Today’s Top News & Analysis
House cancels certain banks’ establishment laws to comply with new banking law
Egypt seeks an advisor for selling its stake in ALEXBANK
South Korea to provide Egypt with USD460mn for Cairo Metro trains
No credit line opened with India … yet
Egypt is targeting FDIs of USD12bn in FY24
Egypt and Iraq sign 11 joint MoUs
Production in Egyptian steel factories affected by FX illiquidity
Customs to release drugs’ raw materials by the end of June
Elsewedy Electric to open a new factory in Saudi Arabia
Misr Chemical Industries to establish new company to implement TCCA project
VODE to invest EGP330mn in clean and renewable energy resources
FRA approves JAF’s acquisition offer of AIH’s subsidiaries
Trading on TAQA shares to start within two weeks
Misr Beni Suef Cement to lower its paid-in capital
MACRO
House cancels certain banks’ establishment laws to comply with new banking law
Yesterday, the House of Representatives approved a government proposal to cancel some laws related to the establishment of certain banks in order to unify the regulations and legal framework of the banking sector. The proposal included canceling the laws related to the establishment of aiBank, Export Development Bank of Egypt [EXPA], and the Agricultural Bank of Egypt. Each BoD of these banks will continue with its current formation in carrying out its duties and responsibilities until the end of each of its term. The three banks are required to amend their bylaws within a year from the date of the new law's implementation, and the Central Bank of Egypt is authorized to extend this period for up to two years. We note that all Egyptian banks will eventually have to comply with the new banking law. (Youm7)
Egypt seeks an advisor for selling its stake in ALEXBANK
The Ministry of Finance is currently seeking an investment bank to advise on the initial public offering (IPO) of the ministry's 20% stake in the Bank of Alexandria (ALEXBANK). The remaining 80% is owned by Intesa Sanpaolo Group, the Italian international bank, which was rumored before that it was negotiating to acquire the remaining 20%. However, no official statements were issued discussing the matter. (Economy Plus)
South Korea to provide Egypt with USD460mn for Cairo Metro trains
Egypt’s Ministry of International Cooperation signed a USD460mn financing agreement with the South Korean Embassy for the purchase of 40 train units (320 railcars) for Cairo Metro Lines 2 and 3. The Korean Economic Development Cooperation Fund (an affiliate of the Export-Import Bank of Korea) will provide the funds. (Zawya)
No credit line opened with India … yet
Regarding circulating news of India providing a credit line to Egypt, the Egyptian Minister of Supply said that no credit line had been opened with India yet. Meanwhile, he did reveal that there are ongoing discussions with India, Russia, and China to have Egypt pay for imports using currencies other than the USD. (Reuters)
Egypt is targeting FDIs of USD12bn in FY24
Egypt expects to attract FDIs worth USD12bn in FY24 (20% more than the FY23 target). FDIs reached USD5.7bn in H1 FY23, after it reached USD8.9bn in FY22. (Asharq Business)
Egypt and Iraq sign 11 joint MoUs
Egypt signed 11 MoUs with Iraq to help spur economic development and enhance cooperation. The MoUs cover a variety of different aspects, such as:
· Empowering SMEs.
· Diplomatic training and exchanging expertise.
· Public administration and civil service.
· Tourism.
· Trade (specifically technical cooperation with the aim of joining the World Trade Organization).
· Youth and sports.
· Labor and social affairs.
· Planning and international cooperation.
Furthermore, Egypt expressed its desire to help in the reconstruction of Iraq (estimated to be c.USD88bn). (Cabinet statement, Asharq Business)
Production in Egyptian steel factories affected by FX illiquidity
Several Egyptian steel companies have faced production disruptions due to not being able to import raw materials as a result of FX shortages. Some of the affected companies are:
· El Garhy Steel: production suspended since the beginning of 2023, operational for only 15 days.
· Egyptian Steel: a subsidiary company had to stop production in February and March and two weeks after Eid.
· El Marakby Steel Group: factories operating at 30-40% production capacity.
· Almadina Steel Group: factories operating at 25% production capacity.
· Al Gioshy Steel Group: factories not operating at full production capacity.
