The Egyptian government may apply for another assistance package from the International Monetary Fund if the economic situation deteriorated

Newsletter

10 Mar 2022

For our top talks today, the Egyptian government may apply for another assistance package from the International Monetary Fund (IMF) if the economic situation deteriorated. The conflict between Russia and Ukraine hit Egypt the hardest, as the country is considered the world’s top wheat exporter. Investors are concerned over Egypt’s “wide current account and budget deficits and exposure to possible U.S. Federal Reserve rate hikes”. The international news agency revealed that analysts at JPMorgan believe that the Egyptian pound is 15% overvalued and may trade at 17.5 EGP against the US dollar by the end of 2022. Egyptian finance minister Mohamed Maait stated that Egypt’s strategic wheat reserve will be sufficient for eight months after the supply of locally-produced wheat in April. (Reuters)

The Central Bank of Egypt (CBE) has deferred the maturity date of a 2.3 billion USD Saudi deposit to October 2026.
Total GCC’s deposits at the CBE decreased by 3 billion USD to reach 12 billion USD by the end of September 2021. Deposits from the GCC region included a 5.7 billion USD made by UAE and 4 billion USD made by Kuwait. It is worth noting that the value of trade exchange between Egypt and Saudi Arabia surged 34% to 4.3 billion USD in 2021, from 3.2 billion USD in 2020. (Al Mal)
Egypt is set to receive a Russian wheat cargo in March that was contracted prior to the conflict between Russia and Ukraine, according to the Egyptian Cabinet’s Spokesman Nadder Saad.
Egyptian reserves of strategic commodities are sufficient for around six months. The outlets of supply commodities offer products at unincreased prices, adding that meat will be supplied at ordinary prices. Earlier this week, Egyptian finance minister Mohamed Maait said that the increase in global wheat prices would raise the cost of Egypt’s imports of wheat by 12 billion EGP to 15 billion EGP in the state’s budget for fiscal year (FY) 2021/2022. (Arab Finance)
Egypt’s metal exports surged 89% year-on-year (YoY) to 3.4 billion USD in 2021, according to the Chairman of the Export Council for Building Materials, Refractory, and Metallurgy Industries (ECBM), Walid Gamal El-Din.
Iron and steel exports jumped 145% to 1.78 billion USD in 2021, from 728 million USD in 2020. The lead exports soared 292% to 1.99 million USD in 2021, from 509,000 USD the year before. Moreover, exports of nickel rose 212% YoY to 3.3 million USD in 2021, while zinc exports went up 29% YoY to 3.3 million USD, Gamal El-Din said. Egypt’s exports of copper and copper products soared around 134% to 409 million USD in 2021, from 175 million USD in 2020. It is worth noting that Egyptian non-oil exports grew to 32.34 billion USD in 2021, from 25 billion USD a year earlier. (Al Borsa News)
The Egyptian government announced collaboration with American technology company IBM’s consulting arm and German software firm SAP to automate the country’s tax system.
IBM Consulting and SAP will equip Egypt’s finance ministry with a “comprehensive business operations automation platform”. Trails of the new systems have been conducted in 10 tax offices in Greater Cairo and will expand to cover more offices in 2022. IBM Cloud Pak for Business Automation system will integrate artificial intelligence (AI) in the finance ministry’s tax-relevant processes. The Egyptian government has launched a national plan for automation and digitalization of the Egyptian Tax Authority (ETA). (Arab Finance)
Egypt’s strategic wheat reserve will be sufficient for eight months after the supply of locally-produced wheat in April, according to the Egyptian finance minister Mohamed Maait.
Egypt is keen on securing wheat supplies from alternative markets amid the exceptional circumstances facing the global economy. The minister stressed that the government is doing its best to absorb much of the global economic shocks on the heels of the Russia-Ukraine conflict which doubled inflation rates caused by a troubled supply chain. He announced that the new budget draft will be presented to the House of Representatives with adjusted figures to cope with the jump in global prices of energy and commodities. (Al Mal)
Turning to our investments talks, Egyptian Group for Multipurpose Terminal (EGMPT), the commercial arm of the Egyptian Ministry of Transportation, has reached an agreement with AD Ports Group on the revenues of Safaga’s multipurpose terminal.
Under the agreement, AD Ports will receive 5% of the terminal’s total revenue in exchange of development and operation of the terminal. In 2021, EGMPT signed an agreement with AD Ports Group to develop and operate a multipurpose terminal in Safaga Port on the Red Sea. With 1000-meter-long quay, It is expected that Safaga’s multipurpose terminal is planned to handle up to 3 million containers annually. (Al Mal)
