Egypt, the largest market in the Middle East and North Africa (MENA) region, has the potential to be a FinTech leader in the region and to turn into a strong local FinTech ecosystem

Newsletter

21 Feb 2022

For our top talks today, Egypt, the largest market in the Middle East and North Africa (MENA) region, has the potential to be a FinTech leader in the region and to turn into a strong local FinTech ecosystem, according to the Egypt FinTech Landscape Report for 2021 conducted by the Central Bank of Egypt (CBE). Unbanked populations represent around 50% of the Egyptian market, with mobile internet users accounting for 57.3% of the total population. The most populous Arab country is one of the top four active countries in Africa in terms of the FinTech industry, with nearly 70% of the Egyptian startups having already deployed their solutions in the market. Payments and remittances came as the most dominant FinTech sub-sector in Egypt, with 34 startups, followed by lending and alternative finance, with 15 startups. (Arab Finance)

The Egyptian House of Representatives agreed to amend some provisions of the Capital Market Law 95 of 1992, in principle, in preparation for the final vote during the day,
allowing public or private legal persons to issue securitized bonds in exchange for future cash flows. The new amendments will help the government finance public utility projects such as water, electricity, metro or other projects, by issuing securitization bonds to finance them. The Financial Supervisory Authority is responsible for approving the issuance of these bonds. The value of securitization bond issues in Egypt decreased by 19% during 2021 to 19.5 billion EGP, but the 2020 bonds included issuance of about 10 billion EGP for the benefit of the Governmental Urban Communities Authority in Egypt. (Bloomberg Asharq)
Egypt’s total exports of gold recorded 1.108 billion USD in 2021, according to an official statement by Ministry of Industry and Trade.
The country now produces over 15.8 million tons of gold from the Sukkari Mines, in collaboration with both the public and private sectors. Gold production is expected to witness further growth with the launch of the Golden Triangle project, as well as the offering of 38 land plots spanning 12,000 square meters to the global private sector. Egypt’s first gold refinery is currently being established at a cost of $100 million, she noted, adding that this refinery is expected to become an alternative to the refineries of Switzerland and Canada for the MENA region. This refinery is set to turn Egypt into a global logistic hub for gold. (Arab Finance)
Egypt is planning to install 5,000 communication towers with 5 billion EGP (318 million EGP) in investments, communication minister Amr Talaat.
This project is set to be implemented over the coming three years, in partnership with IHS Towers, Talaat remarked. The minister also added that the telecommunication sector in Egypt has seen a growth rate of 16% in 2021. The telecom sector now contributes 5% to Egypt’s gross domestic product (GDP), up from 3.2% three years ago. The government aims at raising the sector’s contribution to GDP to 8% in the next three years. (Al Arabiya.net)
The Egyptian government is getting ready for the pilot application for advance cargo information (ACI) system at air ports, Minister of Finance Mohamed Maait.
The date of commencing pilot application of the ACI system will be disclosed over the coming period. This move comes after the successful application of the API system at marine ports. The government aims at completing all development projects related to the automation of customs in June, which will contribute to turning Egypt into a global logistic hub. (Arab Finance)
Turning to the investments talks, Banque Misr has signed a cooperation protocol with Newgiza University to offer e-payment and collection services for students.
This partnership will provide students at Newgiza University with Meeza pre-paid cards as well as activate BM-Wallet for them. Under the signed protocol, points of sale (PoS) and automated teller machines (ATM) will be installed across the university’s campus. Moreover, the cooperation will enable students to pay online for tuitions. This signing comes as part of Banque Misr’s strategy to expand in the e-collection field and is in line with the state’s policy to achieve financial inclusion. It is worth noting that the bank has collaborated with over 25 public and private universities as a step towards turning into a cashless society. (Al-Mal)
The UAE-based Alpha Dhabi Holding is considering investment opportunities in Saudi Arabia and Egypt, according to CEO Hamad Al-Ameri.
