IMF Managing Director Kristalina Georgieva stated that the IMF should reach staff-level agreements on loans to Egypt and Tunisia

Newsletter

05 Oct 2022

IMF Managing Director Kristalina Georgieva stated that the International Monetary Fund should reach staff-level agreements on loans to Egypt and Tunisia “within days or weeks, hard to predict but it will be very soon”. We will go to the scenario of weeks not days. We beleive that the IMF negotiations will be finalized not before the 1st week of November and the size of the package could be around 6 billion USD, based on the Prime Minister, Mostafa Madbouly’s latest statements. Egypt has been in negotiations with the IMF since March in a bid to secure financial assistance following the economic shocks brought on by Russia’s war in Ukraine and rising interest rates in advanced economies. (Reuters)

On another note, Georgieva said that the world could avoid recession if fiscal policies become compatible with the tight monetary policy adopted by many governments over the world.
She noted that the fiscal policy should not be “idle” as the cost of living is rising and affecting parts of society. On September 22nd, Egyptian Minister of Finance Mohamed Maait stated that Egypt could reach an agreement with the IMF in a month or two. (Reuters)
Inflation keeps Egypt’s non-oil economy under pressure in September.
The Egyptian non-oil sector remained under pressure in September, as a result of inflation, energy rationing, restrictions on imports, and a decline in demand. Last month saw considerable shrinkage in the activity of the private sector owing to contracted demand and inflated prices. The headline seasonally adjusted S&P Global Egypt Purchasing Managers’ Index™ (PMI™) – an indicator of operating conditions in the non-oil private sector economy – hit 47.6 in September, unchanged from that seen in August, but still below the 50-point neutrality threshold. The index showed a deterioration in business conditions, as companies are still cutting their purchases, while their inventories are depleting. However, businesses showed a positive sentiment towards future growth in output in a year.
Lots of investment flowing into logistics hubs and … cooking oil complexes.
The Supply Ministry has four logistics and retail hubs in the pipeline, along with three cooking-oil complexes worth a combined 321 million USD and signaled we could see another cooking oil complex in partnership with Malaysia. The ministry is currently tendering two logistics and retail hubs in Kafr El Sheikh and Suez. The ministry is separately planning to contrac for two logistics hubs worth a combined 5.5 billion EGP through direct order. Meanwhile, there are fresh tenders for three cooking oil complexes worth a combined USD 321 mn in Alexandria, Sohag and Al Sadat City. (Enterprise)
Kuwait’s Agility Logistics plans to invest 60 million USD to set up and operate two customs and logistics services hubs in Ain Sokhna and East Port Said.
The two hubs will automate and digitize customs processes through a digital link to all relevant government agencies, feeding into the Nafeza single digital customs window implemented last year. The move should expedite customs clearance and improve the Customs Authority’s oversight. Construction of the hubs is expected to commence by 2H 2023. (Hapi Journal)
Egypt is looking at legislation to promote the use of EVs.
Egypt’s Senate is discussing a bill that would establish a new regulatory body that will set policy for EVs assembly in Egypt. The bill also establishes a new fund that will provide financial incentives and facilities for EV assembly. We expect the legislation to be a key component of Egypt’s long-awaited automotive strategy which has made local EV assembly a key cornerstone. (Enterprise)
Saudi STC acquires B Investments’ stake in Giza Systems for 119 million USD.
B Investments Holding (BINV) announced that it finalized the sale of its entire stake in Giza Systems to Solutions by STC, a subsidiary of Saudi Telecommunication Company (STC), for a total equity value of 119 million USD. The terms of the transactions included depositing 10% of the value of shares sold in an escrow account for 45 days as of the execution date pending the assessment of Giza Systems’ working capital and cash position balances. B Investments holds a 44.7% indirect stake in Giza Systems through its subsidiary Inergia Technologies. B Investments owns 68.0% of Inergia and Inergia owns 65.7% of Giza Systems. (Arab finance)
Wadi Kom Ombo logs 47.3% YoY in FY 2021/22.
Wadi Kom Ombo for Land Reclamation Company posted a 47.26% year-on-year (YoY) growth in net profit after tax during the fiscal year (FY) 2021/2022. The company’s net profit after tax reached 32.42 million EGP in FY 2021/2022, up from 22.015 million EGP the year before. Net operating revenue rose to 128.365 million EGP in the period ended on June 30th 2022 from 122.27 million EGP a year earlier. Wadi Kom Ombo is an Egypt-based company that is engaged in the real estate development sector. (Arab Finance)
Egyptian technology start-up CardoO raises 660,000 seed funding.
The financing round was led by the Alexandria Angels with participation from Sofico Investments, the European Bank for Reconstruction and Development (EBRD), and Saudi Arabian angel investors. According to the statement, CardoO plans to acquire 200 million USD of market share over the next five years. (WAYA)
EFG Hermes Corp-Solutions, Klickit to offer financial services for education providers.
EFG Hermes Corp-Solutions signed an agreement with e-payment platform Klickit to provide the latter's clients with a set of financial solutions for payment of education fees. Under the agreement, Klickit’s clients of education providers will have access to EFG Hermes Corp-Solutions’ leasing and factoring services to cover their capital expenditures. Capital expenditures covered by EFG Hermes Corp-Solutions comprise all types of assets, including administrative and educational headquarters, school equipment, and transportation fleets. (Hapi Journal)