Abu Qir Fertilizers and Chemicals Industries Company (ABUK) announced that its board of directors approved to consider the establishment of the Green Hydrogen and Green Ammonia project in partnership with France’s Total Co.
Moreover, the board agreed on the appointment of Abed Ezz El-Regal Abdel All as a representative of the Egyptian General Petroleum Cooperation in the company’s board. (EGX)
And for our EGX and companies talks, EFG Hermes Corp Solutions, a subsidiary of EFG Hermes (HRHO), has signed a sale and leaseback agreement with LMD at a value of 600 million EGP.
Under the agreement, EFG Hermes Corp Solutions will finance LMD’s complex 3’Sixty through two equal tranches; the first was completed in January, while the second was closed earlier this month. The signed deal will enable LMD to accelerate the construction of 3’Sixty business and leisure park. This partnership with LMD marks the third in agreements inked by EFG Hermes Corp-Solutions in the real estate industry, coming in line with the company’s strategy to collaborate with key players across vital sectors to help them meet their growing financing needs. (Arab Finance)
Elite Consultancy House is seeking to launch initial public offering (IPO) for four companies in the Nile Stock Exchange (NILEX) in 2022, according to the company’s Vice President Tamer Hussein.
Elite is restructuring the four companies to launch the IPOs in the next six months. The top official revealed that the four companies are valued at around 30 million EGP, noting that their capital will be increased in the coming period. (Al Mal)
ODIN Investments (ODIN) announced it has recently raised its ownership in Tissolli Egypt’s capital to around 75%, which is set to amount to 20 million EGP.
The company has begun pilot production at Tissolli’s factory in Egypt this month. This came as a response to deny the misleading news published on one of the media platforms, entitled “ODIN Investments and global Tissolli invest EGP 100 million each to upgrade Tissoli’s factory in Egypt”. It is worth noting that ODIN Investments established Tissolli Egypt for manufacturing cooking utensils, with ownership of 54% of its total capital worth 11 million EGP. (Arab Finance)
e-finance for Digital and Financial Investments (EFIH) reported a consolidated net profit attributable to the parent company of 519.73 million EGP in 2021, up from 353.88 million EGP in 2020.
The company also generated consolidated revenue of 1.96 billion EGP last year, compared to 1.23 billion EGP in 2020. On the other hand, the company’s standalone net profit after tax dropped to 211.26 million EGP in 2021 from 344.75 million EGP in 2020. It is worth noting that e-finance announced that its board of directors has endorsed the cash dividends distribution proposal of 0.10 EGP per share. (EGX)
Rovan Urban Development (RUD) has launched the second phase of Evora Tower project in the New Administrative Capital (NAC) with initial investments of 350 million EGP.
Located in 2,600 square meters (sqm), the project includes 12 floors in addition to the ground floor and incudes commercial, administrative, and medical activities. Demand on commercial and administrative properties will increase in 2022 due to the big returns they yield compared to residential units, according to the RUD’s Chairman Mohamed Nasr. It is worth noting that RUD sealed an agreement with MRB Facility Management to manage and operate Evora project in NAC. (Hapi Journal)
Sixth of October Development and Investment Company (SODIC) (OCDI) reported a 54% year-on-year (YoY) growth in gross contracted sales for the full year ended December 31st 2021.
Gross contracted sales amounted to EGP 11.36 billion last year, marking a new record in terms of both number and value of sold units despite obstacles related to a temporary suspension of sales at West Cairo’s 500 acres project in New Zayed. The growth in contracted sales was driven by the sale of 1,745 units across all SODIC’s projects. The cancellation rate recorded 17% in 2021, recording cancellations of EGP 1.97 billion, compared to a cancellation rate of 14% in 2020. Furthermore, net cash collections stood at EGP 4.95 billion last year, with delinquencies at 6%. (EGX)
O West, one of Orascom Development Egypt (ORHD)’s flagship projects in 6th of October city, announced the launch of the first FIP Star International padel tournament.
The tournament will take place during the period from March 11th to 13th at O West, under the patronage of the International Padel Federation and the Egyptian Padel Federation (under establishment), in collaboration with IEVENTS. Moreover, O West will host this tournament with a prize pool of 13,500 EUR. The padel tournament is as part of Orascom Development’s strategy to organize sports and cultural events and to empower young people. (Arab Finance)