Zilla Capital expects that the CBE is likely to leave interest rates on hold
For our top talks today, Zilla Capital expects that the Central Bank of Egypt (CBE) is likely to leave interest rates on hold when it meets today despite forecasts for rising inflation at home and higher interest rates abroad. We expect the Monetary Policy Committee to maintain the benchmark rate at 8.25%, adding that the Egyptian pound carry trade won’t face immediate pressure from rising US rates, and that inflation is unlikely to rise above the central bank’s target range. Additionally, inflation will continue to rise in the coming months, with most forecasting the headline urban rate to average between 7-7.5% during the first six months of 2022 as rising oil and food prices filter through to the local economy. Also, it is expected that the central bank could consider raising rates later this year as global rates tick higher. (Zilla Capital)
- In addition, Egypt allowed the establishment of national credit rating companies, after canceling the requirement for an international rating agency to contribute to the capital of the company wishing to engage in rating activity in the country.
urrently, two companies operate in Egypt in the field of credit rating, with a license since 2004: "Middle East Credit Rating" and "Capital Intelligence Egypt”. Credit rating agencies are an essential element in the financial markets to determine the extent to which companies wishing to issue bonds or sukuk are able to pay their obligations on their due dates, as well as to grant a degree of credit solvency to these companies, and to the issues subject to the rating. We believe the decision is good, and a positive step that supports the debt market, which is witnessing a continuous rise in issuance. (Bloomberg Asharq)
- In a similar context, Egypt expects to double the volume of securitization bonds in 2022. The volume of securitization bonds in 2021 amounted to about 18 billion EGP, and we expect to double this number in 2022,”
according to Islam Azzam, vice president of the Egyptian Financial Supervisory Authority. It is worthy to mention that the value of bonds trading on the Egyptian Stock Exchange amounted to 543.5 billion EGP during 2021, compared to 378 billion EGP in the previous year, an increase of about 44%. (Bloomberg Asharq)
- Egypt aims to offer 10 companies on the stock exchange during 2022, according to Mohamed Maait, Egypt Minister of Finance.
Maait's statements come hours after the Egyptian Cabinet announced the discussion of the government's plan for the current year 2022, as the Egyptian government is looking forward to resuming the government companies' program during next March. Net foreign transactions on the EGX declined by 57% to about 6.6 billion EGX in 2021 from 15.4 billion EGX in sales in 2020, while the market capitalization of shares rose by about 18% in 2021 to reach 765.6 billion EGX with the support of new proposals in the market. (Bloomberg Asharq)
- The Micro, Small and Medium Enterprise Development Agency (MSMEDA) has financed microenterprises with around 4.5 billion EGP in 2021.
This marks a 200% growth as compared to provided financings of 1.9 billion EGP in 2020. Moreover, the MSMEDA has pumped 1 billion EGP in financings for the Decent Life initiative, including a sum of 790 million EGP for the microfinance sector. It is worth noting that the MSMEDA has allocated 1.4 billion EGP in financing for the initiative. (Arab Finance)
- H2-Industries has obtained the preliminary approval of the General Authority for Suez Canal Economic Zone (SCZone) to develop a 1-gigawatt (GW) liquid organic hydrogen carrier (LOHC) hub at East Port Said.
This marks the first-of-its-kind project to be developed in the world, H2-Industries pointed out. The Suez Canal Project is set to produce 300,000 tons of green hydrogen per year at half the levelized cost of current green hydrogen production technologies, taking the cost even lower than current levels for low-carbon and grey hydrogen production. Moreover, the hydrogen plant will be fed with 4 million tons per year of organic waste and non-recyclable plastic, to be secured at the Mediterranean entrance to the canal. (Arab Finance)
- The Egyptian Electric Utility and Consumer Protection Regulatory Agency (Egyptera) has approved the integration fees of electricity produced from power generation projects from renewable resources.
This will be applied on all existing projects for self-consumption under net metering system in accordance with the license conditions issued per each project. Accordingly, power plant operators will pay integration fees ranging between 0.257 EGP and 0.329 EGP per kilowatt/hour (KWh) to the Egyptian Electricity Holding Co as a settlement for the costs charged by its distributers. (Arab Finance)
- Moving to our EGX and companies talks, valU, a subsidiary of Egyptian Financial Group Hermes Holding (EFG Hermes) (HRHO), has signed a partnership agreement with PayTabs Egypt and Mazadat.
The agreement will enable Mazadat’s users to utilize the buy-now pay-later (BNPL) services provided by valU for C2C and B2C e-commerce, and process online payments via PayTabs Egypt’s payment gateway. Under this partnership, customers of Mazadat will benefit from valU’s financing plans and pay for products seamlessly via PayTabs payment gateway, through auctions or fixed-price listings. This will help customers in fulfilling their lifestyle-oriented purchases and improving their shopping experience to be more affordable, sustainable, and accessible. (EGX)
- Yalla Fel Sekka (YFS) announced it has raised 7 million USD in its Series A round. This funding round has been led by DisruptAD, ADQ’s venture platform.
The startup will be using the new funding to expand its presence in cities across Egypt and the Middle East and North Africa (MENA) region. The funding will be also directed towards growing its network of hubs and optimizing productivity, while focusing on enhancing its leadership in machine learning and in developing its innovative operational strategies. With its digital platform and diverse fleet of 1,000 drivers of motorcycles and vans, the company provides businesses in the Egyptian urban communities with only instant reliable and affordable delivery service. (Arab Finance)
- Marseilia Almasreia Alkhalegeya for Holding Investment (MAAL) has signed a partnership agreement to develop a 205-acre land plot in the west of the North Coast. The investment cost of the project amounts to around 6.5 billion EGP.
Under the agreement, Marseilia will act as the real estate developer of the entire project spanning 861,000 square meters, with a 60% built-up area. The company aims at developing the project within a four-year period as per the conditions set by the New Urban Communities Authority (NUCA). The project is expected to generate sales revenue of up to EGP 13 billion, with Marseilia’s share representing not less than 65% of total revenue. (EGX)
- Swvl Holdings Corp, an Egyptian ride-hailing startup based in Dubai, is getting ready to list 35% of its shares on the Nasdaq Stock Market after merging with Queen's Gambit Growth Capital in February or March,
according to swvl’s Chief Financial Officer (CFO) Youssef Salem. The initial public offering (IPO) is expected to take place in the first quarter (Q1) of 2022, Salem remarked. On the other hand, he revealed that Swvl has won the rights of being the official transport of Pakistan’s cricket team Quetta Gladiators. In July 2021, Swvl announced it signed the final deal to merge with Queen’s Gambit Growth Capital in a deal estimated at a value of 1.5 billion USD. (EGX)
- Huawei has been ranked the 6th by Brand Finance Global among the top 10 most valuable brands for 2022. The Chinese tech giant has jumped by 6 places as compared to 2021,
a report by the London-headquartered brand valuation and strategy consultancy Brand Finance Global showed. The report highlighted a 29% year-on-year growth in Huawei’s brand value in 2021, recording 71.2 billion USD. Overall, the tech sector has been proved to be the most valuable industry once again, with a cumulative brand value of up to 1.3 trillion USD in the Brand Finance Global 500 rankings. (Arab Finance)
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