Egypt net foreign reserves leveled up by 29 million USD in October, 2021

Newsletter

07 Nov 2021

For our top talks today, first, Egypt net foreign reserves leveled up by 29 million USD in October, 2021. Net foreign reserves reached 40.84 billion USD in October, compared to 40.82 USD billion in September. Earlier, Saudi Arabia has deposited 3 billion USD at the CBE to support Egypt’s liquidity of foreign exchange. The Saudi funds will put Egypt a lot closer reaching the pre-pandemic peak of 45.5 billion USD. Egyptian expats’ remittances jumped to an unprecedented rate of 13.2% in the fiscal year (FY) 2020/2021 to post 31.4 billion USD, up from 27.8 billion USD in FY 2019/2020. Furthermore, Egyptian expats’ remittances edged up by 29.6% from April to June 2021 to reach $8.1 billion, up from $6.2 billion in the same period of 2020. (CBE)

Second, President Abdel Fattah el-Sisi "directed the government to start the actual transfer to the government district in the New Administrative Capital (NAC) starting in December.
The Egyptian government will start the process of moving offices for a trial period of 6 months. The new capital is designed as a high-tech "smart city" to accommodate 6.5 million residents and ease congestion in Cairo. The city will include a government district, a business district, vast parks and a diplomatic district. (Arab Finance)
Equally important, Egypt's non-oil private sector contracted in October to its lowest level since May amid an international supply chain crisis.
The seasonally adjusted IHS Markit Egypt Purchasing Managers’ Index edged down to 48.7 in October, compared to 48.9 in September. A reading above 50 indicates expansion, while a reading below that signals contraction. Worsening supply chain disruption appeared to weigh more heavily on firms' projections for future output in October. After climbing to a record high in September, the respective index saw its largest ever monthly decline of over 20 points, bringing expectations down to the lowest since April. Firms were particularly concerned that high inflation could lead to a slump in demand and reverse the economic recovery seen since COVID-19 restrictions were eased. (Arab Finance)
It is worthy to mention that Egypt’s private sector plans to issue 120-200 million USD in corporate green bonds, Planning Minister Hala El Said revealed during COP26 climate summit in Glasgow. The issuance would mark Egypt’s second corporate green bond issuance.
In July, the Commercial International Bank (CIB) was the first in Egypt to issue corporate bonds, completing $100M sale of the securities. The sale was initially capped at 65 million USD, but the bank raised the size on the back of strong demand from the International Finance Corporation (IFC), which snapped up the entire issuance. El Said noted that the big green finance meets high-level climate diplomacy. (Arab Finance)
Also, the European Bank for Reconstruction and Development (EBRD) has provided financing to Egypt since the beginning of this year so far, amounting to about 550 million EUR, noting that the total financing is intended to reach 1 billion EUR by the end of the year.
The bank is currently discussing two projects with the Egyptian government to finance them. They are: a project to modernize and electrify the Abu Qir-Alexandria railway line and transform it into a high-capacity metro line (the amount of financing is 250 million EUR), in addition to providing a loan of 250 million EUR for the Alexandria Petroleum Company. (Al-Mal)
Moreover, October Pharma (OCPH) achieved a net profit after tax of 100.32 million EGP in the first nine months of 2021, compared to a profit of 60.66 million EGP in the year-ago period.
Earnings per share (EPS) stood at 13.38 EGP in the nine-month period ended September 20th, 2021, compared to EPS of 8.09 EGP in the same period of 2020. Net sales reached 489.07 million EGP in the January-September period of 2021, rising from 379.20 million EGP in the same period of 2020. (EGX)
Turning to our top talk abroad, oil prices extended losses on Thursday in global oil markets, with US crude futures falling below 80 USD a barrel, after Iran and world powers agreed to resume nuclear talks this month,
which could lead to the lifting of US sanctions imposed on Iranian oil and an increase in global supplies. The agreement, officially called the Joint Comprehensive Plan of Action, calls on Iran to take steps to limit its nuclear program in exchange for relief from economic sanctions imposed by the United States, the European Union and the United Nations. (Reuters)
