Egypt’s economic growth recorded 8.3% in the second quarter of fiscal year 2021/2022

Newsletter

24 Feb 2022

For our top talks today, Egypt’s economic growth recorded 8.3% in the second quarter (Q2) of fiscal year (FY) 2021/2022, compared to a growth rate of 2% in Q2 FY 2020/2021, according to the Minister of Planning and Economic Development Hala El Said. The growth domestic product (GDP) is projected to increase by EGP 582 billion to hit EGP 6.9 trillion by the end of FY 2021/2022. In the first half (H1) of FY 2021/2022, the country’s economy grew by 9%. The GDP is forecast to grow 9.2% at the end of FY 2021/2022. It is worth noting that Prime Minister Mostafa Madbouli previously announced that Egypt’s economic growth recorded 8.3% in Q2 of FY 2021/2022. (Arab Finance)

The US’ imports from 183 Egyptian companies under the Qualified Industrial Zone (QIZ) recorded to 1.2 billion USD in 2021, head of Egyptian Trade and Industry Ministry's QIZ unit Ashraf El Rabie said in a statement.
Egypt should benefit from the current conditions to raise exports to the American market, especially with the US’ imports of ready-made clothing amounting to 121 billion USD last year, El Rabie added. For his part, CEO of the Micro, Small, and Medium Enterprises Development Agency (MSMEDA) Tarek Shash stressed that the MSMEDA is keen on boosting the volume of Egyptian exports to reach 100 billion USD per year. (Arab Finance)
Egypt’s exports of aluminum grew by 36% year-on-year (YoY) in 2021, citing a recent report by the Export Council for Building Materials, Refractory, and Metallurgy Industries (ECBM).
Total aluminum exports recorded 784 million USD last year, as compared to 575 million USD in 2020. Italy was the top importer of aluminum from Egypt in 2021, with imports valued at 349.7 million USD, up by 22% from 285.5 million USD. Spain came in the second spot, with imports worth 61.9 million USD of Egyptian aluminum, followed by Morocco which imported around 42.5 million USD of Egyptian aluminum. (Al Borsa News)
The Egyptian House of Representatives has issued a final approval on the draft law of the amendments to some provisions of the Real Estate Registry Act No.114 of 1946.
The draft law aims at easing the real estate registration process and eliminating difficulties facing citizens when registering properties. Moreover, it targets eliminating obstacles regarding real estate investments and creating a stale environment for investment. It is worth noting that the House of Representatives also finally approved the draft law on the amendments to provisions of the Capital Markets Act No.95 of 1992. (Al Borsa News)
Moreover, the Egyptian House of Representatives has finally approved the draft law on the amendments to provisions of the Capital Markets Act No.95 of 1992.
The draft law will allow entities operating in the facilities and public services to obtain necessary financings through the issuance of tradable bonds, of which proceeds would be directed to fund entities. This comes in line with the proposed rules by the Financial Regulatory Authority (FRA) that aim at offering the required financing for achieving comprehensive development as well as adding new non-banking financing instruments that comply with the facilities and public services. (Al Borsa News)
Turning to our investments talks, first, Dubai-based Capton Energy, a joint venture (JV) between Siemens and Desert Technologies,
is planning to build a number of solar power plants in Egypt and to acquire stakes in some of the existing plants with up to $25 million in investments as a first phase. The JV is currently in advanced talks with one of the Egyptian plants in the south of Egypt to establish a solar power plant with a capacity of 18 megawatts (MW) at a cost of about 18 million USD, Desert Technologies’ business development manager in Egypt Mohamed Al Dabie said. Moreover, he added that the company seeks to acquire full stakes in existing plants or to develop and finance new projects. (Al Borsa News)
Second, Saudi-based ACWA Power is currently in talks with the Sovereign Fund of Egypt (SFE) to build a wind farm in the Gulf of Suez.
