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Thursday, 17 Oct 2024

What We're Tracking Today
Economy
Privatization
Policy
Moves
Kudos
Last Night’s Talk Shows
Egypt In The News
Also On Our Radar
Planet Finance
My Morning Routine
Calendar

World Bank trims Egypt’s growth forecast to 3.5%

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Today at a glance

1

Economy

World Bank trims Egypt’s growth forecast to 3.5%.
2

Moves

El Sisi appoints Hassan Rashad as the new intelligence chief.
3

What We're Tracking Today

Iran’s foreign minister is in Cairo.
4

Privatization

United Bank submits request to list shares on the EGX.
5

Policy

Madbouly assures readiness in case of regional escalation during weekly presser.
6

What We're Tracking Today

It’s interest rate day.
7

Also on our Radar

Arab Contractors will build USD 70 mn road in Uganda.
8

PLANET FINANCE

Amid rising interest rates, Middle East sustainable bond issuance drop in 9M 2024.
9

My Morning Routine

Amr Seif, Egypt, Levant, and Iraq cluster lead, Pfizer. (My Morning Routine)

Thursday, 17 Oct 2024

What We're Tracking Today
Economy
Privatization
Policy
Moves
Kudos
Last Night’s Talk Shows
Egypt In The News
Also On Our Radar
Planet Finance
My Morning Routine
Calendar
1

What We're Tracking Today

Central Bank of Egypt is meeting later today to review rates

Good morning, friends. We have made it to the end of one very busy week and we don’t expect the news flow to slow down over the weekend with the central bank’s MPC meeting later today to review rates and the Iranian foreign minister in town for his first visit in over a decade.

HAPPENING TODAY-

#1- It’s interest rate decision day: The Central Bank of Egypt’s Monetary Policy Committee will meet later today to decide on our interest rates for the coming period. Rates have remained unchanged since the committee delivered a 600 bps rate hike following a surprise monetary policy meeting in March in conjunction with the float of the EGP and a larger loan package from the IMF being approved soon after.

The polls are in: All of the analysts and economists we surveyed for our EnterpriseAM poll see the MPC holding rates steady as the central bank works to prioritize controlling inflation over any monetary policy easing. Analysts we spoke to pointed to sticky inflation, current investor wariness of Egyptian debt, and Israel’s war on its neighbors endangering Egypt-bound gas flows and ramping up the price of energy imports, as well as a seasonal rise in educational expenses as factors that could cause inflation to persist during 4Q 2024 — cementing the expectations of the ongoing tightening cycle carrying over to the first quarter of next year.

#2- Iran’s FM is in town: Iranian Foreign Minister Abbas Araghchi landed in Cairo late last night — marking the first visit by an Iranian FM in around 12 years — as part of a wider regional tour that saw him visit Jordan. The minister will meet with Egyptian high-level officials later today, with talks likely to center around regional security and stability.

ICYMI- Iran became at the forefront of the regional conflict earlier this month when it launched a missile attack on Tel Aviv in retaliation for its invasion of Lebanon and in response to the assassination of Hezbollah secretary-general Hassan Nasrallah and Hamas’ political leader Ismail Haniyeh.

Remember: Egypt and Iran have been in talks for some time now about normalizing ties and reopening embassies, as part of a wider Iranian diplomatic push to mend relations with the Arab world. Then-Foreign Minister Sameh Shoukry made his first trip to Iran in May — marking the first visit by an Egyptian foreign minister to Iran since 1979 — to attend late president Ebrahim Raisi’s funeral.

#3- El Khatib is in Brussels to boost EU trade: Investment Minister Hassan El Khatib is in the Belgian capital today, where he is scheduled to meet with the European Commissioner for Trade, the Vice-President of the European Commission, and representatives of a number of European and Belgian businesses to discuss strengthening economic and trade relations between Egypt and the bloc, the Investment Ministry said in a statement.

El Khatib will also be dropping in for a round table organized by the Arab-Belgian-Luxembourg Chamber of Commerce and the Brussels Chamber of Commerce, where a number of Belgium and Luxembourg-based companies will be in attendance.

AT THE BOURSE-

Market reacts to Arla’s bid for Domty: Local cheesemaker Domty shares saw its shares jump 20.0% during yesterday’s trading to close at EGP 21.63 a share in response to Denmark-based Arla Foods offer to acquire up to 100% of the company.

