One of the sovereign funds in Abu Dhabi agreed with Egypt to invest about 2 billion USD by buying state stakes in some companies

Newsletter

22 Mar 2022

For our top talks today, first, one of the sovereign funds in Abu Dhabi agreed with Egypt to invest about 2 billion USD by buying state stakes in some companies, including the North African country’s largest listed bank. Noting that the agreement with ADQ Holdings includes the purchase of about 18% of CIB. Besides the Commercial International Bank share, ADQ Holdings will acquire stakes in four other companies listed on the Egyptian stock market, including Fawry for Banking Services and Payment Technology. It was not possible to obtain a comment from ADQ Holding, while Fawry declined to comment. Such funding would be welcome for Egypt, whose economy is under increasing strain from the shock waves of Russia’s invasion of Ukraine. (Bloomberg Asharq)

Second, the Egyptian government is set to allocate EGP 130 billion to social protection measures aimed at the mitigation of the impact of global economic challenges.
The assistance package comes in the context of presidential directives to shoulder the impact of the global effects on Egyptian citizens, finance minister Mohamed Maait said. The government social protection package includes 2.7 billion EGP allocated to add 450,000 households to beneficiaries of Takaful and Karama program. It also comprises 190.5 billion EGP allocated to the National Organization for Social Insurance (NOSI) to disburse a 13% annual increase in pensions at a minimum amount of 120 EGP as of April 1st. (Al Mal)
The Egyptian Prime Minister Mostafa Madbouly issued a decree setting prices of unsubsidized bread for three months at least.
The decree set prices of 45-gram, 65-gram, and 90-gram loaves at 0.5 EGP, 0.75 EGP, and 1 EGP, respectively. Moreover, the government will impose penalties on any violation to the decree ranging from a minimum of 100,000 EGP to a maximum of 5 million EGP. On a similar note, Egyptian supply minister Ali El-Moselhi announced that government allocated 36 billion EGP for 6 million tons of local wheat supplies this season. Earlier in March, the government said in a statement that it approved to disburse an exceptional incentive for supplying local wheat at a value of 65 EGP per ardeb. (Arab Finance)
The Central Bank of Egypt’s (CBE) Monetary Policy Committee (MPC) decided on a special meeting on Monday to raise the overnight deposit rate, overnight lending rate, and the rate of the main operation by 100 basis points (bps).
The new increase brought the overnight deposit rate, overnight lending rate, and the rate of the main operation to 9.25%, 10.25%, and 9.75%, respectively. The MPC also raised the discount rate by 100 bps to 9.75%. The CBE attributed its decision to its endeavors to hold inflation in check and support economic activity. Raising interest rates is also aimed at containing effects of supply shocks. Also, the central banks of UAE, Kuwait, and Bahrain raised their interest rates by a 25 basis points (bp), following the lead of the US Federal Reserve. (CBE)
The Egyptian shares rose strongly during Monday's trading, with clear support from purchases by local institutions, to record the highest daily rise since June 2020.
The rise in the Egyptian Stock Exchange during today's transactions comes after the decline in the Egyptian Pound exchange rate By about 16%, despite raising the Central Bank of Egypt for interest rates by 1%. The Egyptian Stock Exchange main indicator jump 4.9% to close at 11511.15 points, and the trading value amounted to 2.200 billion EGP, which indicates an abundance of liquidity. (Zilla Capital)
The Egyptian finance ministry has revised its targets regarding its budget of the fiscal year (FY) 2022/2023.
The new targets include around a total deficit of around 6.3% of Gross Domestic Product (GDP), and a primary surplus of 1.5% of GDP. The government is seeking to increase revenue by around 17% year-on-year (YoY) to 1.447 trillion EGP. The FY 2022/2023 budget comprises a 16% YoY growth in expenditure to about 2.7 trillion EGP including 365 billion EGP allocated for investment and 323 billion EGP subsidies. (Arab Finance)
Egyptian President Abdel Fattah El-Sisi has issued a law amending the Capital Market Act, including the introduction of future flow securitization.
The amendments allow securitization companies to issue tradable bonds whose yields shall be used to fund public or private judicial persons in exchange of future cash flows. These future cash flows must be created for public or private judicial persons, not restricted or conditioned, and bear no entitlement. The new law obligates holders of securities and financial instruments listed on the Egyptian Exchange (EGX) to provide shareholders with electronic systems that enable them to attend general assembly meetings and vote remotely. (Arab Finance)
And for our EGX and companies talks, Raya Holding for Financial Investments (RAYA) announced that its board of directors has approved the offer submitted by Paradigm Logistics to acquire a stake in Raya’s subsidiary Ostool for Land Transportation.
Accordingly, Raya will sell its 62.3% owned stake in Ostool to Paradigm Logistics for a total value of 266.559 million EGP, equivalent to 4.94 EGP per share. (EGX)
Egyptian fintech app for consumer credit products Lucky has secured 25 million USD funding.
The funding round was led by Nclude Fintech Fund which recently attracted investments from Banque Misr, National Bank of Egypt, Banque Du Caire - (BQDC), Global Ventures, and e-finance for Digital and Financial Investments (EFIH). The round also saw the participation of fintech firm PayU, Endeavor Catalyst, Venture Souq, Oman Technology Fund, Arzan capital, and Disruptech Ventures. Lucky is set to use the raised amount to “increase market leadership and build out credit capabilities”. (Arab Finance)
UK-based HSBC bank and educational organization INJAZ Egypt have collaborated to expand their financial education programs in four more countries.
HSBC will provide a grant to INJAZ Egypt and the JA Worldwide network, enabling both organizations to launch programs in Oman, Turkey, Thailand, and Vietnam. The JA Building a Financially Capable Generation initiative will pair educators from JA and volunteers from HSBC with students in classroom and online. The program helps young people aged between 12 and 16 to raise their financial awareness and boost their self-confidence. (Arab Finance)
Banque Misr has reissued its Talaat Harb Certificates with an annual yield of 18%.
On a similar note, The National Bank of Egypt (NBE) has issued certificates of deposits with annual yield of 18%. The tenor of the certificates is one year starting from the day following the purchase. Yields are disbursed monthly. The value of certificates starts from EGP 1,000 and its increments. They can be issued for individuals or minors. The certificate’s holder is eligible to obtain loans guaranteed by the certificate. The value of the certificate can be retrieved after six months from the following day of the purchase. (Bloomberg Asharq)
Heliopolis Housing and Development (HHD) (HELI) announced that its board of directors has agreed to sell a financial portfolio at a total nominal value of around 409 million EGP to Export Development Bank of Egypt (EBE) (EXPA).
The portfolio has a current value of nearly 320 million EGP. This comes as part of the company’s strategic plan to diversify sources of financing and to provide the necessary liquidity to implement the investment plan of the company and complete its ongoing projects. (EGX)
And finally, for our investments talks, French container transportation and shipping company CMA CGM is planning to develop its services and expand in the Egyptian market in next years.
The business volume of Egypt’s unit depends on demand which is the main factor in investment decisions. CMA CGM has joined four consortiums to manage and operate the Dry Port at the 10th of Ramadan City, noting that tenders will be considered in the coming period and that financial and technical biddings will be introduced. It is worth mentioning that the French company’s investments in the superstructure of the Multipurpose Unit at the Alexandria Port have reached 175 million USD. (Al Mal)