Price pressures eased across non-oil businesses and business activities were more stable in Egypt in December 2021

Newsletter

05 Jan 2022

For our top talks today, Price pressures eased across non-oil businesses and business activities were more stable in Egypt in December 2021, according to IHS Markit survey data on January 4th. The headline seasonally adjusted IHS Markit Egypt Purchasing Managers’ Index (PMI) rose to its highest level in four months in December to 49.0, up from 48.7 in November, the index moved closer to the 50.0 neutral threshold. Weaker increases in purchasing costs and wages led to the greatest slowdown in input cost inflation for over three years, while output charges also rose to a lesser extent. Business activity moved closer to stabilization, although price increases and weak demand continued to stem new orders. According to the survey, business expectations ticked up from November but remained at a relatively subdued level. (Al-Mal)

E-commerce in Egypt is expected to grow by 30% by the end of 2022, a report by BOOST for Consultations said. The report attributed this prediction to a number of drivers, including the ease of online purchasing and selling as well as changes in Egyptian consumer behaviour due to the ramifications of the coronavirus.
The report also said that e-commerce in Egypt requires a monitoring system, integrating the activity into the formal economy, expanding and creating appropriate legislation, supporting its infrastructure and logistics, protecting the rights of companies and consumers, and regulating the work of e-shopping web sites. CEO of BOOST Sherif Makhlouf said the development of e-commerce in Egypt requires new legislation to stimulate the sector which reached 100 billion USD in 2021. We believe that 2022 would witness the entry of more global e-commerce platforms in the Egyptian market, especially in the field of food, along with pumping more investments in the existing platforms, mentioning the expansion of Amazon, Ikea, and Zara in Egypt over the past period. (Arab Finance)
Having said so, Paymob, the largest payment facilitator in Egypt, signed a partnership with Cairo Festival City Mall (CFC) to provide all of CFC’s tenants with POS devices that allow for a wide range of payment methods.
Under the deal, CFC’s tenants and merchants now have diverse payment methods to present to their customers, including payment via debit cards, credit cards, and Meeza cards, along with instalment options through different banks, such as CIB, Banque du Caire, Banque Misr, and Al-Mashreq Bank. Paymob also facilitates payments via consumer finance enablers such as valU, Premium Card, Sympl, Contact, Souhoola, and Shahry. (Arab Finance)
Suez Canal Authority (SCA) plans to offer financial incentives for ships that follow environmentally friendly standards.
The incentives include reductions of no less than 15% to 20%, in line with the framework for reducing emissions in accordance with international decisions, and to move towards making the Suez Canal green, including operations inside the canal, and the production of clean energy in its projects. It is worth noting that Suez Canal’s revenues increased 12.8% Year on Year (YoY) to 6.3 billion USD in 2021, compared to 5.6 billion USD in 2020. The number of vessels passing through the canal rose by 10% to 20,694 in 2021, compared to 18,830 in the earlier year. (Al-Mal)
The Egyptian International Pharmaceutical Industries Company (EIPICO) (PHAR) has obtained the approval of the Egyptian Drug Authority (EDA) to produce Covapravir, a drug used for the treatment of Covid-19.
This came as a result of getting the emergency license from the US Food and Drug Administration and the UK’s Medicines and Healthcare products Regulatory Agency to manufacture the drug in Egypt. The production of Covapravir is expected to commence before mid-January 2022. The production process will be executed under the supervision of the EDA. The new drug is projected to be released in the market in the first quarter (Q1) of 2022. EIPICO is an Egypt-based public shareholding company that operates in the pharmaceutical industry. It is a manufacturer and exporter of pharmaceuticals and holds license agreements with a group of international. (Mubasher)
Moving to our investments talks, Beltone Consumer Finance (Belcash), the consumer finance arm of Beltone Financial Holding (BTFH), has signed partnership agreements with Orascom Development Holding (ODH). Under the signed agreement, Belcash will offer “Home Renovations and Education Finance” products to residents in two of ODH’s fully-integrated towns, namely El Gouna and Makadi Heights.