A good day for the dairy sector: Domty wasn’t the only dairy company on the bourse having a good day, with many of the country’s major dairy producers finishing the day 20% up, including Juhayna, Arab Dairy, and Obour Land.

Arla is paying a 74.6% premium on the share price on the day the acquisition was announced. Naeem Holding’s VP of equity research, Hesham Hamdey, pointed to the premium as evidence of Egyptian stocks being undervalued in comments to Asharq Business. Thndr Securities’ chief equity strategist Amr Elalfy told the outlet that the price premium can be explained as a control premium.

Fresh details on the potential acquisition: The founding El Damaty family will hold around 20% stake in Domty post acquisition, unnamed sources told Al Borsa, adding that the company’s board met yesterday to discuss the offer and set a date for the due diligence — which will likely take place next week.

WATCH THIS SPACE-

EU could further tighten its stance on migration — with help from Egypt: The European Commission is set to issue a proposal to tighten the European Union’s migration stance, European Commission President Ursula von der Leyen wrote in an unusually rightward-leaning letter (pdf). Von der Leyen mentioned Egypt, Morocco, Algeria, Mauritania, Senegal, and Mali as countries the bloc should work with to ensure tightened measures are implemented, citing them as examples of countries from which migrants originate or through which they transit.

Remember: The EU announced back in March that it will provide Egypt with a EUR 7.4 bn package of loans, grants, and investments through to 2027 — EUR 200 mn of which has been earmarked for migration management measures and collaboration with the bloc on tackling irregular migration. The announcement saw many of the European heads of state emphasize the importance of Egypt’s role in this process, pledging to continue to support Egypt in hosting refugees.

DATA POINT-

More EVs on Egyptian streets: EV registration more than doubled during the first nine months of the year, rising 121.7% y-o-y to around 4.8k vehicles, Al Borsa reports, citing industry data.

PSA-

WEATHER- It’s another cool day in Cairo, with a high of 29°C and a low of 21°C, according to our favorite weather app.

It’s a bit cooler in Alexandria, with a high of 28°C and a low of 20°C.

And over the weekend, expect to see a high of 29°C and a low of 20°C in the capital.

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

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Apply directly to jobs@enterprisemea.com and mention “writing development program” in your subject line.

PLUS- We’re also looking for our first dedicated audience development professional. Someone who loves the challenge of helping us reach new readers in new markets — Saudi, the UAE, and lots more to come —using a range of digital channels and tools. You’re someone who thrives on working in a small, focused team. You’ve got proven digital skills (more likely than not on the performance marketing side). And you want to be part of what we immodestly think is the region’s most exciting media, advisory, and business intelligence company.

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THE BIG STORY ABROAD-

The race for the White House has pushed business news a bit further down the front pages with 18 days to go until voters head to the polls in the United States. Harris raised substantially more than Trump in 3Q and the two are chasing each other’s voters.

INTEREST RATE WATCH- Economists see the European Central Bank delivering another quarter-point rate cut when it meets later today — and Goldman Sachs thinks the US Federal Reserve will deliver consecutive 0.25 bps cuts from November through June 2025.

ON WALL STREET:

IN TECH- Uber’s super-app ambitions now see it kicking the tires on the acquisition of travel website Expedia. The Financial Times notes that while the transaction is in very early stages and could still go bust, Uber chief Dara Khosrowshahi was the CEO of Expedia for a dozen years ending in 2017 and is still on the site’s board of directors, “making it likely that any approach would be friendly.”

In Lebanon: Israel has stepped up its attack with further strikes and is claiming to have killed a Hezbollah commander yesterday.

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Somabay, every reason to fall in love.

2

Economy

World Bank trims Egypt’s growth forecast to 3.5%

World Bank revises downward our growth outlook for FY 2024-2025: The international lender sees the Egyptian economy growing at a 3.5% clip during the fiscal year 2024-2025, trimming its outlook 0.7 percentage points from the 4.2% forecasted in June, the World Bank said in its semi-annual MENA economic update — Growth in the Middle East and North Africa (pdf).

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

To blame: The lender sees Suez Canal revenues falling to USD 4.8 bn this fiscal year, almost half the USD 8.8 bn recorded during the fiscal year 2022-2023 and down 27% from the USD 6.6 bn recorded during FY 2023-2024. This comes as escalating risks in the Red Sea continue to drive shipping companies away from the canal. Alongside this, “the uncertainty of the conflict looms large over portfolio investments, heightening investors’ apprehension across the region.”

