As Zilla Capital expected, the CBE kept the interest rates on hold
For our top talks today, as Zilla Capital’s expectations, the Central Bank of Egypt (CBE) is kept the interest rates on hold, last Thursday despite forecasts for rising inflation at home and higher interest rates abroad. The Monetary Policy Committee maintained the benchmark rate at 8.25%, adding that the Egyptian pound carry trade won’t face immediate pressure from rising US rates, and that inflation is unlikely to rise above the central bank’s target range. Additionally, we believe the inflation will continue to rise in the coming months, with most forecasting the headline urban rate to average between 7-7.5% during the first six months of 2022 as rising oil and food prices filter through to the local economy. Also, it is expected that the central bank could consider raising rates later this year as global rates tick higher. (Zilla Capital)
- The Egyptian government is planning to offer stakes in 10 state-owned companies on the Egyptian Exchange (EGX) in 2022, according to the Minister of Finance Mohamed Maait.
The companies will be operating in different sectors and the offering will vary between initial public offerings (IPO) and secondary offerings, Maait highlighted. The anticipated offerings aim at increasing the participation of the private sector, expanding the ownership base, attracting more segments of investors as well as foreign investments to the EGX, he said. The expected value of the offerings has not been determined yet due to market volatility, the minister added. The government is looking forward to continuing the program in March. (Bloomberg Asharq)
- The Suez Canal Authority (SCA) is planning to establish an investment fund with EGP 2 billion in seed capital, according to the Chairman of SCA Osama Rabie.
This fund aims at contributing to the economic sustainable development of facilities at the SCA in accordance with the highest international standards. The Egyptian Cabinet previously approved a draft law regarding the establishment of a fund, under the name of “The SCA Fund” in the governorate of Ismailia It is worth noting that Rabie previously announced that the SCA generated revenues, excluding navigation services, of 544.7 million USD in January 2022. (Bloomberg Asharq)
- In addition, the Egyptian non-oil economy has seen a downturn in business conditions at a fast pace in January 2022,
due to lower demand and inflationary pressures, according to a press release issued by IHS Market Egypt on the PMI™ survey data on February 3rd. The headline seasonally-adjusted IHS Markit Egypt Purchasing Managers’ Index (PMI) fell to 47.9 in January 2022 from 49.0 in December 2021, the data showed. This marks the lowest reading since April 2021, the release highlighted, adding that it also came below the series average of 48.2, indicating a notable decline in overall business conditions. The non-oil sector faced inflationary pressures at the beginning of the year amid higher prices for raw materials, components, and transport. (Arab Finance)
- In a similar context, Egypt expects to double the volume of securitization bonds in 2022. The volume of securitization bonds in 2021 amounted to about 18 billion EGP,
and we expect to double this number in 2022,” according to Islam Azzam, vice president of the Egyptian Financial Supervisory Authority. It is worthy to mention that the value of bonds trading on the Egyptian Stock Exchange amounted to 543.5 billion EGP during 2021, compared to 378 billion EGP in the previous year, an increase of about 44%. (Bloomberg Asharq)
- Moving to our EGX and companies talks, the private placement of Macro Group Pharmaceutical’s (Macro Capital) (MCRO) shares on the Egyptian Exchange (EGX) has been 1.79x oversubscribed at a price of 4.85 EGP per share.
Macro Capital is offering up to 45.8% of its shares for sale, representing 264.513 million shares, of which 95% or 251.287 million shares are offered in a private placement, while the remaining 5% are offered through a public offering. The company is seeking the total value of both the private and public offerings to reach 1.3 billion EGP. EFG Hermes (HRHO) acts as the sole global coordinator of the offering, with Renaissance Capital taking part in managing the offering process. (Bloomberg Asharq)
- Lighthouse Education is planning to acquire two schools in Cairo in 2022, according to the company’s Managing Director Mohamed El Sherif.
