Your rundown on the industries the gov’t thinks are priorities going forward

The Sisi administration has a new basket of structural reforms in the pipeline — and these are the industries most likely to benefit, based on an Ittihadiya readout (pdf) of a meeting the president held yesterday with Prime Minister Moustafa Madbouly and the ministers of planning, finance, CIT, agriculture, and trade and industry. The readout says the discussion focused on the second phase of economic and social reforms the administration plans to enact. Among the business-relevant highlights: Priority industries include “tech-intensive manufacturing,” agriculture,…

No vaccine arriving in Egypt until mid-2021?

We can see the beginning of the end for covid in Egypt, but it may not be until mid-2021:. That’s according to President Abdel Fattah El Sisi, who suggested yesterday that negotiations to secure a stock of vaccine could drag on for a few months to come. This came during a speech on the coronavirus in which he sought to reassure that the nation’s medical experts are doing all they can to contain the virus. You can catch El Sisi’s full speech here…

Big new rail company plans to invest USD 10 bn + tons more rail transport news from Cairo ICT

INVESTMENT WATCH- Big new rail company plans to invest USD 10 bn + tons more rail transport news from Cairo ICT: The Suez Canal Economic Zone and the Sovereign Fund of Egypt signed an agreement yesterday to set up the National Egyptian Company for Railroad Industries (NERIC) — the new company specialized in producing and refurbing locomotives — at the Cairo ICT expo Monday, according to a Planning Ministry statement (pdf). The company is expected to invest USD 10 bn over the next…

The debt market is really heating up heading into 2021

DEBT WATCH- The debt market is really heating up heading into 2021: Two securitized bond offerings worth a combined EGP 4 bn are going to market before the end of the year, said Khalil El Bawab, the CEO of Banque Misr’s investment arm Misr Capital, which is acting as lead manager on both sales. While he didn’t disclose names of companies, the size of the issuances (EGP 2.5 bn and EGP 1.5 bn) match planned sales by Corplease and Palm Hills Developments that…

Zed Sports confirms acquisition of majority stake in FC Masr

M&A WATCH- Sawiris’ sports investment company Zed Sports has acquired a majority stake in FC Masr, CEO Ahmed Diab confirmed to Al Mal yesterday, without providing additional details on the transaction. Hapi Journal claimed in September that an agreement had been reached between the two companies, without sourcing its claims.

Sports startup Eksab raises USD 500k from VC outfit 4DX

STARTUP WATCH- Cairo-based sports startup Eksab has raised USD 500k from Africa-focused VC firm 4DXVentures, a companystatement (pdf) said yesterday. This is the company’s second injection of funding in the past 18 months after a seed round last June attracted a six-figure investment from 500 Startups. Eksab is a daily fantasy sports platform allowing users to make predictions about live football games, earning points based on how accurate their predictions are, and being rewarded with prizes.The platform plans to use the latest funding…

Hotel occupancy rates fall sharply due to pandemic

Hotel occupancy rates in Cairo nosedived 67% y-o-y so far this year amid the pandemic-induced slump in tourism, according to Colliers International’s MENA Hotels Quarterly review (pdf). Hurghada and Sharm El Sheikh’s occupancy rates have also fallen 57% and 55% year-to-date. Alexandria was the least affected of the Egyptian cities, but still saw occupancy rates falling 47% y-o-y. World Tourism Organization figures have shown that tourist arrivals to Egypt dropped 62.3% y-o-y in 1H2020 while tourism receipts plunged 90.4% in 2Q2020 when the…

Uber applies for license under ride-hailing legislation

Uber has applied for an operating license under recent legislation governingride-hailing companies, General Manger Ahmed Khalil said in an interview with Masrawy on Tuesday. Under the 2019 legislation, ride-hailing companies pay 25% more tax than other cab drivers, are obliged to hire white cab drivers, and must provide proof that their drivers are paying social insurance, amongst a host of other requirements on tariffs, data protection and service quality. Companies are required to pay EGP 30 mn for a five-year license, while drivers…