That’s the best-case scenario: The lender cautioned that its forecast is made “under the assumption that the conflict will not worsen,” explaining that should the conflict escalate further, it could lead to “negative spillovers” that could very much affect growth — further escalations will impact business and consumer confidence, tourism, outflows, and financial conditions.

A little less optimistic than the government’s forecast: The Madbouly government sees theeconomy growing at a 4.0% clip this fiscal year

All in all, we’re growing: Despite the downward revision, the economy is still expected to grow from last fiscal year’s 2.5% growth estimate by the lender and the 2.4% figure provided by the government.

Inflation is on a downward trajectory: While deemed the highest in the region, inflation in Egypt “has been on a declining trend.” The report attributed this to the CBE’s decision to float the EGP, unify the exchange rate against the USD, and hike rates in March — a policy mainly aimed to address the persistent inflationary pressures, according to the report.

Remember: Annual headline urban inflation ticked up for a second month in September, rising 0.2 percentage points from the month before to 26.4%. Some see inflation rising a third consecutive month in October as recent price hikes feed in. However, the outlook for the rest of 4Q is more positive and even more optimistic walking into 2025.

REGIONALLY- The lender now sees the MENA region growing 2.2% this year, down from the 2.8% forecasted over the summer but up from the 1.8% recorded in 2023. “Over the past year, MENA’s 2024 real GDP growth forecasts have been substantially downgraded, with the largest

downward revisions among fragile and conflict-affected situations,” according to the report. The region is expected to grow 3.8% next year — down from an earlier forecast of 4.2%.

The worry: “Economic uncertainty in MENA is currently twice the average of other emerging markets and developing economies worldwide,” the report writes, saying its estimate is based on its measure of “the dispersion of views amongst private sector forecasters.”

What to watch for next: The report is out ahead of the kickoff next week of the World Bank andIMF Annual Meetings in Washington, DC. The meetings run Monday, 21 October through Saturday, 26 October, with the main events taking place 22-25 October.

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3

Privatization

United Bank submits request to list shares on the EGX

United Bank’s IPO is in motion: United Bank has officially submitted a request to list its shares on the EGX as the central bank pushes ahead with its plan to sell a stake in the lender in an initial public offering before the end of 1Q 2025, according to an EGX bulletin.

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

The details: The bank is planning to list 1.1 bn shares with a nominal value of EGP 5 per share — bringing its total issued capital to EGP 5.5 bn. While the size of the stake in proportional terms was not disclosed, we’ve been expecting the CBE to offer anywhere between 30% and up to 49% of the lender.

What’s next? The lender is in the process of finalizing the necessary paperwork ahead of presenting it to the EGX’s listing committee.

ICYMI: The Central Bank of Egypt — which owns 99.9% of the United Bank — announced lastmonth that it would offer a stake of United Bank’s shares on the bourse. The lender’s CEO Ashraf El Kady previously said that the IPO will be promoted to investors across the Gulf, Europe, and the US.

The central bank remains on the lookout for a strategic investor: The central bank remains on the hunt for a strategic investor to acquire a majority stake in the lender, a senior banking source previously told EnterpriseAM, adding that offering a portion of the bank on the EGX will make it more appealing to potential investors.

A long time coming: The CBE first announced its plan to sell the bank in 2017, but the Covid pandemic put the plans on ice. United Bank was also listed in the lineup of state companies and assets earmarked for privatization in the rebooted privatization program unveiled in February 2023.

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4

Policy

Egypt’s Madbouly assures readiness in case of regional escalation during weekly presser

The government is preparing for all scenarios: Prime Minister Moustafa Madbouly explained at his weekly press conference that the government is preparing for all potential scenarios in the region amid escalating tensions around Israel’s war on Gaza and Lebanon. Madbouly also provided a few more nuggets of information about what to expect from growing Egyptian-Saudi economic ties.

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

Madbouly focused on the economic impact of a broadened conflict, saying that the government was making contingency plans for escalation that leads to disruptions to trade, transport, and logistics networks. He also noted that the government is preparing plans for a situation in which escalating reciprocal attacks target regional oil and nuclear facilities, threatening to send the conflict spiraling out of control. Such a scenario would have “far-reaching consequences for energy prices and the movement of goods, including to Egypt,” he said, adding that “our role as a government is to be prepared for all eventualities.”

