{"id":588331,"date":"2023-06-09T00:00:00","date_gmt":"2023-06-09T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2023\/06\/09\/good-news-bad-news-on-the-macro-front-imf-deputy-md-is-in-town-next-week\/"},"modified":"2023-06-09T00:00:00","modified_gmt":"2023-06-09T00:00:00","slug":"good-news-bad-news-on-the-macro-front-imf-deputy-md-is-in-town-next-week","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2023\/06\/09\/good-news-bad-news-on-the-macro-front-imf-deputy-md-is-in-town-next-week\/","title":{"rendered":"Good news, bad news on the macro front + IMF deputy MD is in town next week"},"content":{"rendered":"

Good morning, friends, and a very happy FRIDAY. <\/span>For those of us whose children finished <\/span>exams (and young, precocious readers of Enterprise) Mabrouk. As for the rest, we\u2019re praying for all parents and students out there to have a smooth few weeks \u2014 before the exodus to Sahel begins later this month. <\/span><\/p>\n

Stuck in Cairo, but you have a young one who cannot stop kicking the ball around (and <\/span>heaven forbid is actually good at it)? <\/span>Check out our list of football academies that can help train your youngsters, and potentially put them on the professional track. We have more in today\u2019s Enterprise Guide below. <\/span><\/p>\n

PSA- Reports of a shark attack in Hurghada that killed a Russian tourist emerged <\/span>yesterday afternoon<\/span> and have received widespread pickups in the <\/span>foreign press<\/a><\/span>. The Russian Consulate in Hurghada has confirmed in a <\/span>statement<\/a><\/span>that the man was killed at Dream Beach hotel, where tourists are currently banned from swimming. The statement urged citizens to follow coast guard rules on swimming. <\/span><\/p>\n

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

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<\/span>LAST WEEK IN 3 MINS- It was an eventful week in Omm El Donia<\/span>, with plenty of macro and <\/span>privatization updates keeping us busy. And we have plenty to smile about\u2026<\/span><\/p>\n

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

#1- Vodafone Egypt could be back up for sale: <\/span>Qatar\u2019s sovereign wealth fund, the Qatar <\/span>Investment Authority (QIA),<\/span>is reportedly close<\/a><\/span> to acquiring a 25-30% stake in Vodafone Egypt from Telecom Egypt through Qatari ruling family\u2019s telco Ooreedo, with the sale potentially closing before the end of the month. TE owns a 45% stake in Vodafone Egypt, while the government owns some 70% of TE. The QIA had reportedly been eyeing TE\u2019s entrie 45% stake earlier, which was said to have stalled talks with the government. <\/span>We learned<\/a><\/span> earlier this week that the two sides recently resumed negotiations.<\/span><\/p>\n

There could be more<\/span>: Local reports also say that if the company is able to acquire TE\u2019s full stake it will look to enter talks with Vodacom, which owns the remaining 55% of the company. Vodacom, the South African subsidiary of Vodafone Group, <\/span>acquired the majority stake<\/a><\/span> from its parent company last year.<\/span><\/p>\n

#2- EDC could be up next for a stake sale: <\/span>The Egyptian government is reportedly in talks with strategic investors \u2013 the majority of which are Emarati \u2013 to sell <\/span>a 49% stake<\/a><\/span> in the Egyptian Drilling Company (EDC) before the end of 3Q 2023, according to a <\/span>CNN Business Arabic<\/span> source.<\/span><\/p>\n

#3- And Elab could very soon see an EGX listing:<\/span> Egyptian Linear Alkyl Benzene (Elab) will be listed on the EGX this month with the government seeking to sell more than a 40% stake in the company, according to the source.<\/span><\/p>\n

#3-<\/span>Port Said Port operator heading to the EGX:<\/span> The Suez Canal Economic Zone\u2019s (SCZone)<\/span> board of directors <\/span>signed off<\/a><\/span> yesterday on selling a 20% stake in Port Said Container and Cargo Handling (PSCCHC) in an IPO on the EGX. SCZone currently holds a 39% stake in PSCCHC. The <\/span>Qatari Investment Authority<\/a><\/span> and <\/span>Abu Dhabi Ports<\/a><\/span> had previously been in talks to acquire stakes in PSCCHC, along with Damietta Container and Cargo Handling. <\/span><\/p>\n