Shippers, customs brokers win minor Customs Act concessions

LEGISLATION WATCH- Shipping agencies and customs brokers have won minor concessions from the Finance Ministry after challenging some elements of the recently-ratified Customs Act, Enterprise has learned. Brokers had complained about the strict new insurance requirements in the legislation, which force large companies to deposit EGP 100k and small companies EGP 50k, up from as little as EGP 5k before. The Customs Authority has refused to budge from the figures but according to a Finance Ministry directive obtained by Enterprise the authority will…

Central bank plans digital infrastructure company to support financial inclusion

The Central Bank of Egypt’s financial inclusion strategy seems to be moving forward after the bank yesterday set up a company to develop tech infrastructure and support digital payments, suggests a local press report. The central bank will hold a 99.9% stake in the Terra Digital Financial Infrastructure Company, and will work alongside the National Payments Council to upgrade the country’s digital infrastructure, the report says without providing further details. CBE Governor Tarek Amer said earlier this week that it is working on…

Neptune Energy names new Egypt MD

MOVES- Global oil and gas company Neptune Energy has appointed Mohamed Mounes Shahat as managing director for Egypt, the company said. The industry veteran, who started his career as an engineer at state-owned Gulf of Suez Petroleum Company, will join Neptune’s Cairo office in December, succeeding Gamal Kassem.

CI Capital to IPO education management arm Taaleem in 1Q2021

IPO WATCH- CI Capital is planning to list up to 40% of its education management arm Taaleem Consulting and Educational Services in an IPO in 1Q2021, Al Mal reports, citing sources with knowledge of the matter. The investment bank has already hired legal advisors for the listing and (very rightly) believes the market is ready for a new offering, the sources said. There was no mention of how much the IPO will be looking to raise. Taaleem reported a net profit of EGP…

Central bank working on new financial inclusion strategy -Amer

A national strategy for financial inclusion is in the works at the Central Bank of Egypt (CBE), Governor Tarek Amer said during the Cairo ICT expo, according to Al Mal. The central bank and state statistics agency Capmas are working with an international financial inclusion expert on a study to identify gaps in the financial services market, Amer said, without providing further details. It’s not clear how this will differ from the strategy unveiled by the CBE in 2019, which centers on strengthening…

EFG Hermes advises on USD 265 mn loan for Orascom Development Egypt

EFG Hermes concluded a seven-year USD 265 mn debt arrangement for Orascom Development Egypt (ODE), the investment bank said in a press release (pdf) yesterday. ODE will use USD 215 mn to refinance outstanding debts and the remaining USD 50 mn to fund growth plans over a two-year period. The debt carries a 2.5-year grace period to give the company some breathing room due to covid-19. The loan brings the total number of debt arrangements EFG has advised on this year to seven,…

Google steers clear of Egypt with new Israel-Saudi fiber connection

Google steers clear of Egypt with new Israel-Saudi fiber connection: Google has begun work on a major new fiber optic network between Israel and Saudi Arabia that will serve as a major new transit for global internet traffic, the Wall Street Journal reports, citing sources familiar with the matter. Codenamed Blue Raman, the line has been strategically placed to lessen reliance on Egypt, which is one of the busiest internet transit points in the world. Most Europe-India lines pass through Egypt, heightening the…

STC Pay considers Egypt after Gulf expansion next year

STC eyeing another entry point to Egyptian market with digital payments arm? Saudi Telecom’s digital payments business STC Pay could enter the Egyptian market after it is given the regulatory greenlight to launch in other GCC countries next year, CEO Ahmed Alenazi told Reuters. The company is currently waiting on approvals to set up shop in the UAE, Kuwait, and Bahrain, which Alenazi said are the priority markets for now, with Egypt perhaps following at a later stage. STC has been in negotiations…

Six railways agreements signed at TransMea 2020

The Transport Ministry signed six railway agreements on the sidelines of the TransMea 2020 expo on Monday, covering the national railway, two planned electric train lines and Cairo’s metro network, a ministry statement said. These include two agreements with a Chinese consortium worth c. USD 530 mn to finance the second and third phases of the electric train route connecting Tenth of Ramadan City to the new administrative capital. Two pacts also covered civil works for the first round of Metro Line 4,…

