Good morning, wonderful people. We’ve got a packed issue for you today, starting with a shakeup in the nation’s staid banking industry after HSBC Egypt confirmed that it will sell its retail unit to Emirates NBD.
The transaction could make Emirates NBD the nation’s sixth- or seventh-largest retail franchise and comes as the Dubai-based lender pushes aggressively outside the Emirates — it acquired earlier this summer a 60% stake in a big Indian bank.
HSBC Egypt says it’s not going anywhere: The bank is doubling down on its corporate and institutional banking business here, where it’s been a mainstay of the market for more than four decades.
MEANWHILE- Two stories today on opposite ends of the same problem: How to get more capital into the nation’s burgeoning manufacturing sector.
#1- The Madbouly government’s new lease-to-own system for industrial land. The logic is straightforward: make capital available for machinery and production lines instead of tying it up in land before a factory opens. The mechanism might help, but it doesn’t resolve two other issues plaguing the sector: lack of available land and lagging infrastructure.
#2- A CNC manufacturer is the ground-level version of the same goal: CNC machine manufacturer Simplex is raising a new round of financing to triple production capacity as a third facility breaks ground in Tenth of Ramadan. They also have a factory running in Saudi Arabia and contracts for distribution in Jordan, Kuwait, and Syria, a sign of what it looks like for Egyptian industrial manufacturing to scale up.
^^ We have more on all three stories in this morning’s news well, below.
BUT FIRST- Did you feel that earthquake? A 5.6 magnitude earthquake was felt across Egypt earlier this morning. The earthquake originated 38 km north of Suez, according to the National Research Institute of Astronomy and Geophysics.
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ARE YOU MORE OF A LISTENER? Morning Drive is a 10-minute rundown of today’s issue crafted for you to enjoy with your morning coffee, while getting the kids ready for school, or driving through the morning rush. And if you like it, tell your friends to tell their friends. They can find us on Apple, Spotify, or wherever they get their podcasts.
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An emergency gas boost
Gas flows from Israel’s Leviathan and Tamar fields to Egypt rose by 50 mmcf / d to 1.25 bcf / d as of Thursday, hitting the physical ceiling of what the cross-border pipelines can carry, according to an unnamed government official. The emergency increase follows last Wednesday’s drone strike that took the Energos Winter regasification unit offline.
The longer-term picture: A revised gas supply agreement outlines a phased increase in Israeli exports to Egypt, starting with an additional 200 mmcf / d, rising to 400 mmcf / d by January 2027 and 600 mmcf / d by January 2029, according to the official. However, the final phase depends on building a new pipeline and compression station, the official said.
REMEMBER- The government has been steadily stacking up Israeli gas commitments through 2043 to feed the state’s gas hub ambitions. Two Tamar partners signed a non-binding MoU last month for up to 80 bcm of gas between 2031 and 2038, layering on top of an existing USD 35 bn Leviathan agreement through 2040. This all connects to the country’s strategy to be the region’s gas transit and liquefaction hub rather than just burning it at home.
Picking up the fuel bill
The government is weighing two bitter pills to manage its energy bill: reinstate its capped fuel pricing mechanism or freeze prices at the pumps and force heavy industry to cover the difference in market prices. The government will decide by late September whether to return to its automatic fuel pricing mechanism — which limits pump hikes to 10% — or maintain its current “cost-recovery” framework, a government official tells EnterpriseAM. If the government chooses the latter, pump prices will remain frozen, and it will instead hike natural gas tariffs for energy-intensive industries to close the funding gap. The final decision rests on the stability of global oil prices, import volumes, and the EGP exchange rate.
A price increase is unavoidable at current international energy costs, former Egyptian Natural Gas Holding Company head Medhat Youssef tells us. European benchmark gas (TTF) is trading at USD 20.5 per mmBtu, climbing to USD 22 with freight, while diesel sits at USD 1.3k per ton before shipping. Even a maximum 10% hike under automatic pricing would not fully cover the rise in global costs, he argues.
Another option: Youssef proposes temporarily replacing some natural gas consumption with high-sulfur mazut, which he estimates would cost around USD 18 per mmBtu after accounting for additional maintenance and its 20% efficiency disadvantage. The cheaper substitute could help keep domestic petroleum-product prices stable until international markets settle, he says. The government turned to mazut alongside gas earlier this year to maintain power generation during supply disruptions.