And for our EGX & companies talks, Egypt's health tech startup Bypa-ss has closed a 1 million USD Pre-Seed funding round from Egyptian and foreign investors,
with participation from Magic Fund, Acuity Ventures, Launch Africa, Plug and Play, and other regional and international venture capital funds (VCs). The funding will be used to expand the customer base and healthcare network of its HealthTag platform for storing and sharing medical records. Bypa-ss was founded in 2019 in Shebin El Kom, Menofia, and is now offering services to its members across Egypt. The startup has been accelerated and backed by Falak Startups' investment. (Mubasher)
Likewise, Egypt's grocery delivery platform Breadfast has obtained 26 million USD in a Series A round, co-led by Vostok New Ventures and Endure Capital.
This investment round raises Breadfast’s total investment to date to over 33 million USD since it launched in 2017. The new capital will help Breadfast expand into eight new cities across Egypt, scale the technology behind its ‘pocket supermarket’ app, and grow its team as it expands across Sub-Saharan Africa. The company also plans to reduce the on-demand delivery time to 20 minutes from the current one hour by expanding its network of dark stores. The funding is one of the largest in the MENA region so far in 2021, following MaxAB’s 40 million USD round, Capiter’s 33 million USD series A round, and MNT-Halan’s 120 million USD round. (EGX)
Furthermore, one of the shareholders of Tenth of Ramadan for Pharmaceuticals Industries and Diagnostic Reagents (Rameda) (RMDA) is considering selling not over 5% of the company’s shares to an investment entity.
This will be discussed during the ordinary general meeting (OGM) set to be held on November 25th, 2021. The identities of the shareholder and the investment entity have not been revealed yet. Rameda is an Egypt-based pharmaceutical company that manufactures both human and veterinary pharmaceuticals. (EGX)
Moreover, October Pharma (OCPH) is considering new expansion plans to face inflation wave amid nearing the completion of 2021 plan.
The final value of these investments has not been determined yet. It is worth noting that Abdel Aziz previously revealed that the company signed contracts with a UK-based company, a German company, and an Italian company to supply the new production lines that are expected to be installed in the first half (H1) of 2022. The company will continue expansion in the exportation markets and is ready to enter the Filipino market, he noted, adding that it will also focus on the African markets, along with Russia and Thailand. (Al-Mal)
By the same token, seven local companies seized the largest practice of supplying medium voltage electrical cables worth 2.5 billion EGP and total lengths of up to 2,266 km.
The seven winning companies include El Sewedy EGETEC, Energia Cables, Misr Cables, Giza Cables Industry, and International Cables. And "Giza Power" and "Chinese Cables", pointing out that each of them obtained a supply order at a certain percentage that it has not been disclosed yet. The total value of the cables’ supply contracts is expected to reach 2.5 billion EGP, to be paid through the strategic projects of each electricity company affiliated with the holding, for which the practice was carried out. (Al-Mal)
Simplex Company for Industrial Solutions and Software, working in the field of manufacturing digital control machines in the industrial sector, is negotiating with some local banks to obtain credit facilities amounting to 40 million EGP;
With the aim of establishing a new factory for the production of CNC machines equipped with the fourth industrial generation technology. Digital control machines are used to facilitate manufacturing processes in various fields of industry by cutting, drilling, bending and puncturing metallic and non-metallic materials such as wood and marble, and the establishment of the factory aims to provide more than 500 new job opportunities for young people. (Al-Mal)
And finally, Banque du Caire (BDC) (BQDC) is targeting raising the value of its retail banking portfolio by 2 billion EGP within the coming two months.
This will bring the value of the retail banking portfolio to 42 billion EGP by the end of 2021, compared to 40 billion EGP at the end of September 2021. Moreover, the bank’s mortgage finance portfolio rose by 200 million EGP during the past nine months, reaching 2.7 billion EGP at the end of September 2021, compared to 2.5 billion EGP at the end of December 2020. (Al-Mal)