We got some clarity on “wartime economy”: Addressing recent discussions about Egypt’s preparedness for further regional escalation, Madbouly clarified comments he made last week about the possibility that further escalation might force Egypt into war economy mode. “What I meant was that if the situation escalates into a regional war, Egypt would turn to what’s known as a ‘war economy,’ which means directing all state resources to secure basic needs … to ensure minimal impact on the Egyptian people,” he explained.

His message to the people: Madbouly emphasized the need for national unity in the face of regional tensions. “President Abdel Fattah El Sisi made it clear that these regional challenges require a very high level of unity from the Egyptian people to safeguard the nation’s assets and achievements,” he said.

Madbouly assured citizens that there is no need to fear external threats: “It’s essential for the Egyptian people to remain aware of the unprecedented regional challenges and stay resilient,” said Madbouly.

MORE DETAILS ON GROWING EGYPT-SAUDI ECONOMIC TIES-

On the economic front, the PM touched on the potential for local currency transactions between Egypt and Saudi Arabia. “The use of local currencies in cooperation and investment between Egypt and Saudi Arabia will be done through agreements and coordination between both countries’ central banks,” he said, explaining that the logistics of the move is being studied and will be implemented once a final decision is reached.

What sectors are Saudi investors interested in? The Saudi side will initially target the industrial, tourism, renewables, and urban development sectors, Madbouly said.

The press conference came one day after President El Sisi and Crown Prince Mohammed Bin Salman’s meeting on Tuesday, where the two heads of state signed an agreement to form the Egyptian-Saudi Supreme Coordination Council, which will be co-chaired by them personally, in addition to the bilateral Agreement on Promotion and Mutual Protection of Investments.

That’s not all: Both sides issued a joint statement wrapping up the crown prince’s visit and highlighting future areas of cooperation — CIT, logistics, combating corruption, culture, tourism, higher education and scientific research, media, industry and mining, and environment protection.

SPEAKING OF SAUDI INVESTMENTS- USD 15 bn worth of Saudi investments incoming? Egypt-bound investments from the Saudi private sector totaling USD 15 bn have already been agreed and were awaiting the rubber stamping of the agreement, chairman of the Egyptian-Saudi Joint Business Council Bandar Al Ameri told Al Arabiya. Al Ameri pointed to the renewables, industry, real estate, tourism, and tech sectors as targets of the investments.

Don’t hold your breath: The agreement will be implemented within the coming two months once the legislation receives the regulatory greenlight from both sides.

We heard that this might be in the cards: We heard in September that Madbouly’s government is in talks with major private-sector companies in Saudi to invest USD 10-15 bn in Egypt in different sectors, including renewable energy and seawater desalination.

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5

Moves

El Sisi appoints Hassan Rashad as the new intelligence chief

Hassan Rashad was sworn in yesterday as Egypt’s new intelligence chief, with outgoing head Abbas Kamel named advisor to the presidency, general coordinator of the security services, and special envoy of the president. Rashad graduated from the Military Technical College, he then joined the General Intelligence Service and rose through the ranks to become the Intelligence Service deputy before his appointment yesterday, Extra News reports (Watch, runtime 0:58).

The foreign press took note: The story caught the attention of Reuters, the Wall StreetJournal, the National, and Xinhua.

Al Ahly FC welcomes new faces with managerial shake up: Sky Investment’s Ayman Hussein has been appointed chairman of Al Ahly Football Company and EFG Hermes Head of Research Ahmed Shams El Din was appointed as his vice chairman, the football club announced. Sitting on the board are Zilla Capital Chairman Wael Ziada (LinkedIn) and Ahmed Hossam Awad.

There are some new faces at the Al Ahly Sports Facilities Company, with former Heliopolis Housing and Development CEO Tamer Nasser appointed chairman and Hazem Hilal as vice chairman. Over at Al Ahly Company for Sports services, former Civil Aviation Minister Mohammed Manar Enabah is now chairman and Assistant Investment Minister Lamia Mokhtar is sitting on the board.

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6

Kudos

Egyptians make it onto Forbes’ Sustainability Leaders list

Forbes is out with its Middle East Sustainability Leaders 2024 list — and 18 prominent Egyptian figures have made the list. Featured on the list — and in no particular order:

AND- Arab Contractors recognized by the Engineering News Record’s Global BestProjects for the fourth consecutive year. The state-owned construction company was awarded the title of best international restoration and renovation for its work on the Damietta Bridge and a merit award for its restoration of Cairo’s El Sayeda Zeinab Mosque, the Housing Ministry said in a statement.

