Egypt hosts today the 21st Common Market For Eastern and Southern Africa Heads of State and Government Summit in the New Administrative Capital

Newsletter

23 Nov 2021

For our top talks today, first, Egypt hosts today the 21st Common Market For Eastern and Southern Africa (COMESA) Heads of State and Government Summit in the New Administrative Capital (NAC). The current summit is held under the theme “Building Resilience Through Strategic Digital Economic Integration”. President Abdel-Fattah El-Sisi will take over the chair of COMESA from the president of Madagascar and will launch the COMESA Medium-Term Strategic Plan 2021- 2025. It is worth noting that Egypt was one of the key economic forces in COMESA, having the largest share of intra-COMESA trade in 2020, with a total of 2.7 billion USD. COMESA is also a promising market for Egyptian exports, which accounted for 20% of exports within the bloc, worth 2 billion USD, while imports from COMESA amounted to 700 million USD. (Egypt Ministry of Trade and Industry)

Second, the Egyptian government decided not to raise electricity tariffs until the beginning of next fiscal year (FY) 2022/2023.
The decision goes under the government’s plan to restructure the subsidy scheme. The government pushed plans to completely remove electricity subsidies from July 2022 to July 2025. It is worth noting that the Ministry of Electricity increased electricity prices in July 2021 on residential units by 8%–26% depending on the consumption bracket. (Al Borsa News)
Moreover, the Central Bank of Egypt (CBE) announced a decline in “MO” reserve money by 28.808 billion EGP during last October.
The monthly statistical report showed that “MO” reserve money recorded 1.0050 trillion EGP during last October, compared to 1.0338 trillion pounds in September. The “MO” reserve money consists of cash circulating outside the treasuries of the CBE, and bank deposits in its local currency. It is noteworthy that the volume of domestic liquidity in the banking sector rose to 5.575 trillion EGP at the end of September 2021, compared to 5.489 trillion EGP at the end of last August, an increase of 86.2 billion EGP. (CBE)
Egypt’s budget deficit levelled up to 219.8 billion EGP during the first four months of the fiscal year (FY) of 2021/2022, compared to 171.3 billion EGP during the same period of FY 2020/2021.
The budget deficit rose to 3.1% as a percentage of the gross domestic product (GDP), compared to 2.6% of GDP during the same period of 2020/2021. Egypt's total revenues rose during the first four months of the current fiscal year to 311 billion EGP, compared to 287 billion EGP during the same period of the previous fiscal year, as tax revenues contribute about 78.8% of total revenues, and non-tax revenues by about 21.2%. Egypt's total expenditures during the July-October period also increased to 530.7 billion EGP, compared to 455 billion EGP during the same period of the previous fiscal year. (Egypt Ministry of Finance)
In the same context, Egyptian Financial and Industrial (EFIC) announced that it produces single super phosphate, which is not subsidized by the government.
The company is also subject to law No. 159 of 1981, under which the sale price of fertilizers is linked with the increase in raw materials included in production such as phosphorite and sulfur. This disclosure comes after the government’s decision of raising the prices of subsidized fertilizers to 4,500 EGP per ton. It is worth noting that the Ministry of Agriculture announced that the prices of nitrogenous fertilizers increased by 50% or 1,500 EGP per ton. (EGX)
Equally important, ENOC Group has signed a three-year agreement with Royal Marine Services in Egypt to distribute a wide range of ENOC’s marine lubricants.
The agreement will enable Royal marine services to distribute ENOC’s marine lubricants in Egypt boosting the Group’s lubricants presence in a thriving market. It is worth noting that the marine lubricants’ industry in Egypt is growing at a steady pace with annual transactions, covering local and international lubricants, at over 24 million liters, making Egypt a lucrative maritime market. (Arab Finance)
Moving to our EGX & companies talks, first, the board of directors of Egyptian Transport and Commercial Services Co (ETRS) (Egytrans) has agreed on splitting the nominal value of the company’s stock.