The wind farm is expected to have a production capacity of around 250 megawatts (MWs). The final agreements regarding this project are set to be signed within weeks. The SFE will own the minority share in the project, they said, pointing out that the fund aims at attracting investments in the Egyptian renewable power sector. The sources did not mention the financing sources of the project. In December 2021, ACWA Power signed a loan agreement worth 2 billion USD with French investment bank Natixis to finance the Saudi company’s projects in the region for two years. (Al Borsa News)
Moving to our EGX and companies talks, Contact Developments has acquired three companies operating in the complementary real estate services in a transaction valued at a total of 120 million EGP.
The three companies are namely JW Constructions, DFS General Services, and Turnkey Mechanical Solution. Upon the acquisition, Contact Developments will start applying the backward integration strategy for the first time in Egypt. This move will guarantee the highest quality standards to customers in line with the remarkable growth witnessed in the real estate sector, which will contribute to achieving comprehensive development as per Egypt Vision 2031. The company targets boosting its investments volume inside the New Administrative Capital (NAC) by 400% by 2030, Chairman of Contact Developments Ahmed Fekry said. (Arab Finance)
Amarenco Group and SolarizEgypt have signed a final partnership agreement.
Under the agreement, Amarenco will acquire 74% of SolarizEgypt’s portfolio and co-develop 300-megawatt assets at an estimated budget of 4 billion EGP (255 million USD) in the coming four years. This joint venture (JV) between the two companies is referred to as “SolarizEgypt | Amarenco & Co”, and it will invest in the development of solar energy projects in Egypt to offer clients clean sources of electricity at a discounted rate. The newly signed agreement will bolster both companies’ expertise to “provide the best-in-class services to the Egyptian energy sector.” It is worth noting that Amarenco had globally invested over 500 million EUR in solar development globally. (Arab Finance)
Etisalat Misr has been awarded the digitalization of 1,131 branches of the Agricultural Bank of Egypt (ABE).
This comes in line with ABE’s strategic plans to expand in the digital banking services sector. As per this cooperation, Etisalat will be ABE’s strategic partner in the digital transformation process. This collaboration will enable the bank to complete its main role in supporting the Central Bank of Egypt’s (CBE) initiative to achieve financial inclusion. Through this partnership, ABE aims at providing its customers with competitive services and easing the procedures inside branches. (EGX)
Oriental Weavers Carpets’ (ORWE) board of directors approved the opening of four outlets.
The new outlets will be located in New Mansoura, Sheikh Zayed City, El Beheira, and Al Qalyubia. Moreover, the board also decided to close El Arish’s outlet. It is worth noting that Oriental Weavers’ consolidated profits excluding minority shareholders’ rights rose to 1.085 billion EGP in 2021, from 937.439 million EGP in 2020. (Arab Finance)
Nasr Company for Civil Works’ (NCCW) turns to profitability in the full year ended December 31st 2021.
The company reported a net profit after taxes of 958,000 EGP in 2021, versus a net loss of 27.018 million EGP in 2020. In 2021, Nasr for Civil Works’ revenue went down 24.52% to 135.824 million EGP, from 179.943 million EGP the year before. Nasr for Civil Works is an Egypt-based public shareholding company engaged in the construction sector. The company provides construction and development contracting services for infrastructural projects related to energy, utilities, housing, roads, and ports. (EGX)
And finally, Edita Food Industries (EFID) announced the rebranding of its baked snacks line, Molto Sandwich, as Molto Fino.
The new brand, Molto Fino, is offered in eight flavors. In addition to the existing flavors of Molto Sandwich, which includes olive, istanbolli cheese, hot pepper, feta cheese, and chocolate, Molto Fino comes with three new flavors, including Mexican cheese, roumi cheese, and pastrami. Molto Fino is priced at 5 EGP per pack that each containing one sandwich. Moreover, the new brand will help Edita to boost its growth, capitalizing on the company’s 60% share of the baked goods market. (Arab Finance)