PLUS- Egypt’s Rawdat El Sayeda development has won the Arab Housing Ministers’ Council Award for the Best Completed Housing Project for 2024, with the project receiving praise for its “notable urban development and its positive impact on the residents' lives,” the Housing Ministry announced in a statement. Inaugurated in October 2021, the Rawdat El Sayed project aimed at transforming the Tel Al Aqareb area — which was filled with buildings with poor infrastructure — into a “modern urban community providing decent housing.”

ON TOP OF THAT- Mondelez Egypt shifted its chocolate and biscuits factories in the Tenth of Ramadan to run entirely on renewable energy, implemented in collaboration with the New and Renewable Energy Authority, according to a statement. The company will source its energy from five government-owned power plants including the Hurghada, Gabal El Zeit, and Zafarana wind farms, the Zafarana and Kom Ombo solar plants.

ALSO- The Arab Bank will help provide women with essential diagnostic tests and treatment options to combat breast cancer under a cooperation agreement with the Baheya Foundation for Early Detection and Treatment of Breast Cancer, according to a statement (pdf). The bank will fund two surgical clinics at Baheya’s Sheikh Zayed Hospital, which are expected to benefit over 19.5k women annually.

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7

LAST NIGHT’S TALK SHOWS

Following up on the Galala University bus crash

Last night’s talk shows focused on developments in the Galala University bus crash that took place earlier this week, killing 12 and injuring 33. The bus was transporting students to their Ain Sokhna residence because of limited available on-campus housing, Galala University President Mohamed El Shinawi told Ala Masouleety’s Ahmed Moussa (watch, runtime: 21:02). Only around 4.7k students out of the approximately 12k enrolled are able to live on-site, El Shinawi told Moussa.

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

The university is now looking to expand its facilities: Galala University is now in negotiations to establish a dedicated field hospital within the university, alongside a new upscale residential area that will add some 2.5k beds.

Improvements to Galala City infrastructure are also in order: Suez Governor Tarek El Shazly and the university have reached an agreement that will see improved emergency services in the city and add surveillance cameras throughout within the next month, Galala University’s student union president Mostafa El Ashram told Yahduth Fi Masr (watch, runtime: 3:14). El Ashram highlighted the issues students face with roads, lighting, and a lack of speed monitoring in the city.

ALSO- The appointment of a new intelligence chief got airtime from Moussa (watch,runtime: 2:38). We have the details in the news well, above.

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8

EGYPT IN THE NEWS

Egypt’s USD debt catches the attention of investors and the international press

Egypt’s USD debt attracted renewed investor interest as traders returned after a US bond market holiday, Bloomberg wrote. Egypt and Argentina saw their high-yield spreads over treasuries narrow by three basis points despite global uncertainties driven by Trump’s tariff threats and China’s economic slowdown.

PLUS- A US judge described former Capital One banker Pierre Girgis an “accidental spy” in a case that acquitted the dual US-Egyptian national of jail time, Bloomberg reports. Girgis was accused of seeking confidential American law enforcement information on critics of the Egyptian government, which Girgis’ lawyer successfully painted as a “misguided effort to try to promote security” in the Egyptian expat community in the US.

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9

Also on our Radar

Arab Contractors will build USD 70 mn road in Uganda

INFRASTRUCTURE-

#1- Arab Contractors to build 56 km, USD 70 mn road in Uganda: Local construction firm Arab Contractors signed a USD 70 mn agreement with the Uganda National Roads Authority for the design and construction of the 56 km-long Iganga-Kamuli road project, according to a statement. The road project — Arab Contractors' fifth in the country in as many years — will connect a number of cities and is expected to enhance Uganda’s export trade, particularly with neighboring Kenya.

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

#2- Gov’t will within weeks offer a desalination plant to private players to be implemented under a public-private partnership (PPP) in the Suez Canal Economic Zone, the Finance Ministry's PPP unit head Atter Hannoura told Al Arabiya. The new plant is set to desalinate some 250k cubic meters of seawater daily.

The first of many? The government plans to offer more desalination plants early next year, he added.

We heard this was coming: SCZone director Ahmed Saad said Tuesday that the zone was close to launching its first-ever water desalination PPP, adding that the plant will be used to help produce green hydrogen in the SCZone.

