{"id":608484,"date":"2023-10-20T00:00:00","date_gmt":"2023-10-20T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2023\/10\/20\/humanitarian-aid-should-be-heading-to-gaza-from-egypt-we-want-to-increase-our-loan-from-the-imf\/"},"modified":"2023-10-20T00:00:00","modified_gmt":"2023-10-20T00:00:00","slug":"humanitarian-aid-should-be-heading-to-gaza-from-egypt-we-want-to-increase-our-loan-from-the-imf","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2023\/10\/20\/humanitarian-aid-should-be-heading-to-gaza-from-egypt-we-want-to-increase-our-loan-from-the-imf\/","title":{"rendered":"Humanitarian aid should be heading to Gaza from Egypt + We want to increase our loan from the IMF"},"content":{"rendered":"

Good morning, friends, and \u2014 as always \u2014 happy Friday to us all.<\/strong> This week has been jam-packed with news about the regional conflict and the updates that frequent our news feed daily. Meanwhile, economic and debt updates have also dominated the local front, too along with a side of privatization news. <\/p>\n

Cultural events have always been a refuge when traveling out of town is out of season.<\/strong> This weekend, we have the guide for the cultural event of the year, The Downtown Contemporary Arts Festival<\/a>, where you can sample the best of what Egypt and the world has to offer when it comes to theater, performance art, video installation, music and dance, alongside a myriad of workshops. <\/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 your weekend.<\/p>\n

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

Israel\u2019s siege of Gaza dominated headlines at home and around the world <\/strong>for the second week as the human toll of its assault on the strip intensified. On the economic front, we saw a handful of potential loan agreements as well as a few developments stemming from our FX crunch.<\/p>\n

THE ISRAEL-PALESTINE CONFLICT WAS THE BIG STORY OF THE WEEK-<\/strong><\/p>\n

As many as <\/strong>500 people were killed<\/a><\/strong> on Tuesday after Israel bombed a hospital in Gaza<\/strong>, Palestinian health authorities said. Israel blamed the attack on Palestinian Islamic Jihad. The Israeli military claims the blast was the result of a rocket fired by PIJ that failed after launching. <\/p>\n

President Abdel Fattah El Sisi accused Israel of being responsible <\/strong>in a statement that condemned \u201cin the strongest terms this deliberate bombing.\u201d<\/p>\n

Egypt condemned Israel\u2019s displacement of Gazans: <\/strong>Our Foreign Ministry denounced Israel\u2019s<\/a>order<\/a> that some 1 mn Palestinians in Gaza leave their homes as a \u201cgrave violation\u201d of international law. El Sisi rejected calls by Israel and Western nations to allow Gazans into Egypt, saying that Palestinians should remain on their land.<\/p>\n

An \u201cunprecedented human catastrophe\u201d is taking place in Gaza nearly two weeks into Israel\u2019s <\/strong>siege,<\/strong> the head of the UN\u2019s Palestinian refugee agency, Philippe Lazzarini, said earlier this week<\/a>. Thousands of people are without shelter, with an estimated 1 mn people displaced by the conflict. <\/p>\n

Aid could enter Gaza as early as today:<\/strong> Egypt may be able to open the Rafah border crossing into Gaza to allow the delivery of \u201climited\u201d humanitarian aid as of today, US President Joe Biden said on Wednesday. Israel has imposed a total blockade on the strip, triggering a shortage of water and food and leaving hospitals on the verge of collapse.<\/p>\n

Jordan canceled its planned four-way summit in Amman<\/strong> that aimed to bring together the leaders of Jordan, Egypt, the US and the Palestinian Authority due to Washington\u2019s stance on the war. Jordan\u2019s King Abdullah instead made his way to Cairo<\/a>, where he met with El Sisi yesterday. <\/p>\n

HERE AT HOME, THERE WERE ALSO PLENTY OF ECONOMIC DEVELOPMENTS-<\/strong><\/p>\n

#1- The government is looking to expand its IMF loan program<\/strong> and is reportedly in talks with the IMF to raise its USD 3 bn loan program to more than USD 5 bn<\/a>. <\/p>\n

#2- The IMF expects our budget deficit to increase to <\/strong>10.7% of GDP<\/a><\/strong> this year<\/strong> from an estimated 4.6% the previous year. The IMF had projected a 9.2% deficit this fiscal year in its previous forecast in April.<\/p>\n

#3- Banks in Egypt <\/strong>began imposing<\/a><\/strong> strict new instructions from the Central Bank of <\/strong>Egypt (CBE) on credit card use for FX transactions<\/strong> at home and abroad. Credit card holders will now only be allowed<\/a> to spend the equivalent of EGP 7,750 per month in Egypt. Individuals wanting to use their cards abroad will need to contact their banks and provide proof they\u2019re planning to travel before card issuers allow a more generous limit. <\/p>\n

#4- Standard Chartered sees no devaluation or changes to interest rates before the end <\/strong>of this year: <\/strong>The bank thinks that Egypt will not see further devaluations<\/a> of the EGP or changes in interest rates until the end of the year.<\/p>\n

