{"id":582572,"date":"2023-03-10T00:00:00","date_gmt":"2023-03-10T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2023\/03\/10\/lots-of-macro-privatization-and-fdi-updates-sczone-officials-are-heading-to-vietnam-next-week\/"},"modified":"2023-03-10T00:00:00","modified_gmt":"2023-03-10T00:00:00","slug":"lots-of-macro-privatization-and-fdi-updates-sczone-officials-are-heading-to-vietnam-next-week","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2023\/03\/10\/lots-of-macro-privatization-and-fdi-updates-sczone-officials-are-heading-to-vietnam-next-week\/","title":{"rendered":"Lots of macro, privatization and FDI updates + SCZone officials are heading to Vietnam next week"},"content":{"rendered":"

Good morning, nice people, and happy FRIDAY.<\/span> Ramadan is officially less than two weeks <\/span>away, so we\u2019re cherishing the last days of morning coffee and nice, big Friday breakfasts \u2014 we hope you are too.<\/span><\/p>\n

Enterprise Weekend comes out each Friday at 9:00am CLT.<\/span> We\u2019ll be back on Sunday at 6am <\/span>with EnterpriseAM. Until then: Enjoy the weekend.<\/span><\/p>\n

LAST WEEK IN 3 MINS- <\/span><\/p>\n

<\/span> It was a busy week in the news<\/span>,<\/span> <\/span>with plenty of updates on the Madbouly <\/span>government\u2019s privatization program, a EGP 190 bn social support package, and more scrappy ways to address <\/span>our ongoing FDI crisis. <\/span><\/p>\n

PROGRESS ON PRIVATIZATION- <\/span><\/p>\n

Expect stake sales in pre-IPO fund firms in April: <\/span>The <\/span>Sovereign Fund of Egypt\u2019s (SFE) <\/span>pre-IPO fund <\/span>is set to offer stakes<\/a><\/span> in 2-3 state-owned companies to strategic investors or via public share sales in April. <\/span><\/p>\n

Eleven companies are headed to the pre-IPO fund in total:<\/span> Stake sales in 11 of the <\/span>32<\/a><\/span>companies<\/a><\/span> in the government\u2019s privatization program will be managed through the pre-IPO fund. <\/span><\/p>\n

We\u2019re about to find out who\u2019s buying into the state-owned hotels company:<\/span> The <\/span>government will \u201cwithin days\u201d make an announcement on stake sales in the <\/span>seven hotels<\/a><\/span> it bundled into one company ahead of a sale. <\/span><\/p>\n

Could the gov\u2019t field offers for up to 20% of TE in the next two weeks?<\/span> The government <\/span>reportedly hopes<\/a><\/span> to wrap up a roadshow and receive offers for a <\/span>10-20% stake<\/a><\/span> in national telecoms provider Telecom Egypt (TE) before the start of Ramadan. Officials are said to be looking to <\/span>onboard several new investors<\/span> to TE, <\/span>capping each stake sale<\/span> at no more than <\/span>3%<\/span> of the company. <\/span><\/p>\n

The latest in the bidding war for Pachin:<\/span> The shareholders of Paint and Chemical Industries <\/span>(Pachin) <\/span>will not consider<\/a><\/span> National Paints Holding\u2019s (NPH) <\/span>revised acquisition offer<\/a><\/span> until two other bidders (Compass Capital and Eagle Chemicals) in the race respond to the latest from the Emirati company.<\/span><\/p>\n

CBE wants advisors for United Bank sale:<\/span> The Central Bank of Egypt (CBE)<\/span> <\/span>has sent<\/a><\/span><\/a><\/span>investment banks<\/a><\/span> \u2014 including several Western banks \u2014 a request to pitch for an advisory role in the sale of United Bank of Egypt, which was almost sold to Saudi Arabia\u2019s sovereign wealth fund before <\/span>talks stalled<\/a><\/span>,<\/span> apparently on a dispute over the valuation. <\/span><\/p>\n