Manufacturers could be allowed to reschedule natural gas debts

Manufacturers could be allowed to reschedule unpaid natural gas bills over a period of up to 10 years, according to a local press report quoting Egyptian Federation of Investors Associations (EFIA) board member Sobhy Nasr. The EFIA has been lobbying officials to allow a 15-year period to reschedule the debt but the proposal was rejected by the Oil Ministry, which instead said it would consider a 10-year repayment period provided companies pay off their debts alongside new bills on a monthly basis. The…

How Edita maintained its commitment to sustainability amid covid-19

How Edita maintained its commitment to sustainability amid covid-19: Snackmaker Edita’s sustainability initiatives over the past year were largely focused on mitigating the fallout from the pandemic on all its stakeholders, including its employees, consumers, and wider community, it said in its latest sustainability report (pdf). The company also made “significant progress” in developing how it monitors its sustainability in 2019 and began reporting emissions reductions across the entire company, CEO Hani Berzi said. A new wastewater treatment plant at one of its…

Mohamed Sheta appointed AMOC chairman

MOVES- Mohamed Moustafa Sheta has been appointed chairman and managing director of the Alexandria Mineral Oil Company (AMOC) by order of Oil Minister Tarek El Molla, Masrawy reports. Mohamed Abbadi has been appointed managing director of the Red Sea National Refining and Petrochemical Company, also by order of El Molla.

EFG Hermes, SFE to complete due diligence on AIB in February -sources

M&A WATCH- EFG Hermes and the Sovereign Fund of Egypt (SFE) will complete due diligence on the Arab Investment Bank (AIB) by February 2021 ahead of a potential acquisition of a 76% stake in the state-owned bank, Masrawy reports, citing unnamed banking sources familiar with the matter. SFE CEO Ayman Soliman said in September that the process could be wrapped up by the end of the year. EFG Hermes declined to comment on the report when we asked. Background: EFG Hermes and the…

EGX positioned for rebound in 2021 on strong fundamentals, positive growth outlook: Credit Suisse

The EGX is well-positioned for a comeback next year, thanks in large part to Egyptian equities currently being cheap because of the covid-19 market slump, Credit Suisse’s Head of Middle East Research Fahd Iqbal told Bloomberg. The EGX30 is currently the region’s worst-performer — down 22% year-to-date — and trails behind the MSCI Emerging Market Index, is up 8.5% for the year. Egyptian stocks are now trading at their steepest discount to the MSCI EM Index in a decade. A covid-19 induced downturn…

RenCap bullish on Egypt, sees EM inflows gaining momentum

RenCap bullish on Egypt, sees EM portfolio inflows gaining momentum: The benefits Egypt is reaping from its fiscal reform program — including turning a primary budget surplus and engaging the IMF — are keeping Renaissance Capital bullish on the economy, the investment bank said in a report last week. RenCap also sees an improving debt-to-GDP ratio on the horizon as the Central Bank of Egypt (CBE) continues enacting rate cuts next year. “Moreover, we think the education / electricity fundamentals are in place…

Talks of Banque du Caire IPO “premature” -sources

IPO WATCH- Talk of when Banque du Caire (BdC) might reschedule its IPO on the EGX are “premature” in light of the emergence of a global second wave of covid-19, Masrawy reports, citing unnamed sources close to the matter. Speaking to the newspaper from the Department of the Obvious, the sources said it is not advisable to list shares at a time when the global economy is still reeling from the pandemic and financial markets remain volatile. Background: The disruption caused by the…

Sarwa sukuk issuance gets green-light from regulators

DEBT WATCH- Biggest corporate sukuk yet gets regulatory approval: Sarwa Capital’s EGP 2.5 bn sukuk issuance was approved by the Financial Regulatory Authority’s (FRA) Sharia Supervisory Committee on Thursday, paving the way for it to become only the second company to issue sukuk in Egypt. The company yesterday signed the prospectus for the single-tranche issuance, which will offer seven-year sukuk backed by the loan book of its consumer finance subsidiary Contact. The securities will only be offered only via private placement to institutional…

Etisalat Misr to invest EGP 5 bn in network infrastructure in 2021

Etisalat will spend EGP 5 bn to upgrade its network infrastructure and invest in advanced technologies in Egypt in 2021, CEO Hazem Metwally told Hapi Journal. The company will focus its efforts on improving data transmission, and integrating AI, cloud computing and IoT technology into its network, he said. The network provider previously said it would invest EGP 4.5 bn in modernizing its Egypt network in 2019. Etisalat was recently awarded 20 MHz of new bandwidth by the National Telecommunications Regulatory Authority under…