WE ALSO HAD A GOOD SERVING OF DEBT NEWS-<\/strong><\/p>\n

#1- Egypt closed its <\/strong>maiden panda bond issuance<\/a><\/strong> in China this week with a CNY 3.5 bn <\/strong>(USD 478.7 mn) issuance<\/strong>. The three-year securities were priced at a 3.51% annual rate, lower than the yield on USD-denominated debt. The proceeds will be used to finance the country\u2019s sustainable development goals.<\/p>\n

#2- The government expects to borrow at least USD 1.5 bn between now and the end of <\/strong>the year<\/strong>: Planned borrowing<\/a> includes the USD 500 mn issuances of CNY-denominated bonds and JPY-denominated bonds in November. <\/p>\n

\u2026and wants to secure as much as USD 3 bn in fresh debt financing by the end of the <\/strong>fiscal year<\/strong> through bond issuances and international loans, a senior Finance Ministry official told us<\/a>. The fresh funds will help bolster the budget and help the country meet any emergency financing needs. <\/p>\n

#3- EBRD could be directing USD 325 mn to local SMEs and green projects\u2026 <\/strong>The European Bank for Reconstruction and Development (EBRD) is considering lending<\/a> USD 325 mn to four local banks for on-lending to local SMEs and green projects before the end of 2023.<\/p>\n

\u2026and up to EUR 165 mn to upgrade the country\u2019s electricity transmission grid. <\/strong>The European Bank of Reconstruction and Development (EBRD) is also considering providing a sovereign loan of up to EUR 165 mn<\/a> for on-lending to the state-owned Egyptian Electricity Transmission Company (EETC). <\/p>\n

#4- IFC to help finance our MSMEs:<\/strong> The International Financial Corporation (IFC) will provide state-owned Banque Misr with a USD 234 mn loan<\/a> for on-lending to privately-owned micro, small, and medium-sized enterprises (MSMEs), with half of the loan earmarked for women-led businesses. <\/p>\n

#5- <\/strong>El Sewedy copper unit lands EBRD loan:<\/strong> Elsewedy Electric subsidiary United Metals Company (UMC) will receive<\/a> a USD 50 mn loan from the EBRD to finance its working capital. The loan will help UMC\u2019s hard-currency working capital needs, supporting its ability to import important raw materials like copper cathodes. <\/p>\n

AS WELL AS A PRIVATIZATION UPDATE-<\/strong><\/p>\n

Shell and China\u2019s North Petroleum want a piece of Wataniya: <\/strong>Shell Oil has reportedly<\/a>teamed up<\/a> with an unnamed investor owned by the Saudi government to target a stake in the military-owned filling station operator Wataniya. China\u2019s North Petroleum also submitted an offer. The Sovereign Fund of Egypt is working to sell at least 10% \u2014 and potentially as much as 100% \u2014 of Wataniya as part of the state\u2019s privatization program. <\/p>\n

Six companies are now reportedly in the running:<\/strong> Taqa Arabia, Abu Dhabi National Oil Company (Adnoc), Emirates National Oil Company (ENOC), and Saudi firm Petromin have all reportedly submitted offers for the Wataniya stake. Bids reportedly range between USD 250 mn and USD 280 mn. <\/p>\n

AND A BIG INVESTMENT TICKET-<\/strong><\/p>\n

#1- Chinese companies could invest as much as <\/strong>USD 15.5 bn<\/a><\/strong> in the Suez Canal <\/strong>Economic Zone (SCZone)<\/strong> after a series of agreements were signed at China\u2019s Belt and Road Forum. <\/p>\n

#2- West Qantara could see USD 101.3 mn in textile investments: <\/strong>The SCZone and a number of Chinese companies signed agreements to establish textile projects worth a combined USD 101.3 mn in investment<\/a> in the West Qantara Industrial Zone.<\/p>\n

#3- <\/strong>China\u2019s largest cable manufacturer to expand SCZone factory:<\/strong> Chinese cable manufacturer Hengtong will invest<\/a> USD 18 mn to expand its factory in the TEDA zone. The company will add 21k sqm to its factory in the Chinese industrial zone \u2014 almost four times its current size \u2014 allowing it to produce up to 2 mn km of cables a year.<\/p>\n

M&A WATCH-<\/strong><\/p>\n

Dice\u2019s founding family is set to increase its share of the company to c. 80%: <\/strong>Founders of EGX-listed clothing company Dice Sports and Casual Wear offered to purchase<\/a> more than 838 mn of its shares \u2014 46.9% of the company \u2014 at EGP 0.65 per share, putting the total acquisition value at EGP 544.8 mn. <\/p>\n

SUEZ CANAL-<\/strong><\/p>\n

The SCA is hiking transit fees next year: <\/strong>Starting 15 January 2024, the Suez Canal Authority (SCA) will hike transit fees<\/a> by 15% for a number of different vessel types including oil tankers, LNG and LPG carriers, and container ships. <\/p>\n

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

The House was back in session this week and signed off on a raft of new bills that <\/strong>include:<\/strong><\/p>\n