{"id":611090,"date":"2023-12-01T00:00:00","date_gmt":"2023-12-01T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2023\/12\/01\/this-weekend-gaza-truce-expires-acud-ipo-could-pull-in-egp-150-bn\/"},"modified":"2023-12-01T00:00:00","modified_gmt":"2023-12-01T00:00:00","slug":"this-weekend-gaza-truce-expires-acud-ipo-could-pull-in-egp-150-bn","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2023\/12\/01\/this-weekend-gaza-truce-expires-acud-ipo-could-pull-in-egp-150-bn\/","title":{"rendered":"THIS WEEKEND: Gaza truce expires + ACUD IPO could pull in EGP 150 bn"},"content":{"rendered":"

Good morning friends, and welcome to the weekend. <\/strong>Alas, winter has cometh and tis\u2019 the season to consider where you want to spend the holidays.<\/p>\n

Considering that our wallets are still gasping for air, <\/strong>we have considered some winter destinations that defy the usual choices and are also more budget-friendly.<\/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-<\/strong><\/p>\n

CEASEFIRE AGREEMENT EXPIRES IN GAZA-<\/strong><\/p>\n

#1<\/strong>- <\/strong>The week-long temporary ceasefire expired this morning after Israel resumes airstrikes on Gaza, <\/strong>claiming that Hamas has violated the truce by firing a rocket towards Israel, AlArabiya reports<\/a>.<\/p>\n

Initially, Hamas and Israel agreed to extend the four-day ceasefire that started on Friday<\/strong>by 48 hours<\/strong> under a pact brokered by Egypt, Qatar, and the US. The initial truce was scheduled to expire on Tuesday but was pushed to end on Thursday<\/a> after Hamas agreed to release more hostages.<\/p>\n

#2- <\/strong>Since the initial ceasefire went into effect, Hamas released 69 hostages in exchange<\/strong> for Israel <\/strong>releasing 150 Palestinians<\/a><\/strong>.<\/strong> Day five of the prisoner exchange saw Hamas release an additional 13 hostages, while Israel freed 30 Palestinians, bringing the running total to some 82 Israelis released in exchange for 180 Palestinians. <\/p>\n

#3- Israel might be releasing some Palestinians \u2014 but it\u2019s arresting even more:<\/strong> While Israel released 150 Palestinians since the truce entered into force, it has arrested 168<\/a> in the West Bank during the same period.<\/p>\n

#4- Aid trucks eventually increased to around 200 per day. This comes <\/strong>days after<\/a><\/strong> the<\/strong> temporary ceasefire came into effect<\/strong>, but it still remains far below the 500 trucks that crossed the border before the war. <\/p>\n

Israel has also been allowing <\/strong>130k liters of fuel<\/a><\/strong> a day into Gaza<\/strong>, which is still just over 10% of pre-war volumes.<\/p>\n

#5- An extended truce wasn\u2019t enough to meet Gaza\u2019s huge aid needs:<\/strong> \u201cEven with that additional amount of time, it will be impossible to satisfy all the dramatic needs of the population,\u201d UN Secretary-General Antonio Guterres told reporters<\/a>. <\/p>\n

\u2026and the lack of aid is causing a surge in disease outbreaks. <\/strong>WHO has warned<\/a> that more people could die from disease than from bombing in Gaza as long as the healthcare system remains defunct. <\/p>\n

#6- The Biden administration is reportedly urging Israel to refrain from carpet bombing <\/strong>south Gaza <\/strong>in the manner it did in the north, and instead use more precision<\/a> to target Hamas operatives. <\/p>\n

...and some European governments have also used the pause to intensify their criticism<\/strong> of Israel\u2019s war<\/strong>: The Spanish prime minister accused Israel<\/a> of indiscriminate violence and called for a Palestinian state, while The UK\u2019s new foreign secretary, David Cameron, called the expulsion of Palestinians in the West Bank by extremist settlers \u201c completely unacceptable.\u201d<\/p>\n

MEANWHILE, WE <\/strong>A HANDFUL OF PRIVATIZATION DEVELOPMENTS-<\/strong><\/p>\n

#1- ACUD could raise more than EGP 150 bn when it goes ahead with its anticipated IPO<\/strong> on the EGX<\/strong>. Administrative Capital for Urban Development (ACUD), a joint venture between the military and the Housing Ministry, plans to offer 5-10% of its shares<\/a> on the Egyptian Exchange in a sale that some have speculated could be the largest-ever public share sale in Egypt.<\/p>\n

