The Central Bank of Egypt (CBE) hiked interest rates by 100 basis points on Thursday. 

The contraction in Egypt’s non-oil private sector slowed to its softest pace in nearly two years in July, suggesting initial pointers of a recovery in market demand following a lengthy downturn. The country’s PMI rose for a fourth consecutive month to hit 49.2 in July from 49.1 in June.
 
The government, in cooperation with the IFC, is studying offering minority stakes owned by state-owned agencies and banks in firms generating USD-denominated revenues.
 
The Suez Canal Economic Zone (SCZone) has received cabinet’s approval to set up a joint-stock investment company named SCZone Istithmar to strategically plan and manage the authority’s current and future investments.
 
Turkey’s largest state-owned bank and a number of Turkish manufacturers expressed their interest in expanding into the Egyptian market.
 
Russia could lower duties on commodities exports, including grain and fertilizers, to friendly nations.
 
The EBRD is investing EGP927 million (c. EUR27 million) in a securitized local currency bond issued by the New Urban Communities Authority’s (NUCA) special purpose vehicle, Al Taamir Securitization. 
 
SKPC released 2Q23 unaudited financial indicators posting an increase of 32% QoQ (+218% YoY) in net profit to record EGP689 million. Revenues recorded EGP2.9 (-18% QoQ, + 67% YoY). This could be attributed to a 7% QoQ decline in USD denominated polyethylene global prices and a 4% QoQ decline in EGP translated prices during the quarter as there was no currency devaluation during 2Q23 as compared to 1Q23. However, EGP translated polyethylene prices increased by 19% YoY due to EGP devaluation in the beginning of 2023.  SKPC is currently trading at a 2023e PE of 6.8x and an EV/EBITDA of 5.4x.

The government returned the normal natural gas flow to local fertilizer producers. It is noteworthy that the companies’ production was not affected by the recent 20% feedstock cut thanks to the ammonia availability in their inventories. 

ESRS’s (FV: EGP54.60, OW) extraordinary general assembly approved extending a payment guarantee in favor of its subsidiary IRAX (FV: EGP1,357.50, OW) with a maximum amount of USD250 million to finance the voluntary delisting of IRAX. The government, which owns around 32.9% of IRAX, will exit the voluntary delisting process, and that ESRS will not buy any shares. IRAX will buy its shares in a process similar to buying treasury shares.

Egyptian Competition Authority (ECA) agreed to extend its decision to reduce the production of local cement producers (quota allocation) for another year, according to local media.

COMI offered a USD certificate of deposit for a year with a return of 6% to be paid monthly, with a minimum deposit of USD10,000.
 
Banque Misr plans to launch the country’s first digital bank in the first quarter of next year.

The FRA said that premiums for commercial insurance companies amounted to approximately EGP25.2 billion during the first 5 months of 2023 (+35% y/y). Insurance companies operating in the Egyptian market achieved total premiums of approximately EGP28.7 billion by the end of May 2023 (+29% y/y).

Turkish home appliances manufacturer Vestel and conglomerate Zorlu will soon visit Egypt to explore plans to build a home appliances factory with investments of more than USD70 million in an initial phase.
 
KOC Holding wants to establish a factory for automotive feeder industries, a car manufacturing plant, and a medical products plant.
 
Milat Carpet is planning a visit to explore the feasibility of building a furniture factory in Damietta.

 Fine Hygienic Holding plans to increase investments in Egypt to USD185 million next year, up from USD178 million this year.