PRIVATIZATION-

Elhefny pitches Copelouzos Group on our airport privatization plans: Civil Aviation Minister Sameh Elhefny met with a delegation from Greek infrastructure investment company Copelouzos Group to discuss potential joint projects to develop, manage, and operate airports in the country, according to a ministry statement.

Remember: We’ve been on the lookout for airport privatization news since Prime Minister Moustafa Madbouly said earlier this week that some “important” updates regarding our plans to privatize airports and banks would be announced soon. The Madbouly government first revealed in November 2023 that it planned to invite private sector players — including foreign companies — to take over the management of airports in the country.

Copelouzos is no stranger to Egypt: The company recently signed a partnership agreement with state gas firm EGAS to set up a Greece-headquartered JV focused on the trade, transport, supply, and regasification of natural gas in Eastern Europe and Greece. Copelouzos and Infinity Power are also developing renewable energy projects to supply energy to the 3 GW Greece-Egypt Interconnector (GREGY).

BANKING-

More banks are cutting rates on their high-yield CDs: CIB and HSBC cut interest rates on their local currency high-yield CDs yesterday. CIB has lowered interest rates on its premium, plus, and prime three-year fixed-rate CDs by 2 percentage points to 20%, 19%, and 18%, respectively, while HSBC has slashed its three-year fixed CD by 1.5 percentage points to 20.5%.

MANUFACTURING-

#1- Alporsaideya For Food Industries will invest EUR 5 mn in a new ghee production line, with the company in talks with a German company to source parts for the new line, CEO Mohamed Soliman told Al Mal. The production line is set to produce 120 tons of ghee daily once it begins operation in six months’ time, with the company currently in negotiations to rent a temporary line for ghee production until the project’s completion.

#2- EGFCO to launch new polyethylene pipe plant: Pipe producer EGFCO has completed construction work on its new polyethylene pipe factory in Tenth of Ramadan, Al Mal reports, citing managing director Karim Sadek. The plant will manufacture pipes for key sectors like natural gas, water, sewage, and irrigation, supporting Egypt’s infrastructure development. The firm — a JV between Egypt Gas, the Swiss GF Piping Systems, and the UAE’s GF Corys — also plans to target new export markets in north and east Africa.

EARNINGS-

Kima’s revised FY 2023-24 earnings see net income more than double in: Egyptian Chemical Industries (Kima) saw its net income rise 120% y-o-y to EGP 2.5 bn during the fiscal year 2023-2024, it said in its revised earnings release (pdf) for the fiscal year. Total sales fell 1.2% to EGP 6.5 bn during the fiscal year. Pre-revision the company had reported a 93.9% y-o-y dip in its net income to EGP 70 mn.

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10

PLANET FINANCE

Amid rising interest rates, Middle East sustainable bond issuance drop in 9M 2024

Sustainable bond issuance across the Middle East declined 18% y-o-y to USD 16.7 bn in 9M 2024, according to an S&P Global report (pdf). The market’s cooling reflects a normalization following COP28’s momentum in late 2023, while other factors such as inflation, interest rates, and economic growth all impact demand for the notes. Meanwhile, funding and regulation can also be affected by “transparency and disclosure within ESG reporting [which] are in the early stages of development.”

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

The Middle East’s sustainable bond issuances accounted for 2.2% of global sustainable bond issuance in 9M 2024, down from 2.6% during the same period in 2023.

Although issuances have slowed, sustainable bonds account for a larger share of the region’s bond market than the global average. In the Middle East, sustainable bond issuances account for 15-20% of total bond issuances (excluding sovereigns and private placements), coming in above the 12-14% global average.

Sustainable sukuk issuances accounted for 35-40% of all issuances in the region so far this year, up from 25-30% in 2023. Total sustainable sukuk issuances in the region remained basically unchanged at USD 6.1 bn in 9M 2024, in the face of a global 11% y-o-y decline to USD 7.1 bn. Saudi Arabia dethroned the UAE as the largest issuer of this type of issuances in 9M this year, compared to the same period in 2023.

Saudi Arabia and the UAE are leading the market, accounting for 60% of sustainable bond issuances in the region, with Qatar also making strides this year, including recording the region’s largest issuance in 2024 so far with the sale of a USD 1.5 bn sovereign green bond sale in 2Q 2024.