Both countries represent key markets for Emirati companies that seek growth, Al-Ameri noted, noting that Egypt is a huge market that can take in more deals, while Saudi Arabia has a robust growth. “We’re tapping and looking at other markets as well,” Al-Ameri said. “One of the most important things that we’re benefiting from as a group is each company in the existing ecosystem speaks to the other to see opportunities,” he added. Alpha Dhabi Holding is the UAE’s third-largest public firm. It operates in various sectors, including construction, hospitality, and healthcare. (Bloomberg)
Moving to our EGX and companies talks, Egyptian Transport and Commercial Services Company (ETRS) (Egytrans) reported a 39.9% year-on-year (YoY) increase in its consolidated net profit after tax for the full year 2021.
Consolidated net profits after taxes surged to 18.274 million EGP in 2021, from 13.062 million EGP in 2020. Moreover, standalone net profits after taxes increased by 33.7% to 18.537 million EGP in the year ended December 31st 2021, from EGP 13.868 million the year before. Egytrans is an Egypt-based company engaged in international sea, air, and land transportation services. (EGX)
valU, a subsidiary of Egyptian Financial Group Hermes Holding (EFG Hermes) (HRHO), recorded around 500 million EGP in sales during the first two months of 2022, according to CEO Walid Hassouna.
The company is targeting around EGP 5 billion in sales in 2022. The top official revealed that his company is in negotiations with three airlines, adding that it may sign a contract with one of them in a short period after closing the deal with Nile Air. With a financing portfolio of over 2 billion EGP, valU is intending to issue up to 500 million EGP in securitized bonds in the second quarter (Q2) of 2022. It is worth mentioning that valU has generated more than 4 billion EGP in sales since its establishment in 2017. It is the first-of-its-kind buy-now pay-later (BNPL) fintech platform in the Middle East and North Africa (MENA). (Al-Mal)
Pyramisa Hotels and Resorts’ (PHTV) consolidated profits excluding minority interest grew threefold to 60.827 million EGP in 2021, from 21.060 million EGP in 2020.
The company’s operating revenue soared to 275.499 million EGP in the full year ended December 31st 2021, from 69.357 million EGP the year before. Moreover, Pyramisa’s standalone profits after taxes surged to 41.976 million EGP in 2021, from 17.085 million EGP in 2020. Pyramisa Hotels is engaged in tourism and hotel development and investment. The company, along with its subsidiaries, is primarily involved in the ownership, establishment, sale, rent, and management of hotels, in addition to providing travel, entertainment, therapeutic, and sports facilities. (EGX)
Abu Dhabi Islamic Bank Egypt’s (ADIB) consolidated net profits excluding minority interest rose to 1.453 billion EGP in 2021, from 1.192 billion EGP in 2020.
The bank’s standalone net profits increased to 1.379 billion EGP in the full year ended December 31st 2021, from 1.151 billion EGP the year before. ADIB, formerly National Bank for Development, is an Egypt-based public shareholding company engaged in the provision of retail, corporate, and investment banking services through a network of 69 branches located across Egypt. (EGX)
The investment banking division of EFG Hermes (HRHO) has concluded advisory on the securitization issuance worth 794 million EGP for Misr Italia Properties.
The offering marks Misr Italia’s first issuance under an 2.5 billion EGP securitization program. The securitization is backed by a receivable’s portfolio of about 1 billion EGP, emerged by two subsidiaries of Misr Italia. The issuance consists of three tranches, including tranche A, which is valued at 214.3 million EGP and carries a tenor of 13 months, with a credit rating of AA+ from Middle East Ratings and Investor Services (MERIS) and a fixed coupon rate of 9.60%. Meanwhile, tranche B is valued at EGP 420.8 million and has a tenor of three years, with a credit rating of AA from MERIS and a fixed coupon rate of 9.95%. The final tranche, tranche C, is worth 158.8 million EGP, with a tenor of five years, a credit rating of A from MERIS, and a fixed coupon rate of 10.20%. (Arab Finance)
Egyptian Financial Group Hermes Holding (EFG Hermes) (HRHO) is set to appoint Goldman Sachs Group Inc as an independent advisor on the offer submitted by First Abu Dhabi Bank (FAB).
Once hired, the independent advisor will counsel shareholders of EFG Hermes regarding FAB’s offer to acquire a majority stake in the Egyptian group, sources who asked not to be identified told the news agency. Spokespeople at both EFG Hermes and Goldman Sachs have declined to comment. It is worth noting that investors in Egypt’s largest investment bank include Natixis SA and the US-based Ripplewood. (Bloomberg)