#2- United Bank stake sale could be announced this year: <\/strong>The United Bank is expected to pull back the curtain on its sale agreement in mid-December as it currently awaits mandatory tender offers (MTO) from the bidders, a source at the state-owned lender told Enterprise. Most of the potential buyers have completed due diligence on the bank, the source added.<\/p>\n

United Bank is one of two state-owned banks in which EBRD is reportedly interested in <\/strong>taking a stake.<\/strong> The European Bank for Reconstruction and Development (EBRD) is reportedly<\/a> looking to grab stakes in United Bank and Banque du Caire, two of the three banks \u2014 along with the Arab African International Bank \u2014 slated for the government privatization program.<\/p>\n

#3- An Emirati investor wants 100% of Misr Life Ins. <\/strong>and has submitted an initial offer to<\/a>company owner the Sovereign Fund of Egypt (SFE)<\/a>. The SFE is looking into the offer but is likely to reject it in favor of moving forward with its initial plan of listing 25% of the company\u2019s shares during 1H 2024.<\/p>\n

#4- UAE and Qatar are eyeing pharma acquisitions: <\/strong>Emirati and Qatari sovereign wealth funds and investors are eyeing stakes<\/a> in state-owned pharma companies Chemical Industries Development (CID) and Misr Pharma. Pre-IPO stakes of around 30% in each company could be offered.<\/p>\n

AND <\/strong>A FEW ECONOMY UPDATES-<\/strong><\/p>\n

#1- Some businesses <\/strong>are now required to settle their value-added tax (VAT)<\/a><\/strong>dues<\/a><\/strong><\/a> in FX<\/a><\/strong> if the service<\/strong> or product they offer is invoiced or paid for in foreign currency.<\/strong> Also, businesses can settle their foreign-currency VAT dues in local currency equivalent if they present evidence that they\u2019ve exchanged FX worth the same amount or more than the value of the VAT within a month of the sale.<\/p>\n

Importers won\u2019t have to do the same:<\/strong> The regulatory amendments do not<\/a>apply<\/a> to import operations. VAT will only be collected in FX from companies that are licensed to transact in foreign currency.<\/p>\n

#2- Fitch Ratings downgraded the operating environment score of four of Egypt\u2019s biggest<\/strong> banks <\/strong>on the back of their high exposure to sovereign debt and the FX crisis weighing on investor confidence. Fitch lowered the score<\/a> of the National Bank of Egypt, Banque Misr, Banque du Caire, and CIB to \u2018B-\u2019 from \u2018B\u2019 and revised its outlook to stable from negative. <\/p>\n

#3-<\/strong>More speculation on the inevitable float. <\/strong>The devaluation will follow the presidential election in December and will be joined by a 200 bps interest rate increase, according to Arab World News Agency<\/a> coverage of a Capital Economics report. The exact post-float rate wasn\u2019t explicitly mentioned, but is currently officially set at 30.95 to the USD and 48-53 to the USD in the parallel market. EFG Hermes and BMI are optimistic that a successful float could see the EGP recover a bit.<\/p>\n

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

#1<\/strong>- We are on track with resuming LNG exports:<\/strong> An LNG vessel reportedly arrived<\/a> at one of Egypt\u2019s liquefaction plants at the start of the week. Days later, a government official said we\u2019re going to be resuming gas shipments in January<\/a> after half a year with virtually no LNG leaving our country. <\/p>\n

#2- Egyptian Refining Company (ERC) plans to invest <\/strong>USD 150 mn<\/a><\/strong> to ramp up production<\/strong> levels by 10% over the next three years. The Qalaa Holdings subsidiary\u2019s total output, excluding fuel and losses, recorded 2.3 mn tons in the first half of 2023. <\/p>\n

#3- USD 2 bn <\/strong>green complex<\/a><\/strong> in the works in SCZone: <\/strong>The Suez Canal Economic Zone (SCZone) signed a letter of intent yesterday with China\u2019s Befar Group<\/a> to establish a green chemical complex in East Port Said, according to an SCZone statement<\/a>. The complex will be powered by renewable energy and the first phase will cost USD 500 mn.<\/p>\n

#4- Madbouly signed off on two <\/strong>solar projects:<\/a><\/strong>The cabinet approved a contract for Norway\u2019s Scatec to set up a 1 GW solar power plant with a battery energy storage system. The ministers also gave China\u2019s State Grid the green light to begin feasibility studies on a 10 GW solar project.<\/p>\n