IN CONTEXT- The government raised pump prices by up to 17.1% in March under the exceptional cost-recovery system, exceeding the automatic mechanism’s usual ceiling. It then raised natural gas prices for energy-intensive industries by USD 2 per Btu in May and began reviewing a more flexible industrial gas-pricing formula. Prime Minister Mostafa Madbouly said last month that quarterly automatic pricing would return this quarter, but the latest discussions suggest the government could instead hold pump prices and recover more of the gap from industrial users. The decision comes as the fuel import bill rises and the government looks to hedge 65% of its fuel imports against further global price shocks.
The metal tariff stack
The US Commerce Department has finalized anti-dumping duties of 34.2-52.73% and a 23.27% countervailing duty on Egyptian rebar, according to the department’s final determination. Ezz Steel and most Egyptian exporters face the 34.2% dumping margin, while El Marakby Steel and Suez Steel were assigned the higher 52.73% rate.
Those duties sit on top of the separate 50% Section 232 tariff on steel, taking the cumulative burden to 107.47% for Ezz and most exporters and 126% for El Marakby and Suez Steel. Steel is excluded from the new 12.5% tariff applied to most Egyptian goods after Washington’s broader emergency tariff regime was struck down, as it remains covered by the separate Section 232 metals framework.
What’s next: The US International Trade Commission still needs to determine whether Egyptian imports injured or threatened the domestic rebar industry. An affirmative decision would see the duties converted into permanent orders, while a negative ruling would end the anti-dumping and subsidy cases.
IN CONTEXT- Washington launched the two investigations in June 2025 after six US steelmakers alleged that Egyptian rebar was being sold below fair value and benefiting from state support. The preliminary subsidy duty imposed in January had already lifted the total burden to nearly 80% and effectively frozen shipments, with the still-pending dumping case expected to push the tariff wall beyond 100%.
Monday morning kudos
A shoutout is in order for our friends at EFG Hermes, whose securities brokerage division ranked first across five MENA markets in 1H 2026, according to a press release (pdf). EFG Hermes secured the top spot in Egypt, Kuwait, and the UAE, topping the EGX, Boursa Kuwait, Dubai Financial Market, Abu Dhabi Exchange, and Nasdaq Dubai, the company said, citing official market share data. The brokerage also ranked number 10 in Saudi Arabia, with its market share rising to 6.5%.
“Ranking first across five MENA markets in the first half of 2026 is a powerful endorsement of the trust our clients place in EFG Hermes and the strength of the platform we have built across the region. This is not a one-market story; it is the result of years of investment in talent, technology, execution quality, and deep client relationships across our footprint,” EFG Hermes Group Head of Brokerage Ahmed Waly said.
PSA-
WEATHER- It’s another sunny day in Cairo, with a high of 37°C and a low of 25°C, according to our favorite weather app.
It’s a little cooler in Alexandria, with a high of 33°C and a low of 24°C.
The big story abroad
The regional war may be looking at another halt with US-Iran negotiations set to resume today, US President Donald Trump said, without confirming a deadline for an agreement. Trump said he called off a planned strike against Iran, characterizing it as the “biggest attack since World War II.” Iran’s state media reported that Foreign Minister Abbas Araghchi spoke with Saudi and Pakistani officials to coordinate diplomatic efforts.
One of the world’s largest pharma groups may be on the way, as UK-based AstraZeneca conducts talks to merge with US drugmaker Bristol Myers Squibb. The resulting entity would be valued at around USD 400 bn. The companies have discussed a potential tie-up in recent months and could reach an agreement soon, though talks may still be delayed or fall apart.
Apple has put a cap on incoming software bug submissions from researchers after its defense system was swarmed with AI-generated reports that hallucinate non-existent risks. The iPhone maker says it is facing an industry-wide challenge as generative AI tools reshape cybersecurity.
Hollywood has another hit on its hands, as Sony Pictures’ Spider-Man: Brand New Day opened to some USD 927 mn in global box-office revenues, becoming the second-biggest film debut ever. The web-slinger’s latest is well positioned to overtake the year’s other major hits, namely Toy Story 5, The Odyssey, and The Super Mario Galaxy Movie.
*** It’s Blackboard day: We have our weekly look at the business of education in Egypt, from pre-K through the highest reaches of higher ed.
In today’s issue: Egypt’s new Baccalaureate system has all but replaced Thanaweya Amma for next year’s class, but has it actually put a dent in Egypt’s tutoring economy?