Financial institutions are the most prevalent issuer in the region, while issuances by state-owned corporates are down 45% in 9M 2024 on an annual basis. “In the UAE, the financial sector has pledged to mobilize AED 1 tn (USD 272 bn) in sustainable finance by 2030,” the report says.

The implementation of net-zero policies could drive more issuances: Stakeholders will need to move swiftly towards net-zero policies, along with a stronger focus on sustainability strategies, as well as new regulations for sustainable bond issuances to gain better traction.

The composition of sustainable bond issuances is changing: Whereas sustainable bond issuances in 2023 were primarily green bonds, this year saw growth in “sustainability issuances (including funding social projects),” the report says. The shift is largely driven by financial institutions, which are incorporating social elements into their projects to align with broader sector objectives. Common social initiatives include improving access to essential services, supporting affordable housing, and creating jobs through investments in SMEs.

Globally, it’s a bit of a different picture: Although green bonds continued to be a fixture of the region’s debt market “given the exposure to hydrocarbons,” they account for a far smaller share of sustainable bond issuances this year than the global average. On a global scale, green bonds still make up around 60% of sustainable bonds.

MARKETS THIS MORNING-

The Shanghai Composite, Hang Seng, and ASX 200 are all up in early trading this morning, boosted by yet another record close for the Dow yesterday. Only the Nikkei (-0.5%) is bucking the trend.

Futures suggest major Wall Street and European benchmarks could see a bit of selling pressure at the opening bell later today.

EGX30

30,545

-0.1% (YTD: +22.7%)

USD (CBE)

Buy 48.54

Sell 48.68

USD (CIB)

Buy 48.54

Sell 48.64

Interest rates (CBE)

27.25% deposit

28.25% lending

Tadawul

12,039

+0.3% (YTD: +0.6%)

ADX

9,306

+0.2% (YTD: -2.8%)

DFM

4,485

+0.4% (YTD: +10.5%)

S&P 500

5,821

+0.1% (YTD: +21.8%)

FTSE 100

8,329

+1.0% (YTD: +7.7%)

Euro Stoxx 50

4,909

-0.8% (YTD: +8.6%)

Brent crude

USD 74.48

+0.3%

Natural gas (Nymex)

USD 2.37

-5.2%

Gold

USD 2,691

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THE CLOSING BELL-

The EGX30 fell 0.1% at yesterday’s close on turnover of EGP 5.2 bn (25.7% above the 90-day average). International investors were net sellers. The index is up 22.7% YTD.

In the green: Juhayna (+20.0%), Oriental Weavers (+11.1%), and Cleopatra Hospitals (+4.6%).

In the red: Elsewedy Electric (-5.0%), Palm Hills Developments (-4.1%), and Alex Containers and Cargo Handling (-2.6%).

CORPORATE ACTIONS-

#1- CIRA Education’s general assembly approved paying out dividends of EGP 0.257 per share on its FY 2022-23 earnings, totalling EGP 150 mn, the company said in an EGX disclosure (pdf).

#2- E-finance will pay out dividends of EGP 0.197 per share on its 1H 2024 earnings after its general assembly greenlit the move, the state-owned fintech player said in an EGX disclosure (pdf).

#3- Eastern Company is paying out dividends of EGP 2.70 per share on its FY 2023-24 earnings after its general assembly approved the decision, the state-owned tobacco giant said in an EGX disclosure (pdf). The dividends will be paid out in two installments, with the first paid on 21 October and the second on 25 November.

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11

My Morning Routine

My Morning Routine: Amr Seif, Egypt, Levant, and Iraq cluster lead, Pfizer

Amr Seif, Egypt, Levant, and Iraq cluster lead, Pfizer: Each week, My Morning Routine looks at how a successful member of the community starts their day — and then throws in a couple of random business questions just for fun. Speaking to us this week is Amr Seif (LinkedIn), Pfizer’s cluster lead for Egypt, Levant and Iraq (ELI) and country manager for Egypt.

My name is Amr Seif and I am the ELI cluster lead at Pfizer. I am a pharmacist, and I’ve worked in a variety of areas including sales and marketing. I’ve been living and working in Dubai for the past 13 years, and only recently moved back to Egypt.

I shifted into leadership roles in 2008 and recently joined Pfizer as ELI cluster lead — managing Egypt, Levant and Iraq.

The main responsibility in my role is addressing purpose. Our purpose is to ensure access to our innovative breakthrough treatments to patients. My role relies on collaboration and partnering with key stakeholders to address our common purpose.