Customs officials unlikely to reduce insurance requirement for Egypt’s brokers

LEGISLATION WATCH- Brokers are unlikely to get a break on new higher insurance payments introduced under recently-ratified changes to the Customs Act, but the government could consider other incentives, Customs Authority official Shahat El Ghatwary said. The authority has already sent out instructions to officials to streamline the clearance process to enjoy the benefits of the improved law ahead of issuing improved executive regulations, Ghatwary said. Background: Customs brokers have been lobbying officials to rethink the new insurance requirements, which require large companies…

Small businesses to get 6-month grace period on leases for new industrial units

Small businesses will be given a six-month grace period before they have to pony up for leases on units in seven new industrial complexes recently proposed by the Industrial Development Authority, Trade and Industry Minister Nevine Gamea said in a statement (pdf) yesterday. The deadline for bidding for units has also been extended by two weeks and will now end on 12 December, she added.

Egyptian e-commerce platform ExpandCart raises USD 2.5 mn in series A funding

STARTUP WATCH- Egyptian e-commerce platform ExpandCart raised USD 2.5 mn in a series A funding round led by Sawari Ventures, Agility Ventures and Graphene Ventures, Menabytes reports. Two angel investors also took part in the funding round. ExpandCart caters to merchants and allows its users to build online stores in Arabic or English. The platform was the only African startup to be accepted into Hong Kong’s Betatron accelerator program last year, and received an investment of USD 150k.

Earnings watch: Cleopatra Hospitals, Orascom Investment Holding

EARNINGS WATCH- Cleopatra Hospitals Group’s net profit rose 11% y-o-y in 3Q2020 to EGP 80 mn, up from EGP 72.2 mn last year, according to the company’s earnings release (pdf). Revenues grew 16% to EGP 536 mn in the third quarter, up from EGP 462 mn a year ago. “Margins are well on their way to making a full recovery supported by revenue growth and management’s wide-ranging cost control efforts,” the company said. “Our performance was supported by the gradual lifting of restrictive…

Ayman Hossam El Din to head consumer watchdog for three months

MOVES- Ayman Fathy Hossam El Din has been appointed acting chairman of the Consumer Protection Authority (CPA) on a three-month contract, replacing Ahmed Samir Farag, following a decision by Prime Minister Moustafa Madbouly, Al Shorouk reports. Hossam El Din previously served as the deputy minister for supply and internal trade.

Building a diagnostics powerhouse with IDH CEO Hend El Sherbini

How did a family-owned lab grow into a regional diagnostics powerhouse? We explore the story behind Integrated Diagnostics Holding and CEO Hend El Sherbini in this week’s episode of Making It, our podcast on how to build a great business in Egypt. IDH operates over 450 labs across Egypt, Sudan, Jordan and Nigeria, and in 2015 was the first Egyptian company to list on the main market of the London Stock Exchange in an IPO that was 11 times oversubscribed. You already have…

IMF gives initial approval to second tranche of USD 5.2 bn standby loan

Egypt is on track to receive the second tranche of its USD 5.2 bn IMF standby loan after it reached a staff-level agreement with the fund following a review of the 12-month program, the IMF said in a statement. Some USD 1.6 bn will be paid out should the fund’s executive board give its approval when it meets in the coming weeks, it said. This would take the total disbursements under the program to USD 3.6 bn, with Cairo having received the first…

Gov’t revises FY2020/21 GDP forecast upwards to 3.8%

Gov’t GDP forecast revised upwards:The government expects the economy to grow at a 3.5-3.8% clip in the current fiscal year, Deputy Planning Minister Ahmed Kamaly said on the sidelines of an energy conference yesterday. The range is higher than the outlook offered by Finance Minister Mohamed Maait earlier this month, who said that the economy is likely to grow between 2.8% and 3.5% during the year. This is in line with analyst expectations: Last month the IMF, Fitch, and Deutsche Bank all predicted…

