Egypt’s engineering exports are expected to grow to 20% during 2022

Newsletter

19 Jan 2022

For our top talks today, Egypt’s engineering exports are expected to grow to 20% during 2022 when compared to 2021, Chairperson of the Engineering Export Council of Egypt (EEC) Sherif El-Sayed said. El-Sayed added that exports could achieve significant leaps, ranging between 40-50%, if some factors are taken into consideration, most notably the disbursement of exporters’ subsidy dues in a period ranging from 3 to 6 months. He further noted that cost reduction of production is one of the most important pillars to boost engineering exports and achieve unprecedented targets as well as removing customs on components and production requirements. This, in turn, will increase the competitiveness of the final product’s price in international markets. (Arab Finance)

Egypt has secured 10.3 billion USD from bilateral and multilateral lenders in 2021. Around 8.7 billion USD of the loans were allocated to the public sector, while the remaining 1.6 billion USD went to private-sector initiatives.
By far the biggest chunk of funding to the public sector came in the form of a $2 billion loan under a framework agreement between Egypt, the French government and the French Development Agency (AFD). The second-largest financing agreement was a 1.4 billion USD facility from the International Trade Finance Corporation (ITFC) for basic commodities imports including wheat and other foods, followed by a 962 million USD loan, also from the ITFC, for the import of petroleum products and more basic commodities. (Arab Finance)
Egypt is expected to see a $400 million corporate green bond issuance during the first half (H1) of 2022, according to the Financial Regulatory Authority (FRA) chief Mohamed Omran. The green bond issuance will be used to finance renewable energy projects and could be cross-listed on the EGX and the German or Luxembourg bourses.
This issuance Egypt’s first corporate green bond issuance in 2021, when CIB sold 100 million USD of the climate-linked securities to our friends at the International Finance Corporation (IFC), the proceeds of which were earmarked to finance green buildings. Around 2.5-3.5 million EGP worth of securitized bonds from three companies could be issued in the first quarter. Omran expects securitizations to increase 15-20% Year on Year (YoY) in 2022 amid increased appetite from the real estate sector. (Bloomberg Asharq)
Moving to our top talks abroad, Rain Financial, operator of the Rain cryptocurrency exchange that is licensed by the Central Bank of Bahrain, raised 110 million USD in series B funding as digital currencies gain more acceptance among mainstream investors globally. The start-up will use the proceeds to secure more licences in the Mena region, Turkey and Pakistan.
The round was led by San Francisco-based cryptocurrency-focused investment company Paradigm and Silicon Valley venture capital company Kleiner Perkins. Cryptocurrencies have become a popular mode of investment over the past two years, partly spurred by increased digital adoption during the pandemic. (Reuters)
A Treasury sell-off reignited on Tuesday as investors cranked up their bets on monetary tightening from the Federal Reserve, with markets for the first-time pricing in four interest rate increases from the US central bank this year.
Treasury yields jumped to a two-year high as traders returned from the long weekend in the US, dragging down equity markets and worsening a downturn for technology shares. The yield on the 10-year US Treasury note, which rises as the price of the global government debt benchmark falls, climbed 0.05 percentage points to 1.82% as prospects of higher rates on cash deposits and sustained inflation made the security’s fixed-interest payments less appealing. Meanwhile, the yield on the two-year Treasury note, which closely tracks interest rate expectations, rose 0.06 percentage points to 1.02% — a level not seen since February 2020. (Financial Times)
Ocean shipping rates are expected to stay elevated well into 2022, setting up another year of booming profits for global cargo carriers — and leaving smaller companies and their customers from Spain to Sri Lanka paying more for just about everything.
The spot rate for a 40-foot container to the U.S. from Asia topped 20,000 USD last year, including surcharges and premiums, up from less than $2,000 a few years ago, and was recently hovering near 14,000 USD. What’s more, tight container capacity and port congestion mean that longer-term rates set in contracts between carriers and shippers are running an estimated 200% higher than a year ago, signaling elevated prices for the foreseeable future. (Bloomberg)
Turing to our EGX and companies talks, Beltone Consumer Finance (Belcash), the consumer finance arm of Beltone Financial Holding (BTFH), is planning to sign 200 new agreements in 2022, according to the CEO of Belcash Moemen Salem.
These agreements include 10 to be signed in the sectors of education, solar power, and real estate development during the first quarter (Q1) of 2022, Moemen said. The company is also mulling over to double the loan lending limit for its clients in the sectors of real estate development and education, he pointed out. Moreover, the company is considering boosting its financing portfolio by eight times, according to the CEO. Belcash is also targeting to increase the number of retailers it deals with to 350 this year, as compared to 150 retailers in 2021, he pointed out. (Al-Mal)
ExpandCart, an Egypt-based e-commerce platform, has raised 2.7 million USD in a pre-series B round led by China's Betatron Venture Group.
Sawari Ventures from Egypt and Agility Ventures have also participated in the funding round, according to a press release on Tuesday. Established in 2016, ExpandCart provides e-commerce services to 25,000 merchants across more than 40 countries. These merchants have achieved more than 850 million USD in gross merchandise value (GMV) through the ExpandCart platform across its main markets, including Saudi Arabia, Egypt, Kuwait, and the UAE. (Mubasher)
Mubasher Capital Holding for Financial Investments has acquired, on 17 January, the foundational equity of Misr El-Kheir (MEK) Fund that has a variable interest rate. Meanwhile, Mubasher Asset Management acts as the investment manager to supervise the fund’s stake acquisition.
It is worthy to mention that Mubasher Capital intends to establish new investment funds over the coming period, including traditional investment funds for stocks, treasury bills (T-bills), and bonds, in addition to setting up investment funds in the fields of education and health. (Mubasher)
B Investments has 4 investments in the pipeline, two of which will be in the food and beverages sector with a total value of around 350 million EGP. The company is looking at the sweets and desserts field specifically and that the targeted investment operates 35 retail shops across Egypt, with its own manufacturing processes.
The expected closing is in 2022, and the ticket size is around 200 million EGP. Furthermore, the company is looking into quick service restaurants, with the company that will receive the targeted investment operating 10 to 12 branches in Cairo and aiming to grow outside the capital. The expected closing is also in 2022, and the ticket size is around 150 million EGP. B Investments recently exited TOTAL through a put option that allowed it to exercise 20% of its stake, and it currently has another put option to sell the remaining 80% of its stake that is exercisable starting January 2022. (Daily News)
Careem plans to triple its investment in Egypt to 11 million USD in 2022. The ride-hailing company wants to have deployed 11 million USD in its local operations by the end of the year, up from 3.6 million USD at the end of the 2021.
It’s unclear from Essam’s interview with the state-owned newspaper how much the company plans to spend on these new ventures versus expanding its existing ride-hailing business. The size of the service in the Egyptian market recorded $922 million in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 15.8% from 2021 to 2028. (Ahram Online)
And finally, the Egyptian International Pharmaceutical Industries Company (EIPICO) announced that its board of directors has endorsed the feasibility study on the establishment of an Egyptian joint stock company for the production of pharmaceutical materials.
This move aims at paving the way for taking the necessary legal procedures in setting up the company. The new company will be established in the Suez Canal Economic zone (SCZone) with an issued capital of 1 billion EGP and paid-up capital of 400 million EGP. EIPICO’s share in the new company will be 25%. EIPICO is an Egypt-based public shareholding company that operates in the pharmaceutical industry. It is a manufacturer and exporter of pharmaceuticals and holds license agreements with a group of international. (EGX)