The Suez Canal Authority issued a decision to increase transit fees for all types of ships transiting the canal by 6%

Newsletter

22 Nov 2021

The Suez Canal Authority issued a decision to increase transit fees for all types of ships transiting the canal by 6%

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For our top talks today, in light of the aggravation of the crisis of high freight prices and the great confusion in global supply chains accompanied by a decline in the flow of goods and services, the Suez Canal Authority issued a decision to increase transit fees for all types of ships transiting the canal by 6%, starting from next February, in light of expectations that this will affect the continued rise of Nawalin. Ahmed El-Shamy, a transport and logistics expert, said that the increase in canal fees undoubtedly has an impact on the navigational market, describing the Suez Canal Authority’s decision as “its right.” It is worth mentioning that the Corona pandemic caused a disruption in all supply chains from transportation, distribution and storage, and the suspension of at least 180 million containers in ports, a large part of which is in China, where requests exceeded the supply, and therefore we find areas where freight increased to 550% and other areas only 50%.

Moreover, the Suez Canal administration will implement the new rental values for floating marine units and pollution control equipment as of next January.
The Suez Canal announced that locomotives are calculated per day in cases of scraping, flotation, bumping, picking up and fire, which result in the partial or complete closure of the navigation course for a period of more than 24 hours, with an addition of 200% in the case of partial closure and 300% in the case of total closure. The Suez Canal explained that the rent of the floating units includes the imposed locomotives and the service locomotives accompanying the transiting ships. While the locomotive, which has a capacity of up to 3,400 horses, has a rental value of 25,000 USD per day, and more than 4000 horses are rented at about 29,500 USD, while the 5,500 horses are rented at about 36,500 USD per day. (Al-Mal)
In the same context, a number of shipping lines have recently launched new and fixed services between Egypt, the eastern Mediterranean basin, and the Black Sea, especially Turkish ports, taking advantage of the high prices of marine looms from China to Egyptian ports, for importers to move their services to the Turkish market and some Black Sea countries and Egyptian port.
Here, it is worthy to mention that the Black Sea region and Turkey have become a major competitor to the Chinese market, which led to the concentration of a number of international shipping lines to meet the demand for trade in that region, due to its low prices compared to the Chinese market. (Al-Mal)
In this regard, more than one shipping line announced the launch of new services that include the Mediterranean region, in which a number of Egyptian ports are located. Medkon Line officials confirmed the launch of a new service called the MIA service, which will operate regularly between the port of Iskenderun, Mersin in Turkey, Alexandria and Damietta, where the sailing schedule for the new service will be (Mersin - Iskenderun - Alexandria - Damietta - Beirut).
The International Shipping Line added that the new service will be launched at a rate of one ship per week, and its first voyage to Damietta Port will start at the end of the first week of November. Last October, the French shipping line CMA CGM announced the launch of a weekly service within the short marine services, according to which it will link northern Greece with Egypt and southern Turkey. (Reuters)
Equally important, the World Bank expects remittances to developing countries in the Middle East and North Africa to grow by an estimated 9.7% in 2021 to reach 62 billion USD, supported by the return of growth in the host countries in the European Union (particularly France and Spain), and the increase in global oil prices that affected positive impact on the countries of the Gulf Cooperation Council.
The Bank attributed the credit for this increase to the strong improvement in inflows to Egypt (12.6% to 33 billion USD) and Morocco (25% to 9.3 billion USD), return migration and transit migration, respectively. (World Bank)
Additionally, investments of Arab countries in US treasury bonds and bills at the end of last September amounted to 266.3 billion USD, representing 3.5% of the world’s holdings of the US debt instrument, amounting to about 7.55 trillion USD.
It is worth noting that Egypt ranked eighth, with investments amounting to $2.3 billion, representing 0.8% of Arab investments and 0.03% of world countries’ investments, then Mauritania with investments of 930 million USD, representing 0.3% of Arab investments, and 0.01% of world countries’ investments. (Daily News)
