High inflation, EGP devaluation weigh on Egypt’s non-oil private sector in November
High inflation, EGP devaluation weigh on Egypt’s non-oil private sector in November. Egyptian non-oil private sector businesses signaled a downturn in operating conditions in November, with inflationary pressures and devaluation of the Egyptian pound weighing on both business activity and demand. The headline seasonally-adjusted IHS Markit Egypt Purchasing Managers’ Index (PMI) fell to 45.4 in November from 47.7 in October, marking the second-lowest reading since June 2020. New business activities dropped to the lowest degree since May 2020 in November, while export sales fell amid contracting global economic conditions. (Hapi Journal)
- The EGX’s listing committee has signed off on the temporary listing of state-owned Port Said Container & Cargo Handling Company ahead of its planned IPO.
The Holding Company for Maritime Transport subsidiary will list over 32.8 million shares on the bourse, the statement said, without disclosing the exact stake size it will offer. The company will have six months from the day its shares are temporarily listed to complete regulatory procedures for its IPO, under recent changes to listing procedures. Local media has reported that the company is looking to go public via a 25% stake sale in 1Q 2023. (Mubasher)
- We could see the first tranche of our IMF loan before the new year, says Maait.
Egypt could receive the first tranche of its new IMF loan before the end of the year, Finance Minister Mohamed Maait has said. Speaking at a conference yesterday, the minister said that Egypt could receive 750 million USD this month, equating to 25% of the 3 billion USD loan program announced at the end of October. The loan program isn’t yet a done deal. The staff-level agreement we reached in October still needs the sign-off of the lender’s executive board. As of this morning, Egypt’s program isn’t yet scheduled on the board’s public agenda, which runs through 14 December. (Bloomberg Asharq)
- It is worth noting that the 3 billion USD, 46-month extended fund facility (EFF) will provide much-needed foreign currency to Egypt’s financial system
which has come under significant liquidity stress on the back of tightening global financial conditions and the spillover effects of the war in Ukraine. It could be topped up with around 5 billion USD from unnamed “multilateral and regional partners,” the IMF has said, plus another 1 billion USD that we’re applying for from the lender’s resilience and sustainability trust. (Bloomberg Asharq)
- Egypt is planning to take its inaugural 500 million USD panda bond issuance to market in 1Q 2023.
Plans to issue the CNY-denominated bonds have been in the works since 2019, but were put on hold due to the pandemic. Vice Finance Minister Ahmed Kouchouk previously said the ministry could issue the panda bonds before the end of this year. All part of our debt diversification strategy: The government is also looking to issue sukuk and “green” versions of samurai and panda bonds, following the ministry’s JPY-denominated bond issuance in late March. The issuances are part of efforts to diversify our debt and move away from hot money, which has seen some 22 billion USD in outflows this year. (Al Mal)
- The government could sell stakes in companies in the banking and oil sectors before March 2023.
One state-owned bank we know for sure is planning to go public: Banque du Caire (BdC) has long planned to IPO on the EGX but has repeatedly delayed its plans in response to periods of market turmoil triggered by the pandemic and the war in Ukraine. The bank was planning to make its debut this year but decided in July to postpone the sale until market conditions improve. BdC has until 31 March 2023 to finish the IPO procedures.
- Other state companies are looking at going public in 1Q 2023.
Damietta Container & Cargo Handling Company and Port Said Container & Cargo Handling Company — both subsidiaries of the Holding Company for Maritime Transport — could both sell 25% stakes on the EGX during the coming quarter. Both companies took a step towards a share sale yesterday: The ordinary general assemblies of both companies have approved the plans. The government is looking at how and when to reboot its privatization program with recent listing changes and a new pre-IPO fund set up by the Sovereign Fund of Egypt (SFE) in September (Al Mal)
- French luxury fashion Dior considers entering Egyptian market.
France-based high-end luxury fashion company Dior is considering entering the Egyptian market. Egyptian Minister of Supply and Internal Trade Ali El-Moselhy met with President Europe, Middle East, and Africa of Christian Dior Couture Jérôme Baudy and the General Manager Middle East at Christian Dior Couture Pierre de Maigret, in addition to the Chairman and Managing Director of Femex, to discuss investment opportunities in Egypt. The meeting tackled the trade system in Egypt and the local market’s ability to accommodate the French company’s latest fashion lines. The Egyptian market is able to house this kind of global stores to boost the efficiency of the internal trade system. (Arab Finance)
- Chevron finds 3.5 tn cf of gas in the EastMed.
A big gas find in the EastMed: Chevron has discovered an offshore gas field in the Mediterranean estimated to hold 3.5 tn cubic feet of gas. The US energy giant made the finding drilling its first ever offshore well in Egypt at its Narges block off the coast of North Sinai, in which it holds a 45% operating interest. Italian major Eni owns 45% while the state-owned Tharwa Petroleum holds the remaining 10%. The find comes at a good time for Egypt, which has seen output fall from a peak of 7.2 bn cf per day last September to 6.5 bn cf/d in 3Q 2022. (Bloomberg Asharq)
- The World Cup’s first temporary stadium has served its purpose.
Built from 974 piled-up shipping containers, Qatar’s Stadium 974 will see its seventh and final match tonight before it is dismantled. Built in response to concerns that Qatar was spending billions of USDs on stadiums that would be useless after the event, the plan is to take Stadium 974 apart, load it onto a ship, and rebuild it elsewhere. It was originally meant to go to an African country, but the FT is reporting that it may be sent to Uruguay — where it could make another World Cup appearance, since Uruguay is likely to be part of a South American bid to host the 2030 tournament. (The Financial Times)
- Egypt grants golden licenses to 8 projects.
Eight investment projects have been granted golden licenses from the Supreme Committee, headed by Egyptian Prime Minister Mostafa Madbouly. The Golden License has been granted to Haier Egypt for the establishment of an industrial complex for electronics, as well as to CFC Feed and Chemicals for the establishment of a factory for the production of fodder, chemicals, and plant nutrients. Moreover, Al Araby Group for Industrial Development and Trade has also received the license for building and operating a plant for manufacturing and assembling home appliances and electronics. (Arab Finance)
- SCZone mulls setting up investment arm.
The General Authority for Suez Canal Economic Zone (SCZone) is considering setting up an investment arm that can have shares in different projects, particularly green fuel projects. The new company would accelerate the authority’s transition process to become a supportive partner in projects from only providing services and enhancing the investment climate. This step would also boost the economic role played by the SCZone as part of the state’s economic strategy. (Arab Finance)
- One Finance partners with ADVA to offer consumer financing services.
One Finance has signed a partnership agreement with ADVA to launch consumer financing services. Under the partnership, consumer financing services will be offered through eight different categories, including finishing, education, health, travel, car maintenance, weddings, and insurance. One Finance will be able to benefit from ADVA’s network of service providers, which amounts to 2,000 providers and its customers base of 15,000 clients to offer bespoke programs tailored to individual needs with different repayment methods. (Hapi Journal)
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