Egypt aims to increase the size of its stock exchange to 1.6 trillion pounds by 2026
Egypt aims to increase the size of its stock exchange to 1.6 trillion pounds by 2026. The Egyptian government plans to offer some government assets to the private sector to acquire percentages of them. The government estimates the value of these assets at about 40 billion USD, to be offered over 4 years, at an average of 10 billion per year. The volume of non-bank financial financing at about 370 billion pounds during the past year. In the event of offering the New Administrative Capital Company, the expected market capitalization on the Egyptian Stock Exchange may reach 2.6 trillion pounds within 4 years, according to the head of the Financial Supervision. The government authority has monitored several targets in key financial sectors over the next few years, on top of which is an increase in insurance premiums from 47.5 billion EGP last year to 100 billion EGP in 2026, and an increase in financial leasing by 80% to 150 billion EGP. The Financial Supervisory Authority is working on a draft law to regulate the sale of real estate in installments by real estate developers in Egypt, according to Mohamed Omran, head of Egypt’s Financial Supervision, who announced the imminent issuance of the first future financial rights of 2 billion EGP. (Bloomberg Asharq)
- Egypt is in the middle of negotiations to export LNG to Poland. Egypt is “a partner of the future” for Poland as the European country looks to diversify its LNG imports, Polish President Andrzej Duda said following a meeting with President Abdel Fattah El Sisi in Cairo yesterday.
The two presidents discussed shipping liquefied natural gas from Egypt to Świnoujście, where Poland plans to expand an existing terminal, the Polish president said on Twitter. Also, Sisi and Duda discussed finding a way to export grain from the war-torn country of Ukraine to Egypt amidst the Russian blockade. Duda had said earlier this month that Poland could help facilitate shipments of Ukrainian wheat to Egypt through Polish seaports. (Enterprise)
- The Egyptian government is looking forward to raising the contribution of the private sector to the country’s gross domestic product (GDP) to 50% within three years from now, Minister of Finance Mohamed Maait stated.
The government also working on achieving its targets for the new fiscal year (FY) 2022/2023 amid the unstable global economic situation. Under the FY 2022/2023 budget, Egypt is seeking to achieve total revenues of 1.5 trillion EGP, with total estimated expenses of 2.74 billion EGP. The country is also planning to cut its deficit to 6.1% of gross domestic product (GDP) and is targeting a primary surplus of 1.5% in the new fiscal year. (Arab Finance)
- Israel plans a new tender to explore for gas in the Mediterranean. “The State of Israel is mobilizing to help Europe in diversifying its energy sources," Energy Minister Karen El-Harr said in a press conference.
The global energy crisis is an opportunity for the State of Israel to export natural gas, along with a sincere and genuine interest in what is happening in Europe." Israeli gas currently serves the domestic market, as well as Egypt and Jordan. But the new tender, which is expected to start in the third quarter, comes as the European Union works on a deal to import Israeli gas through Egypt. The fuel will be converted to LNG at processing plants in Egypt before being shipped to the European Union. (Bloomberg Asharq)
- Moreover, the European Union (EU) is looking forward to importing Israeli gas through Egypt amid efforts to cut dependency on Russian supplies.
A potential memorandum of understanding (MoU) between the EU, Israel, and Egypt would be sealed to open a new market for Israel, where gas prices are notably lower as compared to the rates in Europe. The fuel sought to be shipped to the EU would be converted first to liquefied natural gas (LNG) at the liquefaction plants in Egypt. The MoU would also reinforce cooperation between the three parties in clean energy projects. (Bloomberg)
- Passenger car sales fell for the second month running in April as economic headwinds and import restrictions hit the sector, according to the Automotive Information Council (AMIC) — the industry association to which most distributors report sales — showed that sales collapsed almost 20% y-o-y last month, with distributors selling 12.9k cars compared to 16k in April 2021.
