Egypt occurred a financing agreement with South Korea, last Thursday, at a value of 1 billion USD

Newsletter

23 Jan 2022

For our top talks today, Egypt occurred a financing agreement with South Korea, last Thursday, at a value of 1 billion USD, in addition to signing a grant of 8.9 million USD. The duration of the financial financing agreement is 5 years, from 2022 to 2026. The signing of the agreements coincides with an official two-day visit by South Korean President Moon Jae-in, which is the first visit of a South Korean president to Egypt for 16 years. The value of trade exchange between Egypt and South Korea increased, recording 1.9 billion USD during the first 10 months of 2021, compared to 1.6 billion USD during the same period in 2020, an increase of 23.6%, according to the Central Agency for Public Mobilization and Statistics. (Bloomberg Asharq)

Egypt and the United Nations Industrial Development Organization (UNIDO) signed an agreement to develop eco-friendly industrial zones, the Egyptian Ministry of Trade and Industry said in a statement.
According to the statement, the agreement will support the Egyptian government to improve the economic, social and environmental performance of industrial zones, as well as Egypt's industrial policies and legislation. The sustainable industrial zones contribute to attracting more local and foreign industrial investments, providing jobs, while preserving the environment and facilitating the transition toward a green industry and economy by reducing greenhouse gas emissions. (Arab Finance)
The Egyptian Ministry of Finance has received the approval of the Cabinet to begin the procedures for issuing sovereign sukuk in the international markets,
according to an official statement by the Egyptian Cabinet. The Cabinet also endorsed the presidential resolution regarding the addition of 28.32 million USD to the Assistance Grant Agreement between Egypt and the US, to bring the total amount of the grant to 155.88 million USD. This decision aims at supporting micro-, small-, and medium-sized enterprises (MSMEs) and entrepreneurship, as well as technical vocational education, training and workforce development. (Arab Finance)
Going to our investments talks, first, Hitachi Energy will connect the 250-megawatt Gulf of Suez 1 wind farm in Egypt, owned by the New and Renewable Energy Authority (NREA), to the national power grid.
Hitachi will provide a grid integration solution to Vestas, a supplier of wind turbines1, to collect all the power produced by the 70 Vestas wind turbines and feed it into the high-voltage power grid for transmission across Egypt, according to a recent press release. To generate around 1,000 gigawatt-hours of clean energy, Gulf of Suez 1 is in line with the Egyptian government’s plan to produce 20% of its installed capacity from renewable sources by 2022 and 42% by 2035. The wind farm will produce enough renewable energy to power around 300,000 Egyptian homes.
Second, The Egyptian Minister of Petroleum Tarek El-Molla has signed two new agreements with Canada’s TransGlobe Energy and Varo Energy for oil production and exploration in Egypt’s Eastern and Western Deserts.
The agreements have been signed with total new investments amounting to a minimum of 506 million USD, along with awards worth 67 million USD for drilling 12 wells. The first agreement signed with TransGlobe Energy includes the consolidation of the northwest of Ghareb, west Ghareb, and west of Bakr in the Eastern Desert and pumping new investments into exploration and production of crude oil. Meanwhile, the second agreement signed with Varo Energy targets investing in the exploration, development, and production of crude oil at the Western Desert in Fayoum. (CNBC Arabia)
Turing to our EGX and companies talks, the largest electronic payments company in Egypt, Fawry, is seeking to offer part of its shares in the US in the form of American certificates of deposit,
in addition to increasing its paid-in capital at nominal value, and directing its proceeds to finance its future expansions. According to the listing rules on the Egyptian Stock Exchange issued in 2014; Listed companies are allowed to offer no more than 33.3% of their capital in foreign stock exchanges, provided that the free-trading ratios of the company's shares in the Egyptian and foreign stock exchanges are equal. (Al-Mal)
Also, Fawry for Banking Technology and Electronic Payment (FWRY) is planning to raise 800 million EGP of growth capital via a rights issue to existing shareholders.
Proceeds from the rights issue will be used to finance the company’s new expansion plans in the financial services sector for both consumers and merchants, in addition to, boosting the offerings on MyFawry. The increase in offerings will contribute to positioning the company at the forefront of the Super App opportunity in Egypt. Fawry will carry on investing in bolstering its position on merchant acquiring and supply chain solutions. (EGX)
Alexandria Mineral Oils Company (AMOC) reported a 1,057% year-on-year (YoY) surge in consolidated net profit after tax for the first half (H1) of fiscal year (FY) 2021/2022.
Consolidated net profit after tax grew to 407.503 million EGP in H1 FY 2021/2022 from 42.56 million EGP in the FY-ago period. Consolidated revenue amounted to 7.10 billion EGP in the six-month ended December 31st 2021, up by 67% from 4.25 billion EGP in the same period of FY 2020/2021. Meanwhile, the company’s standalone net profit after tax reached 345.80 million EGP in H1 FY 2021/2022, versus a net loss of 84.44 million EGP in H1 FY 2020/2021.
Egytech Cables, a 99.98%-owned subsidiary by Elsewedy Electric (SWDY), has signed two new contracts worth 13.2 million KWD (686 million EGP) with the Public Authority for Housing Welfare in Kuwait.
Under the signed contract, Egytech Cables will carry out the design, supply, installation, and maintenance of all works related to the 132 kV ground cables for supplying the main substations 132/11 kV of N6 and N10 regions for El Mutlaa Residential city. The project is set for implementation in an 18-month period on a turnkey basis. It is worth noting that the contracts were signed on January 19th. (Arab Finance)
And finally, our top talks abroad, US treasury bonds are moving at a higher speed as investors grow expectations that the Fed will raise interest rates in March and will follow with further increases throughout the year.
The 10-year US Treasury yield has risen by about 30 basis points since the end of 2021 as market participants began raising prices earlier and at a faster pace, with speculation of a 50 basis point increase in March. The outlook for the Federal Reserve, interest rates, and economic growth suggest equity investors must balance their exposure to growth stocks with value,” Goldman Sachs Group strategists led by David Kostin said in a note on Friday. Bonds are on the rise, a dynamic that will support value stocks more than growth.” The company's economists expect US economic growth to rise to 3% in the second quarter from 2% in the first quarter, supporting value stocks. But by the fourth quarter, growth will slow again, boosting growth stocks instead, according to their forecasts. (Bloomberg)
US President Joe Biden vowed to continue his attempts to bring down oil prices, which reached their highest level in seven years despite his faltering efforts to persuade producing countries to increase production.
Brent crude price increased by 25% since the end of November to about 88 USD a barrel, while market observers believe that it is now a question of “when?” the price of oil will reach three figures? In a jump it has not reached since 2014. Here, it is worthy to mention that high gasoline prices were the main driver of inflation during Biden's term, and the White House sought to contain the high costs for motorists, especially as the high prices hurt Biden's popularity and made it difficult for Democrats to maintain control of the House and Senate in the November elections. (Reuters)