Pfizer has a strong legacy. Having joined it only recently, I am impressed at how Pfizer’s products have changed the lives of bns of people around the world and made what was once unimaginable imaginable.

For 175 years, Pfizer has been delivering breakthrough medications and vaccines and has a promising future that is looking at creating more innovative medicines for patients. If you look at the stats, 1.3 bn people have taken Pfizer medications last year, the products are very widespread.

We’re seeing great innovation in the pharma industry with the rise of AI. We are excited about integrating artificial intelligence in developing ground-breaking therapies, which we intend to harness in the fight against cancer and other diseases.

There are also more interesting trends happening — like precision medicine or the customization of treatments targeted to specific patient populations for specific ailments. Researchers now have much more detailed information about individual patients, thanks to advances in DNA analysis, which help us to produce personalized and effective treatments.

I lead a very disciplined morning routine. I sleep at around 9:30pm, wake up at around 6:15am, head to the gym, and arrive at the office at around 8:30am. When I get there, I start by reading EnterpriseAM and looking through my emails.

I’m usually the most productive during those first few hours so I aim to get things done early. I try to leave the office at 7pm and head home for dinner with the family. I like going on a quiet walk in the evening — without music — just to clear my head.

The constants in my everyday life are: working out, working, reflecting, and my family.

I stay focused by prioritizing. This way I’m able to direct all of my focus to whatever is most important at that specific moment. I even block out reflection time in my calendar to make sure that I always give myself a moment to think and reflect. I do this to avoid making decisions based on quick impressions — a natural human instinct — instead I pause, and look at things from a different perspective.

I collaborate with the team to focus on our priorities, while staying flexible to handle last-minute opportunities that arise.

In terms of my professional goals, my current ambition is to continue to drive growth, help advance health equity and innovation, collaborate with governments on projects and initiatives that impact patients and continue to invest in developing and growing the teams.

My personal goal is to become more present in the moment. I want to get in touch with my feelings and emotions at each moment.

To me, work-life balance is relative. When I first started my new role, I needed to give it my all, so my balance leaned more towards work. So, it differs based on the circumstances. What’s more important is being fully present in whichever it is you’re focused on.

I like to wind down from work during the drive home, which is why I enjoy going to the office. However long that drive is, it’s the perfect chance to reflect on the day and switch off work mode.

Sometimes a vacation is truly needed. I make it a point to take a two-week holiday every year to spend quality time with my family and enjoy our favorite activities together.

I don’t watch TV. Ten years ago, I just randomly stopped watching TV. I sometimes watch football and other times my son puts on Friends and I watch it with him. I do really enjoy TED Talks, though.

One piece of advice that has always resonated with me came when I received my very first promotion. My boss's boss told me that what got me to this role is not what will make me succeed in it. Essentially, this means that if we stick to what we're good at, we might get one promotion, but we need to stay agile and keep learning. If you continue doing what you did in your previous role, you won't achieve everything you aspire to. It's crucial to keep learning and adapting.

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CALENDAR

2024

OCTOBER

13-17 October (Sunday-Thursday): Cairo Water Week, Water and Climate: Building Resilient Communities, Cairo, Egypt.

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

20-22 October (Sunday-Tuesday): Mediterranean Offshore Conference, Alexandria, Egypt.

21 October (Monday): BEBA working luncheon with Aviation Minister Sameh El Hefny, Cairo, Egypt.

21-25 October (Monday-Friday): The second iteration of the Global Forum for Population, Health, and Human Development.

22-24 October (Tuesday-Thursday: 16th Brics Summit, Kazan, Russia

21-27 October (Monday-Sunday): The World Bank and IMF annual meetings.

30 October (Wednesday): The CEO Women Conference, Cairo, Egypt.

NOVEMBER

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

7-9 November (Thursday-Saturday): FinExpo Conference and Exhibition, Cairo.

11-15 November (Monday-Friday): Arab African Investment and International Cooperation Summit, Aswan, Egypt.

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

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

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

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

DECEMBER

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

EVENTS WITH NO SET DATE

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

3Q 2024: Egyptian-Armenian Joint Committee.

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

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

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

2025

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

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

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

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

EVENTS WITH NO SET DATE

2Q 2025: Safaga Terminal 2 to start operations.

2027

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

EVENTS WITH NO SET DATE

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

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