The products offered to El Gouna residents include a new education finance for El Gouna International School, which gives parents the opportunity to finance their kids’ tuition fees, whether partial or full fees, on equal monthly installments over 6 to 12 months. Additionally, El Gouna homeowners have the opportunity to get financing for their home renovations for an extended period that can reach up-to 60 months with competitive interest rates and instant approval. (Arab Finance)
The volume of Al Baraka Bank Egypt’s (SAUD) small- and medium-sized enterprises (SMEs) portfolio recorded 3.6 billion EGP at the end of December 2021. The SMEs portfolio is targeted to reach 5.26 billion EGP by the end of 2022.
Moreover, the bank’s total financing portfolio rose to 23 billion EGP at the end of December 2021, versus 21 billion EGP at the end of September 2021. Meanwhile, the bank’s deposits portfolio stood at 68 billion EGP at the end of December 2021, noting that it is projected to reach 73.5 billion EGP this year. On Monday, Al Baraka Bank Egypt announced that its board of directors has approved the bank’s estimated budget for 2022, targeting a net profit of 1.41 billion EGP for 2022. (Arab Finance)
Turing to our EGX and companies talks, Gahez, an Egypt-based e-commerce startup and B2B fashion marketplace, has successfully raised 2 million USD in its latest funding round. The pre-Seed round was led by Disruptech Ventures with the participation of Egypt Ventures, Tanmeyah (an EFG Hermes company), Afropreneur fund, and other strategic angel investors.
The company will use the funds to expand its team and develop its tech infrastructure. Established in 2021, Gahez operates an online B2B marketplace that connects fashion retailers with suppliers. The company also provides retailers with credit facilities and facilitates settlement with suppliers. Gahez now operates in 16 governorates in Egypt, and currently has more than 15,000 retailers and 142 manufacturers on its platform. (Al-Mal)
Sarwa Insurance has reached an agreement with Fawry for Banking Technology and Electronic Payment (FWRY) for providing e-collection of insurance premiums services. The company has obtained the Financial Regulatory Authority’s (FRA) approval to partner up with Fawry.
The services will be offered to Sarwa Insurance’s customers through Fawry’s outlets and mobile app within the coming few days. This partnership aims at easing the collection process of insurance premium for customers across the country and saving time, he highlighted, adding that it comes in line with the government’s financial inclusion initiative and the digital transformation plan. (Al-Mal)
Kingsway Frontier Consumer Fund has raised its stake in Fawry for Banking Technology and Electronic Payment (FWRY) to 5.14% from 2.78% in a transaction valued at 30.25 million EGP. This came after Kingsway fund purchased 2.35 million shares in Fawry at an average price of 12.87 EGP per share.
Fawry is an Egypt-based company that provides an electronic payment network. The company allows users to pay bills in multiple channels, such as online, using automated teller machines, mobile wallets, and retail points.
Edita Food Industries (EFID) revealed that it has not reached a satisfactory agreement with the Egyptian Belgian Company for Industrial Investments, the manufacturer of the brand “Ole”. Hence, negotiations between the two parties have been suspended.
On November, 21st, 2021, Edita announced the signing of a non-binding letter of intent with the Egyptian Belgian Company regarding the acquisition by Edita or any of its affiliates or subsidiaries to assets owned by the Egyptian Belgian Company. (Arab Finance)
Summit Technical Solutions (STS) won a tender to implement the second phase of a project for Cable Network Egypt (CNE), which includes establishing an interoperability center to manage the company’s business in the event of disasters and crises at a cost of 20 million EGP.
The new center will be located about 50 kilometers away from the main center, which is based in Sixth of October City. According to the statement, the exchange center will supply services through remote control, which constitutes a major driver for overcoming the coronavirus pandemic while maintaining physical distance, as the company succeeded in providing its services to customers during the pandemic through its strong infrastructure and pioneering technologies. (Arab Finance)