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Welcome back, friends, we hope you had a restful long weekend.
Our issue this morning packs the business news that made the rounds during our time off.
Madinet Masr, Heliopolis Housing will bring in almost EGP 195 billion from a new joint residential project
The Clap:
EGX-listed real estate developers Madinet Masr and Heliopolis For Housing & Development (HHD) are teaming up on a new residential project spanning 491 feddans in New Heliopolis in eastern Cairo.
What:
The project is expected to add EGP 194.67 billion in revenues over 12 years, Mubasher writes, citing sources familiar with the matter.
The details:
Madinet Masr’s share of the project is estimated at 63.5% and has paid the agreed upon EGP 1.1 billion contract payment.
Remember both companies have had a great Q1:
Madinet Masr recorded EGP 1.17 billion in net profits during Q1 2024, compared to a net income of EGP 304.36 million during the same period last year. Meanwhile, HHD swelled its bottomline to EGP 748.46 million during Q1, compared to a profit of EGP 19.41 million during the same period in 2023.
IMF delays third review of Egypt’s USD 8 billion loan program
The Clap:
The International Monetary Fund (IMF) Communications Director Julie Kozack said the lender will delay the third review of Egypt’s USD 8 bn loan program to 29 July from the initial date scheduled for 10 July in order to finalize some policy details, Reuters reported. The third tranche would unlock another USD 820 million to Egypt’s purse.
The reasoning:
Delaying disbursal comes mainly on the back of regional conflicts amid the Israel-Gaza war and increased attacks by Houthi militants on Red Sea shipping, which has led to a more than 50% YoY decrease in Suez Canal revenues.
Some context:
Expanded from an original USD 3 billion loan agreed on in December 2022 — a package of up to USD 8 billion was approved after the CBE’s 600 bps interest rate hike and another devaluation of the EGP four months ago. Egypt unlocked the second USD 820 million tranche in June.
More to come:
The third review will also allow Egypt to apply for an extra USD 1.2 billion in low-cost, long-term climate funding under the IMF’s Resilience and Sustainability Facility.
The Clap:
Among other objectives the new government is eying over the next three years, Egypt wants private investments to account for 51% of total investments by fiscal year 2026-2027, increasing to 70% by 2030, Enterprise reports.
How to get it done:
The government is planning to streamline the process for investors to establish projects and acquire the permits for their ventures, and will extend incentives to encourage foreign direct investment in industry and other key sectors. Egypt will also allow private sector players to lease vacant properties owned by the Ministry of Public Enterprises.
Other targets:
Industrialization: Egypt wants to achieve a 31.2% annual growth rate in industrial output by 2026-2027 and raise exports to USD 130 billion by 2026-27 and USD 145 billion by 2030. The will establish additional industrial zones, and enhance infrastructure in industrial areas to realize its targets.
Tourism: The government has lowered its tourism target to attracting 25 million tourists per year by 2030, instead of the original aim of bringing in 30 million tourists by 2028.
Employment: The cabinet has set to decrease the unemployment rate to 6.5% by FY 2026-27 — down from the 6.7% rate in the first quarter of the year — and to 6.1% by 2030.
Healthcare: The government plans to increase health insurance coverage to 85% of the population by 2026-2027 and ensure that local pharmaceutical production meets 94% the needs of the local market.
What else is clapping?
Eastern Company announced an increase in the prices of its local cigarette products by 22 to 25 piasters per pack.
UAE renewables developer AMEA Power wants to expand its power local capacity by establishing solar and wind farms with a combined 2.5 GW capacity. The firm is already developing two solar plants totaling 1 GW.
The African Export-Import Bank is mulling offering Egyptian banks and businesses an extra USD 3.2 billion in funding this year, potentially bringing the lender’s financing to local entities in 2024 to USD 5 billion, Asharq Business reported.
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