Ezz Steel is reportedly looking to acquire the 14% of Ezz Dekheila Steel

Newsletter

08 May 2023

Ezz Steel is reportedly looking to acquire the 14% of Ezz Dekheila Steel owned by the National Investment Bank. Ezz Steel currently holds 64% in Ezz Dekheila. Discussions are ongoing between the businessman, Ahmed Ezz, and the government on the deal, and the two parties are now in the evaluation stage to determine the fair value of the company’s share before the implementation of the sale, which will take place before the end of May. The new deal comes at a time when the government intends to exiting dozens of Egyptian companies in which it owns majority or minority shares, while allowing more room for the private sector in the economy. (Alsharq Business)

The family office of the head of Arabia Investments Holding has submitted a binding offer to acquire significant minority stakes in two of the EGX-listed company’s subsidiaries.
JAF Investment, which is headed up by AIH chairman Gamal Abdelfatah Othman, has offered to purchase a 30% stake in SME finance firm UE Finance for 147 million EGP and a 30% stake in Rawaj Consumer Finance for 30 million EGP in two all-cash transactions. The company says it has “more than 30 years of exposure in the contracting and real estate sector in Egypt and the UAE.” Its main focus is private equity investment in several sectors including real estate, non-banking financial services, contracting, healthcare, education, automotive services and trading, and logistics and warehousing. (EGX)
Egypt generated a current account surplus for the first time since 2014 in 2Q FY 2022-2023 due primarily to falling imports.
The current account turned to a 1.41 billion USD surplus during the October-December period, compared to deficits of 3.8 billion USD in the same period a year earlier and 3.19 billion USD the previous quarter. Egypt’s trade deficit recorded its smallest deficit in 12 years in 2Q FY 2022-2023, narrowing to 6.45 billion USD from 10.64 billion USD a year earlier and USD 9.1 bn in 1Q. This was driven by a 20% decline in imports, which fell to 17.99 billion USD from 22.48 billion USD a year earlier, primarily due to the import restrictions imposed last year in response to the FX shortage. (CNBC Arabia)
Fitch Ratings has downgraded Egypt’s sovereign credit rating for the first time since 2013, cutting it one level to B from B+ and maintaining its negative outlook.
The downgrade comes on the back of “high external financing requirements, constrained external financing conditions and the sensitivity of Egypt's broader financing plan to investor sentiment,” the ratings agency said. Fitch Ratings’ decision comes a few months after a similar move by Moody’s which in February cut Egypt’s rating to B3, and two weeks after S&P Global Ratings downgraded its outlook to negative. (Fitch Ratings)
Limited access to debt markets and weak foreign currency inflows, largely due to a lack of investor confidence in our exchange rate regime, are weighing on the country’s ability to meet its needs for external financing.
“We see a risk that a further delayed transition to a flexible exchange rate will further undermine confidence, and, potentially, delay the IMF program,” Fitch wrote, noting that it had detected a “marked deterioration” in the country’s public debt indicators which will “put medium-term debt sustainability at risk” if not reversed. Fitch “assumes that the exchange rate will depreciate further before stabilizing in the financial year ending June 2024.” (Fitch Ratings)
It is worth remembering that the government needs around 10 billion USD annually in FDI starting in the current fiscal year, in addition to an unspecified amount of portfolio inflows, to cover the current account deficit.
Around 7.2 billion USD worth of external government debt will mature in FY 2023-2024, up from 4.3 billion USD this year, exerting further pressure on our external financing needs, according to Fitch. (Fitch Ratings)
Egypt raises diesel price; fuel prices remain unchanged.
Egypt’s Fuel Pricing Committee has decided to raise diesel fuel prices by 1 EGP to 8.25 EGP per litre. On the other hand, fuel prices remained unchanged at 8.75 EGP per liter for the 80-octane gasoline and 10.25 EGP per liter for the 92-octane gasoline. The price of the 95-octane gasoline has been kept at 11.50 EGP per liter. The decision came into effect as of Thursday, May 4th. (Hapi Journal)
Egypt sets oil price at 90 USD/barrel in FY2023/24 budget.
The Egyptian government has set the oil price at $90 per barrel for the budget of the upcoming fiscal year (FY) 2023/24. In FY2023/23’s budget, Egypt set the oil price at 80 USD per barrel. Egypt annually consumes about 12 million tons of diesel and about 6.7 million tons of gasoline, according to the latest data of the Central Agency for Public Mobilization and Statistics (CAPMAS) for the FY 2019/2020. (Asharq Business)
Samsung Electronics Egypt mulls expansion plans in local market.
Samsung Electronics Egypt is probing expansion plans in the Egyptian market. Samsung’s investments in Egypt have reached over 500 million USD so far, with sales exceeding 1.3 billion USD. The company has become the top exporter of electronics in Egypt and has succeeded in fulfilling the demand of both domestic and international markets. It has also contributed to the localization of the electronics industry in Egypt by manufacturing electronic tablets and mobile phones, creating around 5,000 direct and indirect job opportunities. (Al Mal)
Orascom Development denies investments in Saudi Arabia.
Orascom Development Egypt (ODE) has denied intentions to invest in the Saudi Arabian tourism sector. This came as a response to the recently published news on one of the media platforms claiming that ODE plans to invest in the Saudi kingdom. ODE, the largest subsidiary of Orascom Development Holding (ODH), is a developer of resort towns, residential units, hotels, and recreational facilities such as golf courses, town centers, and marinas, in addition to supporting infrastructures, such as hospitals, schools, and utilities. (Arab Finance)