SOME LOAN AGREEMENTS-<\/strong><\/p>\n

#1- The new capital light rail project is getting a USD 250 mn loan:<\/strong> The Chinese consortium contracted to work on the fourth phase of Cairo\u2019s light rail transit (LRT) system will arrange a USD 250 mn soft loan<\/a> from a syndicate of international banks to help finance the project.<\/p>\n

#2- Al Ahly Leasing and Factoring has raised <\/strong>EGP 1.1 bn<\/a><\/strong> via a securitized bond issuance<\/strong> that closed yesterday. The issuance was backed by a EGP 1.7 bn portfolio of leasing contracts securitized by Al Ahly Securitization Company. <\/p>\n

#3-<\/strong>NBE is on the lookout for a USD 50 mn EBRD loan for SMEs:<\/strong> The National Bank of Egypt (NBE) is currently in talks with the European Bank for Reconstruction and Development (EBRD) to obtain a USD 50 mn loan<\/a> to support financing to agricultural projects and SMEs. <\/p>\n

#4- NUCA wrapped its EGP 30 bn securitization program:<\/strong> The New Urban Communities Authority (NUCA) closed a EGP 15 bn securitized bond issuance<\/a>, the second and final issuance of its EGP 30 bn program.<\/p>\n

MORE M&A IN THE PIPELINE-<\/strong><\/p>\n

#1- e-Finance could acquire two companies:<\/strong> State-owned fintech firm e-Finance is in talks to<\/a>acquire<\/a> two retail-focused digital payments companies, the first of which was approved by the board last month and is expected to wrap up by the end of the year. A second acquisition is now under review and could be finalized during 1H 2024.<\/p>\n

#2- Savola\u2019s Panda joins bidding for Alfa stores:<\/strong> Saudi grocer Panda is among three supermarket chains looking to purchase six stores<\/a> from struggling retailer Alfa Market. The company, owned by Saudi food conglomerate Savola, is reported to have already reached an agreement with Alfa to take over its Maadi branch. <\/p>\n

A DISPUTE THAT WAS FINALLY SETTLED-<\/strong><\/p>\n

#1- Egyptian Supreme Administrative Court (SAC) ruled <\/strong>in favor<\/a><\/strong> of LSE-listed gold miner <\/strong>Centamin\u2019s Sukari mine after over a decade of battle. <\/strong>The lawsuit originally challenged the validity of Sukari\u2019s exploitation lease between the Egyptian government, Centamin's Egyptian subsidiary Pharaoh Gold Mines (PGM), and the Egyptian Mineral Resource Authority (EMRA), but the court has now rejected the case citing the claimant as having \u201cno capacity to bring the claim,\u201d seeing as he was not part of the concession agreement. <\/p>\n

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

#1- Fawry\u2019s testing environment <\/strong>was confirmed to have been hacked<\/a><\/strong>, but financial data is safe<\/strong>.<\/strong> A forensic audit of more than 2k servers has found that a portion of its testing environment was hacked last month. The breach resulted in the compromise of some customers\u2019 personal data, but no data that would allow someone to execute financial transactions on the company\u2019s system. Fawry\u2019s thorough investigation has found no evidence that the breach exposed financial data. <\/p>\n

#2- The golden license e-platform is now online:<\/strong> The one-stop shop golden license to set up projects in Egypt can now be applied for online<\/a>. <\/p>\n

AND SOME FOREIGN INVESTMENT INTEREST-<\/strong><\/p>\n

Turkish textile manufacturer K\u00fc\u00e7\u00fck\u00e7alik Group is planning to start work on <\/strong>a USD 500 mn<\/a><\/strong>synthetic fibers factory<\/a><\/strong> in the Suez Canal Economic Zone (SCZone) in January, a move that could reportedly lower the country\u2019s annual import bill by USD 1 bn.<\/p>\n

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

<\/p>\n

Egyptians abroad have until Sunday, 3 December to head to the polls to cast their <\/strong>presidential ballots<\/strong> \u2014 which open today \u2014 and choose between incumbent President Abdel Fattah El Sisi, Al Wafd Party\u2019s Abdel Sanad Yamama, the Egyptian Social Democratic Party\u2019s Farid Zahran, and the Republican People Party\u2019s Party Hazem Omar.<\/p>\n

Egypt Defence Expo runs from 4-7 December (Monday-Thursday)<\/strong> at the Egypt International Exhibition Center.<\/p>\n

The Engineering Export Council of Egypt is heading on <\/strong>a trade mission<\/a><\/strong> to Saudi Arabia <\/strong>9-15 December (Saturday-Friday).<\/p>\n

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

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