PLENTY OF MACRO NEWS- <\/span><\/p>\n

Inflation soared much faster than <\/span>expected<\/a><\/span> <\/span>to a fresh five-year high of 31.9% in February <\/span>(more on that in Sunday\u2019s EnterpriseAM), which has also pushed the <\/span>non-oil private sector<\/span> to <\/span>contract<\/a><\/span> <\/span>for the <\/span>27th consecutive month<\/span>, albeit at a slower pace. Meanwhile, our<\/span> <\/span>net foreign reserves<\/span> <\/span>were effectively flat<\/a><\/span> at <\/span>USD 34.35 bn<\/span> in February compared to <\/span>USD 34.22 bn in January<\/a><\/span>. R<\/span>eserves fell <\/span>20% last spring<\/a><\/span> on the back of the war in Ukraine and tightening financial conditions.<\/span><\/p>\n

MORE ATTEMPTS TO BRING IN FDI- <\/span><\/p>\n

The Madbouly government <\/span>moved to make it easier<\/a><\/span> for foreigners to become green <\/span>passport holders<\/span>, saying it will grant citizenship if they purchase assets worth no less than USD 300k using hard currency transferred in from abroad (down from a previous USD 500k), or if they establish a solo or joint investment project with an USD 350k investment in addition to depositing USD 100k at the state treasury. They can also get in line for citizenship by depositing a refundable USD 500k into a zero-interest account at an Egyptian bank, or a non-refundable deposit of USD 250k into the state treasury. <\/span><\/p>\n

In another move to get FDI,<\/span> <\/span>the <\/span>New Urban Communities Authority (NUCA)<\/span> <\/span>will reportedly<\/a><\/span> <\/span>hand investors a <\/span>15% break<\/span> on the <\/span>price of land<\/span> if they pay the <\/span>total sum up front using hard currency <\/span>held abroad. <\/span><\/p>\n

A CUSHION AGAINST INFLATION-<\/span><\/p>\n

The Madbouly cabinet <\/span>approved<\/a><\/span> <\/span>an EGP 190 bn package of social support measures<\/span> that <\/span>includes raising public-sector wages and pensions as well as a modest measure of tax relief by raising the income tax exemption threshold. The measures are aimed at mitigating the impact of soaring inflation on the public. <\/span>We expect they will soon be followed by a move to raise the top tax rate for wage tax to 27.5% on gross wages over EGP 800k per year. <\/span><\/p>\n

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GOOD NEWS FOR FINTECH-<\/span> The <\/span>CBE<\/span> has <\/span>issued<\/a><\/span> <\/span>new regulations <\/span>allowing <\/span>contactless <\/span>card payments<\/span> via <\/span>mobile apps<\/span>, a system that <\/span>could allow<\/span> Apple Pay and Samsung Pay, among other e-wallets.<\/span><\/p>\n

AND FOR GREEN <\/span>HYDROGEN<\/span>- <\/span>China Energy<\/span> <\/span>could start working<\/a><\/span> on a <\/span>USD 5.1 bn green hydrogen facility<\/span> in Egypt in May, the company\u2019s CEO, Ye Jianming, said during a meeting with Prime Minister Moustafa Madbouly. <\/span><\/p>\n

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WHAT\u2019S HAPPENING NEXT WEEK-<\/span><\/p>\n

<\/span>SCZone heads to Vietnam:<\/span> The Suez Canal Economic Zone (SCZone) is heading to Hanoi from 12 to 17 March in the latest stop on its roadshow to drum up FDI to the zone, according to an <\/span>SCZone statement<\/a><\/span>. SCZone CEO Walid Gamal El Din is set to discuss potential investment with Vietnamese textile, auto, tire and communications companies. <\/span><\/p>\n

We\u2019re also definitely keeping an eye out for more privatization news<\/span>, as the state continues its roadshow for Telecom Egypt\u2019s stake sales, the procedures for which it plans to start before Ramadan.<\/span><\/p>\n

Check out our full business calendar on the web<\/a><\/span> for a comprehensive listing of upcoming news events, national holidays and news triggers.<\/span><\/p>\n

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