{"id":604108,"date":"2023-08-25T00:00:00","date_gmt":"2023-08-25T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2023\/08\/25\/unemployment-numbers-are-down-govt-in-talks-to-potentially-sell-down-stake-in-eastern-company\/"},"modified":"2023-08-25T00:00:00","modified_gmt":"2023-08-25T00:00:00","slug":"unemployment-numbers-are-down-govt-in-talks-to-potentially-sell-down-stake-in-eastern-company","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2023\/08\/25\/unemployment-numbers-are-down-govt-in-talks-to-potentially-sell-down-stake-in-eastern-company\/","title":{"rendered":"Unemployment numbers are down + Gov\u2019t in talks to potentially sell down stake in Eastern Company"},"content":{"rendered":"

Good morning, friends, and happy FRIDAY to all of you, whether you\u2019re in Sahel or in Cairo. <\/strong>We wish you a fun weekend before the start of the academic school year, or to those of you who started, a calm and restful one before the chaos of the school week. <\/p>\n

Sahel season may be coming to an end, but that\u2019s no reason to ditch your health goals <\/strong> just yet <\/strong> \u2014 and intermittent fasting could be the right fit for you to keep your health in check as we begin the slide into the post-summer \/ almost-fall season. Our Enterprise Guide this week breaks down what intermittent fasting is, exactly, as well as the pitfalls to watch out for that make this lifestyle incompatible with some of us. <\/p>\n

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

LAST WEEK IN 3 MINS- The news cycle last week was largely shaped by <\/strong> privatization news<\/strong>, along with a smattering of macro and investment updates. <\/p>\n

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

#1- S&P Global anticipates tighter macroeconomic conditions in Egypt in the months to <\/strong> come: <\/strong> The ratings agency expects<\/a> inflation to peak at close to 39% in October and the value of the EGP to fall to 37.00 against the USD by the end of the year if the government moves forward with another currency devaluation. <\/p>\n

#2- Unemployment inched down to <\/strong>7.0% in 2Q 2023<\/a><\/strong>, down 0.1 percentage points from 1Q 2023. Unemployment was down 0.2 percentage points compared with the same period last year.<\/p>\n

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

#1- Eastern Company confirmed reports of a potential stake sale: <\/strong> The government could<\/a> sell up to 15.3%<\/a> of state-owned tobacco manufacturer Eastern Company after receiving offers from several foreign investors. The firm has not yet singled out a preferred offer nor has the company disclosed the interested parties. The confirmation came after reports earlier in the week<\/a> that Philip Morris\u2019 United Tobacco entered talks with the government to acquire a minority stake in the company.<\/p>\n

WHAT WE KNOW SO FAR- <\/strong> Japan Tobacco International (JTI) and an Emirati state institution are potentially among the players in talks with the government to snap up the stake. We also know that the government is looking to maintain at least a blocking minority once a sale has been finalized. <\/p>\n

#2- BdC could IPO this year: <\/strong>The government is planning to offer a 49% stake in state-owned lender Banque du Caire (BdC) in a long-awaited IPO on the EGX in 4Q 2023<\/a>. The state has been planning to sell a stake in BdC since 2016 but has delayed the IPO multiple times due to unfavorable market conditions. <\/p>\n

#3- No due diligence on United Bank just yet: <\/strong> Investors interested in acquiring stakes in United Bank will begin due diligence by the end of September<\/a>, contrary to a press report earlier this week that claimed three banks had already begun the process. A number of international financial institutions are currently interested in acquiring shares in the lender, but no further information was provided.<\/p>\n

AT THE NEXUS BETWEEN PRIVATIZATION + INVESTMENT- <\/strong>The redevelopment of the former NDP HQ is moving forward: Prime Minister Moustafa Madbouly last week transferred<\/a> the land of the dissolved National Democratic Party\u2019s headquarters to two developers who, according to the chairman of the Sovereign Fund of Egypt\u2019s tourism sub-fund, will embark on a USD 5 bn project backed by Gulf capital.<\/p>\n

AND ON THE INVESTMENT FRONT- <\/strong><\/p>\n

GV Investments gets GAFI green light on EGP 500 bn industrial project: <\/strong> The General Authority for Investment and Freezones (GAFI) approved GV Investments \u2019 ambitious Tarboul industrial project<\/a> in Giza. The 26k-feddan city, which will require EGP 500 bn (USD 16.2 bn) is expected to include industrial zones, a dry port and other logistical facilities, financial and business centers, and residential areas, according to its website.<\/p>\n

ENERGY- <\/strong><\/p>\n

Household electricity prices are staying put for another 4.5 months: <\/strong> The cabinet approved<\/a> a decision<\/a> to leave household electricity prices frozen until 1 January, 2024. The decision is aimed at easing financial pressures on the public amid rising inflation. <\/p>\n

We could soon be importing more Israeli gas: <\/strong> Israel will increase gas exports<\/a> to Egypt from its offshore Tamar field, Israeli Energy Minister Israel Katz said. Israel will raise gas exports by an additional 38.7 bn cubic meters (bcm) over 11 years, according to the ministry, which translates to 3.5 bcm per year if you average it out. This could later be increased to 44 bcm. Egypt imported 4.62 bcm<\/a> of gas from Israel last year.<\/p>\n

WE ALSO HAD A FEW M&A TIDBITS- <\/strong><\/p>\n

#1- Rameda Pharma is zeroing in on two potential acquisitions in the medical sector<\/strong>, the company said earlier this week<\/a>. The targets are a pharma company and a cosmeceuticals player, with Rameda looking at stakes of over 50% in each firm. <\/p>\n

#2- Dragon Oil wants in on Egypt\u2019s Nargis gas block: <\/strong>Emirates National Oil Company (ENOC) subsidiary Dragon Oil wants to purchase<\/a> a stake of at least 20% in the Nargis offshore concession in the Eastern Mediterranean from Chevron.<\/p>\n

AND SOME DEBT NEWS- <\/strong><\/p>\n

#1- We have another USD 125 mn EBRD loan for Damietta Port on the horizon: <\/strong>The European Bank for Reconstruction and Development (EBRD) is expected to approve<\/a> a USD 125 mn loan on 4 October to finance the \u201csuperstructure and purchase of equipment\u201d for Damietta Port\u2019s second container terminal.<\/p>\n

#2- <\/strong> The Egyptian German Industrial Corporation <\/strong> ( EGIC) could be getting a USD 50 mn <\/strong> credit facility <\/strong> from the European Bank for Reconstruction and Development (EBRD) to finance its operations<\/a>. <\/p>\n

BANKING- <\/strong><\/p>\n

#1- Hassan Abdalla was reappointed as the governor of the Central Bank of Egypt <\/strong> (CBE) <\/strong>for another one-year term<\/a> starting 18 August. <\/p>\n

#2- Looser regs on sukuk issuances: <\/strong>Companies will now be able to sell sukuk without first acquiring a credit rating after the Financial Regulatory Authority (FRA) waived the requirement<\/a>. <\/p>\n

MEANWHILE IN THE NATIONAL DIALOGUE- <\/strong><\/p>\n

The National Dialogue signed off on its first set of recommendations <\/strong>for political, economic, and social reforms, three months after it kicked off discussions. The recommendations<\/a>, which were last week presented to President Abdel Fattah El Sisi for consideration, include:<\/p>\n