President Abdel Fattah El Sisi revealed that Egypt will produce its first locally assembled electric vehicles in 2023

Newsletter

13 Jan 2022

For our top talks today, President Abdel Fattah El Sisi revealed that Egypt will produce its first locally assembled electric vehicles (EVs) in 2023. The announcement took place on the sidelines of the World Youth Forum that is held in Sharm El Sheikh. The announcement also follows the negotiations with two Chinese companies to partner with El Nasr Automotive to produce electric cars in Egypt, with a view to signing final contracts by March. El Nasr was aiming to have Egypt’s first 100 homegrown EVs ready by July-August 2022, then negotiations with Chinese auto firm Dongfeng to locally assemble its E70 cars collapsed in November 2021. The company has since narrowed seven proposals from new potential EV partners down to the two Chinese firms, with an eye to finalize terms later this month. (Arab Finance)

Additionally, the government will inject around 450 million EGP investments to roll out the infrastructure required to make EVs viable on Egyptian roads, led by industry leader Infinity,
which will set up 6,000 electric vehicle charging points across 3,000 stations nationwide. An official announcement on EV charging tariffs and regulations governing the industry is also expected to be issued soon. In December 2021, General Motors and Al Mansour signed an MoU on the plan, and they are working to present a study to the government sometime within the next few months. (Arab Finance)
Arab Ministers have witnessed the launch of the first digital platform for demands and offers of Arab industrial and mining products “APIP.Online”.
The digital platform aims to enhance intra-Arab trade of industrial and mining products and support supply and demand opportunities for these products. Supported by the Arab Industrial Development, Standardisation, and Mining Organisation (AIDSMO), the platform will also open channels of communication between Arab industrial and mining production structures across various sectors. The platform was introduced during the eighth Consultative Meeting of Arab Ministers for Mineral Resources, held on 11 January in Riyadh. (Mubasher)
The total Islamic sukuk issued in 2021 worldwide hiked by 36.1% Year on Year (YoY) to 252.3 billion USD with central banks, governments, and multilateral institutions dominating sukuk issuances.
Local currency sukuk dominated issuances in 2021, accounting for 80% of all bonds issued. Fitch-rated sukuk reached 132.4 billion USD in 2021, 80.1% of which were investment-grade. On the other hand, the share of sukuk issuers with negative outlooks fell to 8.8% in the fourth quarter (Q4) of 2021, down from 23.4% in the corresponding quarter of 2020. The rating agency also expected the volume of sukuk to maintain its growth in 2022, maintaining its status as a key financing source in the Islamic finance market. (Fitch Ratings)
The World Bank (WB) has revised upwards its prediction for Egypt’s gross domestic product (GDP) growth by 0.5 percentage points to 5.5% for fiscal year (FY) 2021/2022.
In October 2021, the bank expected growth to come in at 5.0%, but in its latest Global Economic Prospects report hiked its forecast, citing rising exports, growth in tech and natural gas sectors, and a rebound in tourism. According to the bank, growth will remain steady at 5.5% next fiscal year. Earlier in January, Minister of Finance Mohamed Maait announced that Egypt targets a 5.7% GDP growth in FY 2022/2023, which runs from July 1st, to record 6% in FY 2024/2025. Maait noted that the target would surpass the country's pre-pandemic growth level of 5.6% in FY 2019/2020. (Arab Finance)
On the other hand, for abroad, the exchange rate of the US dollar fell, in trading on Tuesday, but it remained stuck within the last ranges as investors await the speech of US Federal Reserve Chairman Jerome Powell at a congressional hearing later today.
Investors hope that Powell will provide indications about the timing of monetary policy tightening, when he answers questions from the Senate Banking Committee as he seeks a second four-year term as Fed chair. The US dollar index fell by 0.1%, today, Tuesday, at the level of 95.817, to decline significantly from its highest level in 16 months, which was achieved at the end of November, amid increasing hardening from policy makers in the Federal Reserve. We expect any decline in the dollar to be short-lived as the accelerated tightening process by the Federal Reserve continues to provide positive support to the dollar indirectly. (Reuters)
The price of oil witnessed a rise in global markets today, Tuesday, after two days of losses, thanks to the return of investors’ appetite for risk,
while the market awaits signals from the President of the Federal Reserve (the US Central Bank) regarding raising interest rates, while the rise comes while some oil producers find Difficulty in raising the level of their production of crude. The price of Brent crude oil rose 26 cents, or 0.3%, to $81.13 a barrel, after falling 1% in the previous session. A weak dollar helped support the price of oil on Tuesday, as it makes oil cheaper for holders of other currencies. The price of oil fell in the previous two sessions due to fears caused by the rapid global rise in infections with the mutated Omicron strain of the Corona virus, which could weaken the demand for fuel. (Reuters)