SPEAKING OF THE EGX- Taqa Arabia\u2019s shares <\/span>were listed<\/a><\/span> temporarily on the EGX<\/span>. The company will have six months to meet listing requirements and obtain regulatory approvals.<\/span><\/p>\n

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

#1- We have a new smartphone assembly plant courtesy of Samsung coming to Beni <\/span>Suef: <\/span>South Korea\u2019s Samsung Electronics is looking to set up <\/span>a new factory<\/a><\/span> for smartphone assembly in its industrial complex in Beni Suef in 4Q 2023. The new 6k sqm facility will produce phones for the local market and for export.<\/span><\/p>\n

#2- And a new plastics factory in the SCZone:<\/span> Indian firm Abdos signed an <\/span>agreement to<\/a><\/span>build a plastics factory worth USD 30 mn in Orascom Industrial Parks\u2019 (OIP) Sokhna complex.<\/span><\/p>\n

IT WAS ALSO EVENTFUL ON THE GREEN ENERGY FRONT-<\/span><\/p>\n

UAE\u2019s Masdar, Infinity Power, and Hassan Allam Utilities <\/span>signed a land allocation<\/a><\/span>agreement<\/a><\/span> with the Egyptian government for a 10-GW wind farm in Sohag, which is set to <\/span>be one of th<\/span>e largest in the world. The developers will in the \u201ccoming period\u201d carry out feasibility, investor onboarding and environmental studies to bring the project online, with plans to reach financial close within the next 15 months. <\/span><\/p>\n

ECONOMY-<\/span><\/p>\n

#1- FX reserves continued to rise:<\/span> Net foreign reserves inched up to USD 34.66 <\/span>bn in May from USD 34.55 bn in April, according to <\/span>central bank figures<\/a><\/span> released last week. <\/span><\/p>\n

#2- And our non-oil private sector contracted at its slowest pace in 15 months in May: <\/span>The country\u2019s PMI rose <\/span>to 47.8 in May<\/a><\/span> from 47.3 in April, marking the second consecutive month of improvement but still falling below the 50.0 mark that separates growth from contraction. The reading suggests \u201cfurther promise that current economic headwinds were beginning to dissipate,\u201d said David Owen, senior economist at S&P Global Market Intelligence. <\/span><\/p>\n

#3- That said, the World Bank cut Egypt\u2019s growth outlook for FY2023-2024 to 4.0% <\/span>due to ongoing economic challenges. The <\/span>new outlook<\/a><\/span> marks a downward revision of 0.8 percentage points from its last forecast in January.<\/span><\/p>\n

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

The senate approved the government\u2019s<\/span>FY 2023-24 development plan<\/a><\/span> which aims to draw<\/span> EGP 1.65 tn in investment, EGP 1.05 tn of which will come from the government and EGP 600 bn from the private-sector. The plan also targets 4.1% GDP growth for the coming fiscal year and does not does not allocate public money towards new development projects in the coming fiscal year. <\/span><\/p>\n

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

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<\/span>IMF deputy managing director Antoinette Sayeh is expected to <\/span>land<\/a><\/span> in Cairo <\/span>in the coming <\/span>days to meet with Egyptian officials regarding the government\u2019s economic reform program. Sayeh will attend the launch of an IMF paper on Sunday, according to <\/span>Ahram Online<\/span>, which didn\u2019t provide further details about her schedule.<\/span><\/p>\n

REMEMBER-<\/span>Originally scheduled for mid-March<\/a><\/span>, the IMF has postponed the first review of <\/span>Egypt\u2019s loan program<\/a><\/span> due to <\/span>delays implementing<\/a><\/span> several of its key conditions. Under the USD 3 bn facility, Egypt committed to adopting a fully flexible exchange rate and accelerating its privatization program as a means to ending the prolonged FX crunch. The government aims to <\/span>raise USD 2 bn<\/a><\/span> via asset sales by the end of this month.<\/span><\/p>\n

Inflation figures should be out next week: <\/span>Consumer prices are expected to have resumed their upward trajectory last month, according to the median forecast in a <\/span>Reuters<\/a><\/span> poll of 13 analysts which puts annual urban inflation at 31.4%, up from <\/span>30.6%<\/a><\/span> in April. Inflation has soared to <\/span>near-record highs<\/a><\/span> this year on the back of a series of currency devaluations, the FX crunch and higher energy prices.<\/span><\/p>\n

The House of Representatives reconvenes <\/span>on Sunday. On the agenda:<\/span><\/p>\n