The company will pump its entire first close worth 550 million EGP into financing the acquisition transactions, El sheriff added. Lighthouse is aiming at closing three funding rounds, of which the first 550 million EGP round has been closed, he said, pointing out that it plans to close the second round this year. Moreover, he pointed out that the company is considering purchasing a land plot to build a school on. (Al Mal)
- The Egyptian International Pharmaceutical Industries Company (EIPICO) (PHAR) announced that it has already begun the production of Covapravir, a drug used for the treatment of Covid-19.
The company will produce enough of the drug over the few coming weeks to meet the local demand. The drug has successfully undergone the required tests at EIPICO’s labs as well as the labs affiliated to the Ministry of Health and the Egyptian Drug Authority (EDA). In January, EIPICO announced that it obtained the approval of the EDA to produce Covapravir. (EGX)
- Egypt Aluminum (Egyptalum) (EGAL) has raised its supplying prices to factories and retailers by around EGP 5,500 for February 2022,
according to the company’s head of marketing and spokesperson Ehab El Elwany. The price of local aluminum excluding taxes now ranges between 57,500 EGP and 69,500 EGP per ton, El Elwany highlighted. The increase in supplying prices was driven by higher global prices, which rose by an average of 350 USD per ton, recording 3,000 USD, instead of 2,650 USD in January, he said. It is worth noting that Egypt Aluminum recorded a net profit after tax of 814.156 million EGP in H1 FY 2021/2022, versus a net loss of 341.30 million EGP in H1 FY 2020/2021. (Al Mal)
- Industrial Engineering Company for Construction and Development (ICON) announced that its board of directors has approved the vertical demerger of the company.
Accordingly, the company shall be split into a demerging company (ICON) and two demerged companies; a company for panels manufacturing and a company for projects. This decision is pending the approval of the extraordinary general meeting (EGM). ICON is an Egypt-based company engaged in manufacturing and producing several types of steel-sheets-related products. (EGX)
- Swvl Inc announced an additional private investment in public equity (PIPE) related to its proposed business merger with Queen's Gambit Growth Capital,
the first special purpose acquisition company founded and led entirely by women. This PIPE is expected to leverage Swvl’s balance sheet and strengthen its strategic growth initiatives. It is worth noting that Swvl has made deals for an additional $21.5 million of common stock in a PIPE with more new flagship investors, including European Bank for Reconstruction and Development (EBRD). (EGX)
- Misr Pharmacies is planning to open new 10 branches in 2022, according to the group’s CEO Ahmed Hassan.
This will bring the total number of branches to 80 across the governorates of Egypt, Hassan added. The group adopts an optimistic outlook regarding the Egyptian pharmaceutical sector in 2022 as compared to the past two years, he said. He also noted that the group has invested around EGP 67 million in 2021 to support its expansion plan, including a sum f EGP 50 million for inaugurating 14 new branches, with the remaining amount pumped into marketing plans and the development of the group’s technological system. (Al Mal)
- Egyptian Financial and Industrial (EFIC) reported a 203% year-on-year (YoY) surge in standalone net profit after tax for the year ended December 31st 2021.
Standalone net profit after tax stood at 218.21 million EGP in 2021, compared to a profit of 71.99 million EGP in 2020. Meanwhile, the company’s standalone revenue jumped by 75% YoY to 1.16 billion EGP in 2021 from 666.34 million EGP. (EGX)
- MARAKEZ, one of Egypt’s largest mixed-use developers, has begun handing over of the first residential units in District 5 and the first administrative units of Mindhaus Campus ahead of schedule.
District 5 marks MARAKEZ’s latest development in Egypt and its flagship project in East Cairo. The project consists of District Five Residences, Mindhaus and D5M, residential, administrative and commercial respectively. The company has already delivered a total of 100 residential units in District 5 Residences a despite the global pandemic. With District Five Residences almost 50% completed, neighborhoods B and C are currently being delivered. On the other hand, Mindhaus Campus community maintains growing as more businesses move in, with TAM.Gallery being Mindhaus’s first tenant. (EGX)
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