Moving to our investments talks, IDH Developments launched its first project dubbed “Vivid Businesss Tower” in the New Administrative Capital (NAC).
Vivid Businesss Tower is a commercial project located in the NAC’s Downtown area. The project’s total investments are estimated at EGP 600 million. The company intends to direct EGP 100 million to the tower’s construction in 2022, and it is targeting 300 million EGP in sales in the first quarter (Q1) of 2022. Additionally, the company is studying new projects during the coming period, including a residential project in the NAC and a coastal project in Al-Galala City. (Al-Mal)
The African Export-Import Bank (Afreximbank) and the National Bank of Egypt (NBE) signed a memorandum of understanding (MoU) at the Intra-African Trade Fair to promote trade and investment flows into Egypt.
Under the agreement establishes a Joint Project Preparation Facility (JPPF) between the two institutions, a first-of-a-kind for an Egyptian commercial bank. The JPPF will support public and private sector investors to prepare projects in the following prioritized sectors: Energy, transport and logistics; logistical platforms such as special economic zones/industrial parks; manufacturing; agri-processing; hospitality and tourism; and services in the ICT, healthcare, and creative economy. (Arab Finance)
Elsewedy Electric for Trading and Distribution, a 99.8% subsidiary of Elsewedy Electric Company, has signed an 443.4 million EGP contract for a five-month project in the New Administrative Capital.
Under the contract, the company will implement the lighting of South Ben Zayed Road in the New Administrative Capital starting from Al-Fattah Al-Aleem Mosque until the Cathedral. Meanwhile, the company will execute high-mast lighting for road no. 11 with its intersection with the City of Arts and Culture and with the extension of North Ben Zayed Road. (Mubasher)
Turing to our EGX and companies talks, International Company for Medical Industries (ICMI) has submitted its shares listing documents to the EGX.
The issued capital increased to 57.67 million EGP from 24.189 million EGP, with the increase fully paid in cash. On the other hand, the company also plans to nationalize a number of industries to provide medical supplements to the Egyptian market and export them as part of ICMI’s ambitious plan. The company will also produce safety syringes as per the country’s directives in combating hepatitis C. ICMI will also discuss the restructuring of its board of directors in the upcoming ordinary general meeting (OGM). (Arab Finance)
Egyptian Chemical Industries (KIMA) (EGCH) announced the preliminary financial indicators for the second quarter (Q2) of fiscal year (FY) 2021/2022.
The preliminary indicators showed that the company has achieved a net profit of about 350 million EGP in Q2 of FY 2021/2022, along with a revenue of nearly 2 billion EGP. Moreover, the company added that it targets recording a net profit of EGP 600 million by the end of FY 2021/2022. It is worth noting that CEO of KIMA Mohamed Hassanein Radwan said that the company plans to establish a new eco-friendly plant at an investment cost of 250 million USD. The company also signed a contract with Air Supply Group to establish a new medical and industrial gas plant. (EGX)
Moreover, about KIMA, Air Supply Group has signed a contract with Egyptian Chemical Industries (KIMA) (EGCH) to establish a new medical and industrial gas plant.
The group aims at purchasing, building, managing, and operating medical and industrial gas plants within KIMA in the governorate of Aswan, with a total investment estimated at EGP 260 million. The project targets supplying KIMA with industrial gas at a rate ranging between 40% and 50% of production capacity. The new plant is also expected to produce about 5,000 liters of oxygen and nitrogen per hour, equivalent to 170,000 tons a day. Moreover, it aims at supplying hospitals and factories in Upper Egypt with oxygen as well as adding to Egypt’s production and strategic reserve of oxygen, the general manager added. (Al Borsa Newspaper)
Banque du Caire (BDC) (BQDC) has raised its stake in African Export-Import Bank (Afreximbank) to over 3%.
It is worth noting that Afreximbank has signed a memorandum of understanding (MoU) with the National Bank of Egypt (NBE) at the Intra-African Trade Fair to promote trade and investment flows into Egypt. BDC, the 99.9%-owned by Egypt's second-largest state-owned bank Banque Misr, is the sixth-largest bank in Egypt in terms of total assets, acquiring a 3% market share in system-wide loans and deposits. The bank also has the third-biggest customer base, with over 3 million customers. (Al-Mal)
And finally, Dealers of international deposit certificates expected that the certificates registered in the “London” market would witness an upward movement during the current year 2022, supported by the positive scenarios presented to the EGX during the year.
They pointed out that there is a direct relationship between the certificates of deposit registered in the “London” market and its shares in the EGX, explaining that the performance of the first was affected during the past periods by the pressure of the negative effects of the pandemic and also the operations of poor liquidity. GDR's are considered a financial instrument that is tradable in the international financial markets, and therefore the certificates are traded as a substitute for the original securities in foreign markets such as the London, Luxembourg or New York stock exchange. (Al-Mal)