Moving to our EGX & companies talks, first, French hypermarket Géant Casino, a subsidiary of Groupe Casino, plans to invest EGP 1 billion in Egypt over the coming five years.
The hypermarket will open 15 new supermarkets, hypermarkets, and express markets in Egypt. The announcement came as Géant inaugurated its first branch, in which it invested 100 million EGP, near Rehab City on Thursday, November 18th. (Hapi Journal)
Second, Arabian Food Industries Company (Domty) (DOMT) is focusing on maximizing profitability over the coming period amid the global challenges represented in higher input prices and costs of shipping.
The company will work on boosting profits through raising prices of products and increasing the contribution of the bakery segment to the company’s total revenue. Moreover, the company aims at expanding gradually in the milk products segment over the coming period, targeting capturing 1.5% of the milk products market's share in Egypt. (Al-Mal)
By the same token, Abu Auf, an Egyptian company that is specialized in providing healthy food, is expanding into the UAE.
This is the company’s first step in expansion into regional markets. The company plans to open five new branches in the UAE by 2022. However, the healthy food brand’s parent company, AUF, plans to make its debut on the EGX by the second quarter of 2022 and could offer up to 49% of the company for sale. (Enterprise)
Also, Egypt is planning to sell an additional stake in Abu Qir Fertilizers and Chemicals Industries Company (ABUK) on the EGX within a month.
Moreover, the government is aiming at completing the offering of stakes in four state-owned companies in the first half (H1) of 2022. It is worth noting that Abu Qir Fertilizers reported an 87.84% year-on-year growth in net profit after tax for the first quarter (Q1) of fiscal year (FY) 2021/2022, recording EGP 1.289, compared to a profit of 686.55 million EGP in Q1 FY 2020/2021. (Reuters)
Additionally, Integrated Diagnostics Holdings (IDH) (IDHC) is considering a number of acquisition transactions in Africa, Asia, and the Middle East. The company is looking forward to expanding in the healthcare sector of these markets due to the similarities between them and the Egyptian market.
IDH has been able to open 12 new branches during the first nine months of 2021 as part of its plan to launch up to 30 to 35 branches annually. It is worth noting that IDH reported a consolidated net profit attributable to the parent of 1.10 billion EGP for the first nine months of 2021, compared to 373.139 million EGP in the same period of 2020. Meanwhile, the company’s standalone net profit for the January-September period of 2021 stood at 25.74 million USD, down from 27.51 million USD in the year-ago period. (Al Borsa Newspaper)
Likewise, Teams Egypt, an Egyptian medical tech company, has signed a $300 million agreement with the University of Texas Medical Branch to set up a campus in Egypt.
Teams is currently deliberating between Sheikh Zayed and Al Salam City for the new campus, which will include colleges of nursing, public health, medical sciences, and policies. The company has secured 25% of the necessary financing from unnamed Chinese investors, and has signed initial agreements with unnamed Egyptian individual investors, businesses, and banks for further financing. (Al-Mal)
In addition, Al Ahly is studying offering almost half the club in an initial public offering (IPO) on the Egyptian Exchange (EGX). The club’s board are considering listing a 49% stake on the exchange, without disclosing a timeline for the sale.
The shares will be sold in the newly-formed Al Ahly Football Company (AAFC), which will hold all of the club’s football-related assets by June 2022. The company will be responsible for managing and organizing all the club’s professional football activities including academies, local and international competitions, marketing activities, merchandise, advertising, and player transfers. (Al Arabiya)
And finally, the Egyptian Financial Group Hermes Holding (EFG Hermes) (HRHO) announced the completion of its transformation into an Egyptian universal bank with a market-leading frontier emerging markets (FEM) investment banking platform.
This comes following the company’s acquisition of a 51% stake in the Arab Investment Bank (aiBank) with TSFE Financial Services and Fintech Subfund, a sub fund fully owned by the Soverign Fund of Egypt, owing 25% of the bank’s capital. It is worth noting that the National Investment Bank’s (NIB) stake in aiBank remains at 24%. This move marks a strategic entry into the fast-growing and robust Egyptian commercial banking sector. (EGX)