{"id":584482,"date":"2023-03-31T00:00:00","date_gmt":"2023-03-31T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2023\/03\/31\/its-the-second-week-of-ramadan-is-the-fy-2023-2024-draft-budget-coming-next-week\/"},"modified":"2023-03-31T00:00:00","modified_gmt":"2023-03-31T00:00:00","slug":"its-the-second-week-of-ramadan-is-the-fy-2023-2024-draft-budget-coming-next-week","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2023\/03\/31\/its-the-second-week-of-ramadan-is-the-fy-2023-2024-draft-budget-coming-next-week\/","title":{"rendered":"It\u2019s the second week of Ramadan + is the FY 2023-2024 draft budget coming next week?"},"content":{"rendered":"

Good morning, friends, and welcome to the second week of Ramadan.<\/span> Are you a <\/span>\u201cRamadan is flying by\u201d person or a \u201cIt is crawling at a snail\u2019s pace\u201d person? On most days, we\u2019re the latter. Not helping is the flurry of privatization and M&A news\u2026and the wait for the next Mosalsal episode. <\/span><\/p>\n

SO, WHEN DO WE EAT?<\/span> We\u2019ll be breaking our fasts this evening at 6:14pm CLT and you\u2019ll <\/span>have until 4:20am tomorrow to hydrate and have a bite to eat.<\/span><\/p>\n

Look for us each weekend for a<\/span>three-minute guide to the week that was,<\/span> and for stories to read, restaurants and movies to try, videos to watch, and podcasts to which you may want to listen on Friday and Saturday (that being the weekend for the vast majority of our readers).<\/span><\/p>\n

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

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

<\/span>The week ended with a critical interest rate decision by the Central Bank of Egypt. <\/span>The CBE <\/span>hiked (<\/a><\/span>pdf<\/a><\/span>)<\/a><\/span> interest rates by 200 bps amid rising inflation and continued pressure on the EGP \u2014 a decision widely expected by our <\/span>poll<\/a><\/span>of analysts last week. The CBE cited the rapid rise in consumer prices as the rationale behind its decision, adding that the decision aims to contain inflationary pressures\u201d as well as \u201cavoid secondary supply shocks\u201d resulting from inflationary expectations.<\/span><\/p>\n

^^ We\u2019ll have chapter and verse<\/span> on this in Sunday\u2019s EnterpriseAM edition. <\/span><\/p>\n

PRIVATIZATION WATCH- <\/span><\/p>\n

#1- Bidding war for Pachin heats up: <\/span>The Financial Regulatory Authority (FRA) <\/span>approved<\/a><\/span>several new takeover bids for state-owned paint maker Paint and Chemical Industries (Pachin), from National Paints Holding (NPH) and rival bidder Eagles Chemicals. The competition heated up <\/span>on Monday<\/a><\/span> when Eagle Chemicals raised its offer to EGP 37.00 per share \u2014 EGP 1.00 higher than the rival bid submitted by NPH last week. Shareholders of Pachin have until market close on 12 April to decide whether to sell shares to Eagle or NPH.<\/span><\/p>\n

Compass enters the fray?<\/span> Compass Capital <\/span>could also be back<\/a><\/span> in the race and could <\/span>potentially submit a rival offer in the \u201ccoming days,\u201d sources reportedly tell Al Mal. <\/span><\/p>\n

#2- The privatization program gets a major co-sign from the IFC: <\/span>International Finance <\/span>Corporation (IFC) Regional VP for Africa S\u00e9rgio Pimenta was in town earlier this month for talks with the government on how best the IFC can participate in the program. In an <\/span>exclusive interview<\/a><\/span> with Enterprise, Pimenta details the many ways the IFC can help, including as an adviser as well potentially providing financing for investors. The IFC has been actively encouraging investors to take part, he tells us, adding that he believes it will pave the way for FDI. <\/span><\/p>\n

