The IMF lowered its growth projections for Egypt to 4% in 2022/2023 instead of 4.4%. Moreover, the IMF stated that the fiscal policy aims to reduce the high public debt and the overall financing needs through controlling public finances and effective debt management

Newsletter

11 Jan 2023

The IMF lowered its growth projections for Egypt to 4% in 2022/2023 instead of 4.4%. Moreover, the IMF stated that the fiscal policy aims to reduce the high public debt and the overall financing needs through controlling public finances and effective debt management. General government debt declines to about 78% of GDP by the end of the program. To consolidate the gradual reduction of total financing needs, the fund-supported program will set the average maturity of debt issuances in local currency to reach 0.97 years by the end of the fiscal year 2022/23, and the maturity date of the issuance is expected to reach about two years by the end of the program.

The IMF agreement... Full implementation of the automatic fuel pricing mechanism
The Egyptian authorities plan to define tax policy measures that will be implemented in the 2023/24 fiscal year to ensure an increase of 0.3 percentage points in the tax-to-GDP ratio by the end of February 2023. The Ministry of Finance aims to publish by April 2023 the annual tax spending report with details and estimates of tax exemptions and exceptions, including those provided to companies in free economic zones and all state-owned enterprises.
AD Ports in talks over developing Egypt’s Suez Port
AD Ports Group is in talks with the Egyptian government over the development and operation of the Suez Port, known as Port Tawfiq, as per a usufruct contract. This contract marks the Emirati group’s third to operate ports in Egypt. AD Ports, backed by the Abu Dhabi Developmental Holding Company (ADQ), has not responded to these claims. The Sovereign Fund of Egypt (TSFE), which takes part in the negotiations, has not made any comments regarding the matter as well. (Asharq Business)
ExxonMobil wins exploration rights of 2 offshore blocks in Egypt
ExxonMobil has been awarded the exploration rights to two offshore blocks, Masry and Cairo, in Egypt. The awards are subject to the government’s approval of the concession agreements, under which the blocks are covered, and signing them in due course. ExxonMobil Egypt (Upstream) Limited will operate the two blocks, holding a 100% interest. Exploration activities at both blocks are set to commence in 2023, subject to the signing of the concession agreements. (Hapi Journal)
Egypt’s annual inflation increases to 21.9% in December
Egypt’s annual headline inflation rate increased to 21.9% in December 2022, compared to a record of 6.5% in December 2021. The CAPMAS ascribed the year-on-year (YoY) increase in inflation to higher prices of the food and beverages segment by 37.9%, the prices of the housing, water, electricity, gas, and fuel by 6.7% and the healthcare segment by 13.6%. It is noteworthy that Egypt's annual headline inflation rate rose to 19.2% in November 2022, compared to 6.2% in the same month of 2021. (Bloomberg Asharq)
Finance Minister Mohamed Maait gave us our first snippet into the highly-anticipated five-year tax policy document.
The document will not affect the current corporate income tax, which Maait vowed will remain unchanged for as long as he is finance minister, but capital gains tax and income tax amendments are on the table. President Abdel Fattah El Sisi will unveil the document in a few weeks’ time. (Hapi Journal)
Investors have so far poured some 155 billion EGP into the record high-yield 25% CDs released last week by the National Bank of Egypt (NBE) and Banque Misr
Some 105 billion EGP went to the NBE, while Banque Misr took 50 billion EGP, adding that subscriptions were evenly divided between fresh deposits and those who invested after withdrawing from other CDs with lower yields. The Suez Canal is targeting revenues of 8.7 billion USD in 2023, up 10% on the 7.9 billion USD recorded last year. Five of the six companies owned by the SCA are now in the black, up from just one previously. (Al Mal)
Here, it’s worth mentioning here that the high demand for the CDs is a good sign for the EGP moving forward
Noting that these instruments will help curb demand for the greenback and allow the EGP to stabilize at its current rate. The CDs were introduced to convince folks with hard currency deposits in the banking system to de-dollarize and, at the same time, to tamp down inflation by reducing liquidity in the market. (Zilla Capital)
Compass Capital got the green light to do due diligence on Egypt’s most sought-after paints company, Speed Medical is considering selling its stake in Speed Hospital in Obour
And ICMI is looking at a number of acquisitions in the textiles and medical sectors. Compass last week became the fifth company to bid for Pachin with an offer to purchase 51-90% of the paint manufacturer at 30 EGP a share. The offer is the highest Pachin has so far received, valuing the company at 720 million EGP. (Al Mal)
GB Auto subsidiary GB Lease has closed an 1.7 billion EGP securitized bond issuance
The two institutions were joint financial advisors on the transaction alongside the National Bank of Egypt (NBE). The three-tranche issuance is backed by a receivables portfolio of 2.4 billion EGP, with the tranches rated from AA+ through A by Middle East Rating & Investors Service. NBE, CIB, Banque Misr, Banque de Caire, Abu Dhabi Commercial Bank, and NI Capital all subscribed to the issuance, which marks GB Lease’s third securitization following a 4.3 billion EGP issuance in January 2022 and a 2 billion EGP issuance in January 2021. (Arab Finance)
CIB concludes 1.04 billion EGP securitization bonds issuance for B.TECH
Electronic and home appliances retailer B.TECH and Commercial International Bank Egypt (CIB) (COMI) announced the completion of securitization bonds issuance with a value of 1.038 billion EGP. The issuance consists of three tranches with different payment priorities, credit ratings, and interest rates. Each of the three tranches received a prime one (P1) rating. This issuance is part of a short-term 5 billion EGP securitization issuance program over two years. (Mubasher)
Al Ahly Pharos, CIB close 1.6 billion EGP securitization issuance for GB lease
Al Ahly Pharos Investment banking and Commercial International Bank Egypt (CIB) (COMI) announces closing an 1.661 billion EGP securitization issuance for GB lease. The issuance is the third in a program backed by a receivables portfolio of 2.379 billion EGP assigned to Capital Securitization, GB Lease’s special purpose vehicle (SPV). Al Ahly Pharos and CIB acted as financial advisors, transaction managers, and book-runners of the issuance. GB Lease is a subsidiary of GB Auto (AUTO). (Zawya)
Egypt among Deseret News’ 5 most popular destinations in 2023
Egypt came among Deseret News’ top five most popular travel destinations during 2023. The American website highlighted the top five destinations in a list entitled “2023 predictions: 5 international places that will be popular travel spots”, with Egypt ranking fourth in the list. These destinations were chosen because they have new museums that will soon be opened and have less travel restrictions, making them attractive hot spots in 2023. (Arab Finance)
Apex International Energy buys interests in 6 concessions in Western Desert
Apex International Energy has acquired interests in four oil concessions in Egypt’s Western Desert from IEOC Production B.V., a unit of Italy’s Eni. The oil and gas exploration and production company is set to acquire two additional concessions, subject to parliamentary approval of extensions; expected in the first quarter (Q1) of 2023. (Hapi Journal)