· Ayad Group for Steel Manufacturing: monthly production varies depending on the availability of FX. (Asharq Business)
Customs to release drugs’ raw materials by the end of June
Head of the Medicine Division in the Federation of Egyptian Industries (FEI) reported that by end of June, drugs’ raw materials worth USD150mn will be released from customs. (Al-Borsa)
CORPORATE
Elsewedy Electric to open a new factory in Saudi Arabia
Elsewedy Electric [SWDY] expects to inaugurate its new factory in Saudi Arabia within two years. The new factory is part of SWDY's expansion plan in the GCC region and targets the local Saudi market needs. (Asharq Business)
Misr Chemical Industries to establish new company to implement TCCA project
Misr Chemical Industries [MICH] and its majority shareholder the Chemical Industries Holding Co. (CIH) (a 53% stake) have signed a preliminary agreement with two private sector companies to establish a new company to implement the trichloroisocyanuric acid (TCCA) 90% granular project. Ownership of the company will be split between MICH (a 12% stake), CIH (a 12% stake), Concord Engineering & Contracting (a 38% stake), and Cadence Energy & Construction Engineering (a 38% stake), with an authorized capital of EGP1bn and a paid-in capital of c.EGP600mn. (Company disclosure)
VODE to invest EGP330mn in clean and renewable energy resources
Vodafone Egypt [VODE], a Telecom Egypt [ETEL] subsidiary, will invest EGP330mn in clean and renewable energy resources. VODE signed an agreement with the New & Renewable Energy Authority (NREA) to supply it with 260 GW of electricity through NREA’s renewable projects. In addition, VODE plans to fully operate using renewables by 2025. (Zawya)
FRA approves JAF’s acquisition offer of AIH’s subsidiaries
Arabia Investments Holding [AIH] received an email from JAF Investment announcing the Financial Regulatory Authority’s (FRA) approval to the acquisition offer of a stake in two of AIH's subsidiaries. The first is a 30% stake in UE Finance, AIH's leasing arm, for EGP147mn. Where the second is for a 30% stake in Rawaj Consumer Finance for EGP30mn. AIH is yet to appoint an IFA to determine fair values for the two stakes. (Company disclosure)
Trading on TAQA shares to start within two weeks
Chairman of the Egyptian Exchange (EGX) expects trading on shares of TAQA Arabia [TAQA], Qalaa Holding’s [CCAP] subsidiary (a 55.3% stake), to begin within two weeks. He noted that the company is currently completing the necessary procedures with the FRA. (Asharq Business)
Misr Beni Suef Cement to lower its paid-in capital
Misr Beni Suef Cement [MBSC] submitted documents to lower its paid-in capital from EGP750mn to EGP679.3mn by writing off 7mn treasury shares with a par value of EGP10/share. (Company disclosure)
Markets Performance
Key Dates
14-Jun-23
EXPA: Right Issue / Last day for eligibility for subscription in the rights issue.
15-Jun-23
ZMID: OGM / Approving financial statements ending 31 Dec. 2022 and the proposed dividends.
17-Jun-23
MICH: BoD meeting / Follow up on production, sales and exports.
MICH: EGM / Amending Article No. 6 of the company's bylaws for increasing the authorized capital from EGP400mn to EGP1bn.
18-Jun-23
MOIL: OGM / Approving financial statements ending 31 Dec. 2022 and the proposed dividends.
MOIL: EGM / Discussing the continuation of the company.
19-Jun-23
SUGR: Cash dividend / Deadline for eligibility for a dividend of EGP2.550/Share.
EXPA: Capital increase / Capital increase subscription starting date.
EXPA: Right Issue / First day of trading the rights issue.
20-Jun-23
SUGR: Cash dividend / Ex-dividend date for EGP2.550/Share.
22-Jun-23
AREH: OGM / Approving financial statements ending 31 Dec. 2022.
HELI: Cash dividend / Payment date for a dividend of EGP0.10/share (2nd installment).
SUGR: Cash dividend / Payment date for a dividend of EGP2.550/Share.
25-Jun-23
MCQE: EGM / Approving increasing the issued capital & amending Articles No. 6 & 7 of the company's bylaws.
26-Jun-23
BINV: OGM / Approving financial statements ending 31 Mar. 2023 and the proposed dividends.
4-Jul-23
ISPH: OGM / Approving financial statements ending 31 Dec. 2022 and the proposed dividends.
ISPH: EGM / Discussing capital reduction & amending Articles No. 6 & 7 of the company's bylaws.
5-Jul-23
Egypt PMI: June 2023 reading.
6-Jul-23
CCAP: OGM / Approving financial statements ending 31 Dec. 2022.
CCAP: EGM / Discussing the continuation of the company.
BTFH: Capital increase / Capital increase subscription closing date.
9-Jul-23
EGCH: EGM / Approving the final cost of the nitric acid and ammonium nitrate project.