egypt and Jordan are exploring a cost-effective upgrade to their electricity link through a 1.1 GW subsea cable, currently under technical and financial assessment, a government source told us previously. This subsea option complements the planned 2 GW expansion and could break ground on the first phase as early as 1Q 2024 if implemented.

Egypt also recently launched the first phase of its 300-MW interconnection project withSudan.This initial stage serves as a springboard for further expansion, aiming to reach 3k MW in the next phase, Youm7 reported previously.

As will mineral mining: Egypt is also planning to boost the contribution of mineral mining to GDP from 0.5% to 5% by 2030.

WATER SECURITY + INFRASTRUCTURE-

Sewage coverage to expand: Egypt intends to provide 100% sewage coverage nationwide by 2030 with a plan to expand drainage networks to cover 6.4 mn feddans. The government is also looking to upgrade irrigation systems and expand them to revitalize 1.1 mn feddans. A USD 50 bn water resources management plan tackles quality, treatment, and efficiency, while a seawater desalination program aims to increase capacity by 3.35 mn cbm per day by 2025.

Desalination plants to be offered up to the private sector in 1H 2024: Four desalination plants will be offered up to the private sector in the first half of 2024 to kick off the government's plan to tender 21 plants in total. The tender for the first batch of plants, which a Sovereign Fund of Egypt (SFE) spokesperson told us in May was set to kick off in 3Q 2023, was waiting on the land allocation process to be completed and revisions for financials in light of exchange rate fluctuations.

The government is also focusing on flood mitigation measures through 30 rainwater collection facilities, rainwater harvesting initiatives, and extensive drainage network upgrades across 60k feddans in the short term, the report said, without specifying an exact timeframe for the upgrades.

HOUSING + SLUMS-

Egypt's urban environment is set for a significant makeover: The government is planning todouble the currently inhabited area of the country to 14% by 2030, the report said. This will include a EGP 318 bn strategy tackling unplanned areas, with 672k new housing units — including social housing — set to be built annually The government also plans to establish 30 new smart cities — also referred to as fourth-generation cities — with housing to accommodate 15-20 mn people.

DIGITAL INFRASTRUCTURE-

The government also has plans to boost the country’s digital infrastructure by:

  • Nearly tripling outsourcing exports to USD 13 bn;
  • Building 45k new mobile network towers nationwide;
  • Launching a digital and IT freezone in the Suez Canal Economic Zone;
  • Boosting the tech sector's contribution to GDP from 3.4% to 7%;
  • Setting up 20 fiber optic cable factories across the country and connecting all government buildings to fiber optic networks, as well as boosting fiber optic cable exports to Africa.

Next week: We’ll break down the government’s targets and plans for the logistics and transport sectors.

Your top infrastructure stories for the week:

  • AD Ports to operate three tourism terminals: AD Ports has inked a USD 3 mn initial agreement with the Red Sea Port Authority to operate and manage three cruise terminals in Hurghada, Safaga, and Sharm El Sheikh.
  • Tarboul is getting an EV factory: Russian EV manufacturer Concordia is setting up an electric vehicle components factory in GV Investments’s Tarboul industrial project in Giza.
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CALENDAR

2024

JANUARY

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

25 January (Thursday): Revolution Day / Police Day (national holiday).

FEBRUARY

1 February (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

1 February (Thursday): OPEC+ oil market monitoring online meeting.

11 February (Sunday): Deadline to apply for the Chicago Booth Executive Programin El Gouna.

25 February 2024 (Sunday): Deadline to bid for 23 blocks in an international oil and gas tender.

MARCH

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

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

APRIL

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

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

MAY

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

5 May (Sunday): Coptic Easter.

6 May (Monday): Sham El Nessim (national holiday).

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

29 May (Wednesday): Virtual launch of Chicago Booth Executive Program.

JUNE

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

30 June (Sunday): June 30 Revolution Day (national holiday).

JULY

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

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

23 July (Tuesday): Revolution Day (national holiday).

SEPTEMBER

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

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

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

25-26 September (Wednesday - Thursday): The Asian Infrastructure Investment Bank’s (AIIB) 2024 annual meeting, Samarkand, Uzbekistan.

OCTOBER

6 October (Sunday): Armed Forces Day.

17 October (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

NOVEMBER

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

DECEMBER

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

EVENTS WITH NO SET DATE

January 2024: The Red Sea Ports Authority is set to finalize an agreement with the Abu Dhabi Ports Group for the operation and maintenance of the tourist passenger terminal in the Sharm El Sheikh Sea Port.

1Q 2024: Egyptian-Qatari Joint Supreme Committee.

1Q 2024: Opening of the newly developed Pyramids Plateau in Giza.

February-May: The Grand Egyptian Museum could officially open to visitors.

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.

1H 2024: The European Union is set to hold an investment conference in Egypt during spring.

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

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.

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

2025

EVENTS WITH NO SET DATE

2Q 2025: Safaga Terminal 2 to start operations.

2027

EVENTS WITH NO SET DATE

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

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