Egypt launches debut sukuk issuance

Newsletter

22 Feb 2023

Egypt launches debut sukuk issuance. The country is in the process of offering some 1.5 billion USD in sharia-compliant bonds through the London Stock Exchange. The three-year sukuk are being offered at an initial yield of 11.6% and have attracted more than 3 billion USD worth of orders excluding joint lead manager interest. It’s worth noting that demand has been “very good,” noting that the yield could drop if the sukuk are oversubscribed. A successful issuance would help the government meet a major eurobond repayment due today. The government is due to repay 1.25 billion USD in five-year eurobonds that mature today, according to Reuters. (Al Mal)

Saudi, Emirati investors show interest in investing in Egyptian market
Saudi Arabian and Emirati investors expressed their interest in tapping investment into the Egyptian market as it enjoys various investment opportunities that they explore to seize them. The Egyptian delegation held a series of meetings with 20 high-net-worth investment institutions in Riyadh, Dubai, and Abu Dhabi, in order to review the latest developments of the Egyptian economy. The roadshow coincides with the Egyptian government's announcement of the anticipated offering of 32 state-owned firms. (Hapi Journal)
EBRD downgrades forecasts for Egypt’s GDP growth in 2023
The European Bank for Reconstruction and Development (EBRD) has downgraded its forecast for Egypt’s gross domestic product (GDP) growth in 2023 to 4.6%, down 1% from its previous estimate in September 2022. The international financial institution is expecting Egypt’s GDP growth to hit 5% in 2024, slightly down by 0.1% from September’s projections. EBRD also referred to high debt vulnerabilities in Egypt, predicting the cost of servicing public debt to exceed 40% of government revenues. (Arab Finance)
FRA bans authorization in practicing non-banking financial professions
The Financial Regulatory Authority (FRA) has banned the authorization in practicing non-banking financial businesses that are subject to the supervision of the authority. Licenses for practicing non-banking financial activities shall be issued in person by the authority, and shall not be authorized or mandated by another individual, Farid pointed out. Pursuing a profession in the non-banking financial sector without being licensed by the FRA's requires legal accountability. (Hapi Journal)
Egypt to rule in case over Intesa Sanpaolo's local unit soon
An Egyptian court will soon rule on a case centered on the sale of AlexBank to Italy's Intesa Sanpaolo in 2006. The move will possibly pave the way for the government to sell its remaining 20% stake in AlexBank. In 2006, Egypt, in a major privatization deal, sold 80% of AlexBank for 1.6 billion USD to Sanpaolo IMI, which the following year merged with Banca Intesa to create what is now Italy's largest banking group. (Reuters)
The transaction would make it easier for the state to exit its stakes in three other banks that it has earmarked for privatization
Banque du Caire (BdC), Arab African International Bank (AAIB), and United Bank are on the list of 32 names the state has identified as near-term priorities for privatization. BdC has been in the government’s IPO plans for years while United Bank has been rumored to be subject to a takeover bid by the Saudi wealth fund and Saudi financial institutions. AAIB, a well-respected full-service bank with a leading corporate franchise, was run for years by Central Bank of Egypt Governor Hassan Abdalla before he entered government service. (Al Mal)
Avanz Manara, a private equity vehicle focused on Egyptian SMEs, plans to make three new investments during 1H 2023
The firm is considering investing in three funds targeting SMEs, he said, without disclosing further information about the plans. Avanz Capital launched Manara last March with initial capital of 905 million EGP, and plans to raise this to 2 billion EGP via two capital increases over the course of this year. The company’s founding shareholders are a state financial institutions including the National Bank of Egypt, Banque Misr, Banque du Caire, Misr Insurance Holding Company, Suez Canal Bank, and the United Bank. (Al Mal)
The fund has currently invested EGP 7 mn in local firms: EGP 5 mn it handed to Egypt-focused PE outfit Ezdehar and EGP 2 mn into logistics startup Trella
EgyCop is expected to go live next month. The fund, which is being managed by Avanz, will invest in low-carbon projects that issue carbon credits, and plans to raise an initial 1 billion EGP, adding that they’re still waiting on a license from the Financial Regulatory Authority. The FRA previously said it was working on the license as well as on amendments to the Capital Markets Act that would validate the use of carbon certificates as a tradable security. (Al Mal)
Egypt finalizes 1st phase of Egyptian Museum’s renovation in Tahrir
Egypt has celebrated the inauguration of the first phase of the Egyptian Museum’s renovation plan in Tahrir Square. The first phase involved major structural updates to the 120-year-old premises and refurbishment to its lighting systems and displays. Egyptologists from several Egyptian universities attended alongside counterparts from five European museums with large ancient Egyptian collections; the Louvre, the British Museum, the Egyptian Museum in Berlin, the National Antiquities Museum in Leiden, in the Netherlands, and the Egyptian Museum in Turin. (Arab Finance)
DiDi to launch Tayaran service in Alexandria
The ride-hailing app DiDi will launch its Tayaran service in Alexandria. This move is part of the company’s expansion plan in the Egyptian market. DiDi added that passengers now have the opportunity to choose between Wasalny and Tayaran services in Cairo and Alexandria at competitive prices to facilitate their daily commute across the two cities. Tayaran service offers riders the advantage of saving up to 50% on transportation fees, in addition to avoiding traffic jams. (Al Mal)
Hollywood is starting to open its arms to money from oil-rich Gulf countries, who are looking to invest billions in the entertainment industry.
Film production companies had previously distanced themselves from Saudi Arabia, but resistance to funds from the kingdom is fading as traditional film financing sources such as Europe and the United States dry up. It’s not just Saudi; Qatar and the UAE have long been sources of funding for the media industry, Shaw points out. The Qatari sovereign wealth fund previously invested in the movie studio Miramax, and Mubadala, which is part of the government of the UAE. (Bloomberg)