The drop in sales hit every category in the industry: Total sales fell 25% to 16.6k as bus and truck volumes dropped significantly. Bus sales were down 40% on last April, while truck sales fell 38%. Sales had also declined in March: Distributors saw total volumes fall 9% in March, as sales of passenger cars, trucks and buses slipped. The automotive sector is being buffeted by a multitude of headwinds, including a lack of financing for imports, rising inflation, component shortages and the EGP devaluation in March. (Al Mal)
- As many as 13 global car manufacturers are no longer shipping to Egypt until we can clear up this issue, suggesting May figures are likely to come in substantially worse than April’s.
Imports are slowing down in large part because of a decision to force distributors to use letters of credit (L/Cs) rather than documentary collection to finance imports. Traders haven’t been able to obtain L/Cs, prompting their overseas suppliers to diver orders from Egypt to other markets that are functioning normally. On top of that, there is reportedly a backlog of around 29k vehicles that are waiting to be released from Egyptian ports. Top industry players don’t expect the situation to resolve until the middle of 2023. (Al Mal)
- Hisham Tawfiq, Minister of Public Business Sector, revealed that a study is currently underway to establish a large solar farm to produce energy with capacities from 600 to 1200 megawatts.
He added that negotiations are currently underway with the Ministry of Electricity to discuss implementation mechanisms, as the project aims to serve the Egypt Ammonium Company, the largest consumer of electric energy. Tawfik expected the Ghazl El-Mahalla Club to be listed on the stock exchange within a few days, after obtaining the approval of the Financial Supervisory Authority, as the first offering of a football company in the Egyptian capital market. (Al Mal)
- Karim Badr, Executive Director of the Egypt Sub-Fund for Utilities and Infrastructure - Egypt's Sovereign Fund, confirmed that the fund focuses on participating in green hydrogen projects, because of its great importance that helps put Egypt on the map of energy-exporting countries.
The fund aims to produce one and a half million tons of green hydrogen by 2030, with an investment of up to 40 billion USD.
- Egypt’s net international reserves (NIR) reached 40.9 billion USD during the first half (H1) of fiscal year (FY) 2021/2022, covering 5.8 months of merchandise imports at the end of December 2021.
The growth in NIR was driven by the 2.5 billion USD increase in special drawing rights (SDRs) during the period, along with the 0.1 billion USD uptick in gold as well as the 2.2 billion USD drop in foreign currencies. At the end of March 2022, NIR hit 37.1 billion USD, covering 5.2 months of merchandise imports. (CBE)
- Foreign direct investment (FDI) in Egypt recorded a net inflow of 3.3 billion USD in the first half of fiscal year (FY) 2021/2022.
FDI in non-oil sectors climbed by 1.2 billion USD, registering a net inflow of 4.4 billion USD in the first six months of FY 2021/2022, the report showed. On the other hand, FDI in the oil sector recorded a net outflow of 1.1 billion USD in the July-December period of FY 2021/2022, compared to a net inflow of 158.8 million USD in the same period a FY earlier. The portfolio investment in Egypt recorded a net outflow of 2.5 billion USD in the six-month period ended December 31st 2021, versus a net inflow of 10.2 billion USD in the same period of FY 2020/2021. (CBE)
- Moving to our EGX and companies talks, Eastern will acquire a quarter of Egypt’s second tobacco manufacturer after the company’s general assembly approved the 100 million EGP purchase of a 24% stake in Philip Morris’ United Tobacco.
United will soon be Egypt’s second cigarette manufacturer: The acquisition is part of the Philip Morris subsidiary’s agreement with Eastern Company to locally manufacture cigarettes. United Tobacco was the only company to bid in last year’s tender after other companies complained that the conditions of the tender would establish a monopoly over the local market. (EGX)
- Utopia for Real Estate and Tourism Investment (UTOP) has recorded a 99.6% year-on-year (YoY) increase in net profits after tax during the first quarter (Q1) of 2022.
The company's net profit after tax stood at 4.08 million EGP in Q1 2022, compared to 2.04 million EGP in the same quarter last year. Revenue inched up to 6.304 million EGP in Q1 2022 from EGP 6.295 million in Q1 2021. Established in 1999 and listed in 2009, Utopia is a public company that operates within the real estate sector focusing on diversified real estate activities. (EGX)
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