The Egyptian government is considering setting oil prices at a range between 80-85 USD per barrel under the budget for fiscal year 2022/2023
For our top talks today, first, the Egyptian government is considering setting oil prices at a range between 80-85 USD per barrel under the budget for fiscal year (FY) 2022/2023, according to the Deputy Minister of Finance Ahmed Kouchouk. It is worth noting that Egypt estimates the price of Brent crude at 60 USD per barrel under FY 2021/2022 budget. In 2022, oil prices have witnessed constant increases, hitting record highs, with Brent crude hovering around the 140 USD the estimated price under Egypt’s budget would result in an increase in the gross domestic product (GDP) deficit by around 0.2% to 0.3%. (CNBC Arabia)
- Second, the Egyptian Suez Canal has recorded a 20% year-on-year (YoY) growth in revenues for the first quarter (Q1) of 2022.
Revenues amounted to 1.691 billion USD in Q1 2022, compared to 1.409 billion USD in Q1 2021. The number of ships transiting the canal rose by 15.8% during the period starting from January to March 2022, registering 5,303 vessels, as compared to 4,581 ships in the same period of 2021. In February, the Suez Canal generated revenues excluding navigational services of 545.5 million USD, up by 15.1% from 474.1 million USD in the same month of 2021. On March 23rd, the SCA announced some amendments to surcharges levied on laden and ballast tankers passing the canal in both directions that would be as of May 1st. (Arab Finance)
- Moreover, Egypt’s cooperation portfolio with the European Investment Bank (EIB) has reached 7 billion EUR.
Egypt is a key partner to the EIB and the bank is interested in entering partnerships to develop the Egyptian private sector as per the priorities of the country. The bank also seeks to continue financing infrastructure projects and supporting the human development field. Moreover, the delegation is ready to collaborate with the Egyptian government on the events of the 2022 United Nations Climate Change Conference (COP 27) to mull over ways to cut the cost of green financing in developing countries. (Arab Finance)
- Automotive sales in Egypt grew by 9% year-on-year (YoY) in the first two months of 2022, reaching 46,778 cars, as compared to 42,892 in the same period last year, according to a recent report by the Automotive Information Council (AMIC).
Sales of passenger cars in the Egyptian market rose by 17% in January and February to 36,589 cars from 31,233 in the same months of 2021, according to the report. On the other hand, sales of trucks recorded a 5% YoY decline, reaching 7,213 vehicles in the two-month period, as compared to 7,614 trucks. As per the buses segment, sales also fell by 17% YoY to 2,976 units from 4,045. Chevrolet topped the automotive sales in Egypt, acquiring a market share of 14% in January and February combined. (Al Mal)
- On the other hand, the European Bank for Reconstruction and Development (EBRD) has downgraded Egypt’s economic growth for 2022 to 3.1%, down from 7.2% in 2021, according to the EBRD’s March 2022 Regional Economic Update report.
Egypt’s growth outlook was impacted by higher food and energy price inflation amid the ongoing Russian invasion of Ukraine. However, the bank forecast Egypt’s gross domestic product (GDP) to bounce back to 6% in 2023. “Yields on Egypt’s dollar-denominated government bonds increased in the aftermath of the invasion of Ukraine, reflecting the vulnerability of the Egyptian economy to steeply rising food and energy prices,” the report said. The Russian-Ukrainian war is likely to affect countries dependent on food imports, such as Egypt, the world’s largest wheat importer, causing import inflation, the bank pointed out. (Arab Finance)
- And for our EGX and companies talks, Swvl shares rise on Nasdaq debut. Swvl rose on their Nasdaq debut on Friday as the company concluded its SPAC merger with Queen’s Gambit Growth Capital.
Shares rose to an intraday high of 10.30 USD after opening at 9.60 USD before paring gains to close at 10.00 USD. The company — now known as Swvl Holding following the merger — offered a 35% stake to investors in a sale that originally valued it at 1.5 billion USD. The company received 164.8 million USD in gross proceeds from the sale, including 111.5 million USD in pre-funded private investments in public equities (PIPE) and 53.3 million USD in cash. SPACs have been under pressure in recent months as investor enthusiasm has waned amid market volatility and an extended sell-off in tech stocks. Average redemption rates soared to 90% in February, up from just 14% a year before, while the number of SPAC mergers terminating pre-IPO is increasing. The De-SPAC Index, which tracks 25 US SPACs listings, is down more than 50% in the past 12 months. Swvl is the second MENA SPAC to hit the Nasdaq after Anghami made its debut earlier this year. (Bloomberg)
- Flat6Labs, a seed and early-stage venture capital company, has partnered with The Saudi Venture Capital Company (SVC) to establish a new seed program and fund to support early-stage entrepreneurs in Saudi Arabia.
With a size of 150 million SAR, Startup Seed Fund will enable the growth of more than 20 Saudi innovative startups over the next three years. The fund will invest between 750,000 SAR to 1.5 million SAR in each company, alongside follow-on funding to help companies expand inside and outside the Kingdom. Meanwhile, the four-month Flat6Labs Riyadh Seed Program will be convened twice a year for over three years as part of the fund. The program aims to enable entrepreneurs to develop their business skills, build their products, test market fit, improve their business models, and partner with external investors. (Mubasher)
- Arabian Food Industries Company (Domty) (DOMT) has received a preliminary non-binding offer from Expedition Investments to acquire up to 90% of Domty’s shares.
Domty is currently studying the offer and its board of directors will hold a meeting to discuss the financial and legal aspects of the deal. It is worth highlighting that the company’s consolidated net profit attributable to the parent company fell to 72.42 million EGP in 2021 from 157.96 million EGP in 2020. (EGX)
- International Company for Medical Industries’ (ICMI) ordinary general meeting (OGM) approved selling an administrative branch in Cairo in consideration of 1.5 million EGP.
The OGM also approved presenting a purchasing offer for a minimum of 75% of Alfa Medica and New Alfa companies at a price of 0.55 EGP per share, in addition to presenting an offer for the full acquisition of a medical clothes company for 4.3 million EGP. (EGX)
- Emerald Real Estate Investment’s (EMRI) ordinary general meeting (OGM) approved a finance lease agreement at around 2.5% interest with Edge Development and Project Management for additional financing of 50 million EGP from HD Leasing.
The agreement brings the total value of financing received by Emerald to 100 million EGP. Meanwhile, the company’s shareholders decided to cancel an 137.655 EGP purchasing agreement for (A) administrative building with Edge Development and Project Management. The OGM cancelled 8.28 million EGP lease agreements with Egyptians for Housing and Development Company (EHDR) and ODIN Investments (ODIN) for fourth and fifth floors at (A) administrative building. (EGX)
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