Accordingly, the nominal value of the stock will be 1 EGP, instead of 5 EGP. Moreover, the board has approved to cut the company’s authorized capital as per the Financial Regulatory Authority’s (FRA) resolution No. 138 of 2020. Egytrans is an Egypt-based company engaged in international sea, air, and land transportation services. (EGX)
By the same token, Industrial Engineering Company for Construction and Development (ICON) (ENGC) has received an offer from Kingspan Insulated Panels, a subsidiary of the Global Kingspan Group, seeking a strategic collaboration in manufacturing sandwich panels.
The collaboration would be carried out through a potential non-binding acquisition of not less than 65% of ICON’s sandwich panels sector after spinning off the industry in a separate specialized company affiliated with ICON. ICON is an Egypt-based company engaged in manufacturing and producing several types of steel-sheets-related products. (EGX)
And for our real estate sector talks, Palm Hills Development Company (PHDC) is planning to boost its investments in the first phase of Badya project, located in the 6th of October city, to reach 1 billion EGP by the end of 2021.
The real estate developer has pumped up to 600 million EGP in Badya project so far. Moreover, the company is seeking to deliver 1,000 units in Badya during 2022. The first phase of the project includes nearly 3,300 units at an investment cost of 6 billion EGP. (Al Borsa Newspaper)
Tameer, the leading real estate development company, announced the launch of its new project Azad Views in the 5th Settlement area in New Cairo.
Spread over 40 feddans, the project is located across the street from the American University. Azad Views is built as the latest extension to Azad 1. The project will feature 830 housing units, including apartments and penthouses designed on the G+4 system, with private underground garages. The project is expected to be completed in 2025. (Arab Finance)
Additionally, Zahraa Maadi Investment and Development (ZMID) has signed a contract with Leopard Construction to develop an integrated residential complex in New Heliopolis.
The new complex will be established over a 34-acre land plot. Sales from the new project are estimated at 3.29 billion EGP. The two companies will participate in the development and construction of the new complex with a percentage of 50% each. (EGX)
On the other hand, Cleopatra Hospitals Group (CHG) (CLHO) has signed a new deal to set up a 400-bed hospital building.
The company is getting ready to obtain the necessary regulatory approvals to conclude a new deal. This deal marks CHG’s first strategic expansion in East Cairo, adding that it is an opportunity to attract further growth. The works of the new hospital are expected to commence operation within two years after getting the required approvals, stressing that the group is capable of maintaining the project as per the targeted schedule. (Al Borsa Newspaper)
In addition, Emirates International Investments Egypt has sold its 1.5% stake in Abu Dhabi Islamic Bank Egypt (ADIB) for an average price of 13.5 EGP per share.
Emirates International Investments LLC has raised its stake in ADIB Egypt to 13.44% from 11.94% after buying 3.001 million shares. The shares purchase transaction has been carried out at a total value of 40.51 million EGP, equivalent to 13.5 EGP per share. (EGX)
Moreover, GB Auto (AUTO) has raised the prices of three models by EGP 7,100 to EGP 20,000 under the obsolete vehicles’ replacement initiative.
These models are namely Hyundai Elantra HD, Hyundai Accent RB, and Chery Tiggo 3. This came after GB Auto has submitted a request to the Ministry of Finance seeking to raise the prices of its cars due to higher prices of production components and higher shipping costs over the past period, he said. The request has been reviewed and accordingly the prices have been raised and updated on the initiative’s website. (Al Borsa Newspaper)
And finally, for our EGX news, the Financial Regulatory Authority (FRA) issued two resolutions No. (171 and 172) of 2021 regarding the rules and regulations for companies looking to establish special-purpose acquisition companies (SPACs).
SPACs are companies created with the sole purpose of raising capital through an IPO to acquire or merge with another company. The rules include the timeline for companies to pull the trigger on SPAC mergers and list on the Egyptian Exchange (EGX), as well as requirements on shareholder structure and minimum capital. The regulator has also issued amendments to listing and delisting rules on the bourse to make way for SPACs to hit the EGX. (FRA)