Orange to invest EGP 4 bn on network upgrades in 2021

INVESTMENT WATCH- Orange will invest EGP 4 bn on network upgrades in 2021, Hisham Mahran, who is chief of Orange’s enterprise segment, told Al Shorouk yesterday. The company will allocate more resources to expanding its data transfer capacity and footprint in financial services, he said, adding that the company spent 80% of its investments this year on expanding its data transmission services to cover more regions across various governorates. Orange currently has a 23% share of the mobile wallet market in Egypt. Orange…

11 companies awarded 82 gold exploration blocks in gov’t tender

The results of Egypt’s latest gold + mineral exploration auction are here: Eleven mining companies have been awarded 82 gold exploration blocks in the Eastern Desert under an Oil Ministry tender launched earlier this year, Minister Tarek El Molla said in a statement on Thursday. The winners include seven foreign firms: Canadian miners Barrick Gold, Lotus Gold and B2Gold, British firms Red Sea Resources, AKH Gold and SRK, and Australian gold miner and Sukkari operator Centamin. Four local firms also won: Mining and…

Sawiris’ attempts to acquire Shalateen Mining in doubt as talks halted

M&A WATCH- Sawiris’ attempts to acquire Shalateen Mining in doubt as talks stop: Naguib Sawiris’ talks with the government to acquire 51% of state-owned Shalateen Mining have been suspended, Oil Minister Tarek El Molla told Reuters without giving further detail. The La Mancha chairman said in February he was eyeing the majority stake in Shalateen, but the company’s discovery of a 1 mn-ounce gold reserve in the Eastern Desert last month appears to have thrown the sale off course. The Egyptian Mineral Resources…

Pharmacists Syndicate boycotts Ibnsina Pharma alleging misuse of 3elagi app

DISPUTE WATCH-Ibnsina faces boycott, legal action from Pharmacists Syndicate: The Pharmacists Syndicate called on its members to boycott Ibnsina Pharma and will pursue legal action against EGX-listed company for allegedly using the 3elagi app to sell product directly to customers, the syndicate said in a statement on Wednesday. The pharmacists gave the company 48 hours to stop using the app and Ibnsina declined to do so, the statement claimed. The syndicate’s grounds for legal action remain unclear; we were unable to reach the…

The EGX has changed how it calculates closing share prices

REGULATION WATCH- The EGX has changed how it calculates closing share prices: Closing share prices on the EGX will be calculated according to the volume-weighted average, as long as this meets a minimum value based on the share’s trades over the preceding three months, according to an EGX statement (pdf). The conditional value is calculated by taking the share’s total value traded over the three months, dividing that figure by the number of trading days during that period, and multiplying the outcome by…

Earnings: IDH profits up 39% in 3Q2020

EARNINGS WATCH- LSE-listed Integrated Diagnostics Holding (IDH) reported a 39% y-o-y increase in net profit to EGP 201 mn in 3Q2020 on revenues of EGP 720 mn, up 23% y-o-y, according to a company earnings release (pdf). Net profit grew 4% to EGP 375 mn during the first nine months of the year as revenues rose to EGP 1.67 bn, up 1% from the same period in 2019. IDH’s performance was supported by the government gradually lifting covid-19 lockdown measures, allowing the company…

Earnings: Orascom Construction profits down 6% in 3Q2020

EARNINGS WATCH- Orascom Construction (OC) profits fell 6.2% y-o-y to USD 30.2 mn in 3Q2020 from USD 32.2 mn last year, the company said in its earnings release (pdf). Revenues for the quarter were up 4.4% y-o-y to USD 824.5 mn. CEO Osama Bishai said the results indicate “steady performance” and the increase in revenues demonstrates that the group’s sites are operating on a “full-fledged” basis after the earlier challenges of covid-19 “Our business development efforts and our competitive edge continue to allow…

Matouk Bassiouny & Hennawy to advise on ODH’s sale of Orascom Housing Communities

APPOINTMENTS- Law firm Matouk Bassiouny & Hennawy has been appointed to advise Orascom Development Holding (ODH) on the sale of its stake in Orascom Housing Communities, Al Shorouk reports, citing unnamed sources familiar with the matter. ODH announced last week that it is seeking to sell some or all of its stake in the company, a few days after reports in the local press suggested that CEO Samih Sawiris is looking to offload 85% of its shares to an unnamed UK investment fund,…