#3- \u2026And a gentle nod from Morgan Stanley: <\/span>Morgan Stanley analysts <\/span>noted this week<\/a><\/span>that \u201clarge-scale\u201d privatization is the key to ending our FX liquidity crisis.<\/span> The bank estimates that Egypt could bring in as much as USD 7 bn through asset sales next year bringing us to USD 23-24 bn through to the end of FY2023-24. But large-scale privatization is not going to be easy and delays could be costly, they noted, warning against any stalling in the program.<\/span><\/p>\n

#4- We\u2019re still trying to add more to the list of energy and petchems on sale: <\/span>EGX boss <\/span>Ramy El Dokany held further talks with Oil Minister Tarek El Molla on Monday, to discuss <\/span>potential new listings<\/a><\/span> by state energy and petrochemical firms<\/span>. Oil and petchem companies feature prominently in the program, with reports indicating that six out of eight of the first state firms selling stakes expected to be energy and petchem firms. <\/span><\/p>\n

SHAKE UPS ON THE M&A FRONT- <\/span><\/p>\n

#1- Another GCC suitor for Palm Hills?<\/span> Unnamed Saudi investors are mulling the acquisition <\/span>of Arab African International Bank\u2019s (AAIB) 12.9% stake in EGX-listed Palm Hills Developments (PHD) as the bank looks to exit the high-profile real estate developer, sources familiar with the matter told the <\/span>local press<\/a><\/span> on Wednesday. AAIB was looking to sell its entire stake in PHD to Emirati investment company <\/span>Al Ain Holding<\/a><\/span>, but we haven\u2019t heard anything on Al Ain\u2019s offer since.<\/span><\/p>\n

#2- Giza Systems\u2019 new Saudi owners are on a USD 40 mn shopping spree: <\/span>Giza Systems <\/span>is looking to <\/span>invest up to USD 40 mn<\/a><\/span> to acquire three or four companies this year in the wake of its acquisition by Saudi data firm Solutions by STC. The company is planning to allocate USD 5-10 mn to each transaction, CEO Osama Sorour is reported to have said. While the targets were not named, Sorour noted that Giza Systems will target companies that have a significant presence in the Saudi market as well as an Egypt-based workforce. <\/span><\/p>\n

#3-<\/span>SODIC pulls the curtains on Orascom for Real Estate acquisition:<\/span> Real estate <\/span>developers Orascom Development Egypt (ODE) and SODIC <\/span>have agreed to end talks<\/a><\/span> on <\/span>SODIC\u2019s bid to acquire Orascom for Real Estate (ORE)<\/a><\/span>. SODIC in October submitted a non-binding offer to acquire 100% of ORE for almost EGP 2.5 bn. <\/span><\/p>\n

#4-<\/span>Al Baraka Bank<\/a><\/span> is eyeing undisclosed shares in Banque du Caire\u2019s <\/span>digital payments<\/a><\/span>subsidiary <\/span>Taly<\/a><\/span> and has tapped <\/span>Elite Consultancy House<\/a><\/span> to conduct a fair value study. <\/span><\/p>\n

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

<\/p>\n

<\/span> Draft FY 2023-2024 budget makes it to the House: <\/span>We should be <\/span>getting a more detailed look at the FY 2023-2024 budget as t<\/span>he Finance Ministry should have submitted the draft FY 2023-2024 budget to the House of Representatives yesterday. <\/span><\/p>\n

MPs should be happy as the Madbouly Cabinet <\/span>approved<\/a><\/span> on Wednesday a draft budget that will <\/span>see more social spending.<\/span> The government plans to increase its spending on social safety programs by 28%to an estimated EGP 455 bn, while also raising spending on food subsidies by 20% to EGP 108 bn and fuel subsidies by 24% to EGP 35.9 bn. The budget sees total spending increase 30.5% to EGP 2.8 tn.<\/span><\/p>\n

The draft budget is expected to land with the House Budget Committee on Sunday. <\/span>The <\/span>committee will then hold discussions over the next two months before the committee issues its report, House Budget Committee chairman Fakhry El Feki told reporters on Wednesday. <\/span><\/p>\n

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

YOUR MOST CLICKED LINKS-<\/span><\/p>\n