S&P Dow Jones Indices retains Egypt’s emerging-market status
Good morning, everyone. Egypt’s resource economy is front and center today, with money, minerals, and chemicals each moving at their own pace toward the same destination.
The biggest news is that the CBE held rates for a fourth consecutive meeting. The decision was expected — July inflation ticked up for the first time since March, an electricity-price increase is still working through the data, and the CBE’s own forecast sees inflation averaging 16.6% in FY 2026/27 before falling back to target in 2H 2027.
Abu Tartour broke ground. The USD 658 mn phosphoric acid complex in the New Valley governorate has moved from contractor selection to construction. The plan is to finish construction in 30 months and produce 250k tonnes of phosphoric acid every year for export via Safaga. The project has been years in the making, and now we’re seeing progress on the ground.
And in mining: Saudi Gold Refinery has applied directly under its own name for Eastern Desert exploration blocks near Al Baramiya, targeting gold production before 2030. The ambition is notable, but so is the gap between an exploration license and a producing mine.
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EGX keeps its seat
S&P Dow Jones Indices has decided not to downgrade Egypt, confirming the country will keep its Emerging Markets status, according to an EGX statement. The announcement, dated 20 August, closed out a review that started in June, when S&P proposed downgrading Egypt to Frontier Market status, a lower tier with less global investment money tracking it.
Why it matters: Egypt makes up 0.12% of S&P’s Emerging Markets index. But if it had been downgraded, it would have jumped to about 3.4% of the much smaller Frontier index — nearly 29 times as large a share. That kind of jump forces index funds to buy or sell large amounts of Egyptian stocks automatically, regardless of how the companies are actually performing. Dodging the downgrade means Egypt avoids that disruption.
What the EGX says helped: EGX Chairman Omar Radwan told us earlier this month the exchange made its case to S&P by pointing to Egypt’s improving fundamentals, including fewer delays getting foreign money in and out, record foreign currency reserves, and a record daily trading volume of EGP 15.6 bn. The EGX also directly reached out to 17 major index-tracking institutions before the deadline to discuss the review. Recent reforms, like the new derivatives market and the short-selling rules, were also part of the pitch.
IN CONTEXT- The EGX passed another index provider’s test earlier this year when it cleared FTSE Russell’s annual review, retaining its Secondary Emerging Market status and remaining above the minimum company threshold required for inclusion. FTSE had added Egypt to a watchlist for possible demotion back in 2023 amid reports of foreign investors having difficulties repatriating capital.
Speaking of FTSE: Telecom Egypt will move from small-cap to mid-cap in FTSE Russell’s Emerging Markets indices in the September semi-annual review, joining CIB and Talaat Moustafa Group as the third Egyptian company in the benchmark, according to a company statement. The upgrade follows the stock’s rally, which lifted the company’s market capitalization to around USD 3.9 bn, and will take effect on 21 September.
A new Marakez destination
Our friends at Marakez are entering Egypt’s Red Sea coast for the first time, launching SHAMS SOMA with Somabay. The project will reportedly involve a 100-feddan integrated mixed-use tourism site in Somabay, targeting as much as EGP 40 bn in revenue, according to unnamed sources. Marakez, a unit of Saudi Arabia’s Fawaz Alhokair Group, has entered into a revenue-sharing agreement with Somabay.
What to expect: Marakez reportedly aims to develop residential and hotel units and commercial buildings. Sales for the project are scheduled to open before the end of 2026.
Why this matters: The move unites two players already betting on Egypt’s next wave of tourist-destination real estate. For Marakez, the venture marks an expansion beyond Cairo and the North Coast and into the Red Sea’s growing mixed-use tourism market. Somabay has been expanding both its hotel footprint and its residential offerings, with CEO Ibrahim El Missiri previously telling EnterpriseAM that the Red Sea is poised to become the country’s next major property hotspot, supported by its infrastructure and connectivity.
Listing or partner
New Ghazl El Mahalla could have its route to market decided by the end of September, with the government expected to choose between bringing in a strategic investor or pursuing a temporary EGX listing, a government official tells EnterpriseAM. The company is completing its incorporation and listing-related documentation and has begun selecting an external auditor.
REMEMBER- The cabinet greenlit the demerger earlier this month, creating New Ghazl El Mahalla for Spinning and Weaving to take over the active spinning, weaving, garment, and finishing operations, while the legacy company remains on a separate restructuring track. Hashem El Sayed, head of the cabinet’s State-Owned Enterprises Unit, first told us in April that the textile giant could be split into two arms: one housing the upgraded factories for a potential listing or strategic sale, and the other for longer-term restructuring. El Sayed told us in June that separating the upgraded capacity from the legacy burden would make the new company more appealing for investment.
The wider privatization clock is ticking: Egypt is targeting USD 1.5 bn in divestments before its IMF program wraps in December, according to the Fund’s latest review. By July 2026, the government had raised USD 526.3 mn — including USD 420 mn from Gabal El Zeit and USD 106.3 mn from sales of Finance Ministry-held stakes — with the proceeds directed toward reducing public debt.
High-speed rails, going local
The Transport Ministry reportedly plans to launch local tenders by the end of the year for EUR 1.3 bn (c. EGP 74.8 bn) worth of equipment and systems for its high-speed electric rail network, with deliveries set to take place over the following two years, according to unnamed government officials.
The details: The government is targeting first contracts with local industrial companies in 1H 2027 for lines 2 (6th of October-Abu Simbel) and 3 (Qena-Hurghada-Safaga). Supplies — including rails, sleepers, switches, and technical track systems — will be paid for in EGP and delivered in batches according to the execution schedule. Awarded suppliers will provide materials to the contractors executing the works, while Arab Contractors and Orascom Construction will oversee installation.
Where does the project stand? Aggregate implementation across both lines has reached around 47%, up from 22% reported by the National Authority for Tunnels in 2024. Combined, the two lines are planned to operate 26 high-speed trains at 250 km/h, 60 regional trains at 160 km/h, and 27 freight trains at 120 km/h. Line 1, the 660-km Ain Sokhna-Alexandria-New Alamein-Marsa Matrouh route, was 67% complete as of September 2025 and is expected to begin a six-month trial operation in September 2026 following repeated timetable revisions.
The road to CEPA
Egypt and Qatar will begin negotiations in October on a Comprehensive Economic Partnership Agreement (CEPA), according to a Foreign Ministry statement. At the seventh meeting of the Egypt-Qatar Joint Higher Committee in New Alamein, the two sides also discussed establishing a joint economic, trade, and investment committee, as well as potential Qatari participation in African investment prospects alongside Egyptian companies and the Sovereign Fund of Egypt.
IN CONTEXT- Egypt-Qatar trade rose 10% to USD 72.4 mn in the first five months of 2026 compared to the same period last year. The planned talks follow the launch of the first phase of Qatari Diar’s Alam El Roum development on Egypt’s North Coast earlier this month. The first phase is expected to involve up to EGP 220 bn in investment across 4 mn sqm, while the wider project is expected to attract USD 29.7 bn and has initial deliveries targeted for 2030.
ALSO- Egypt’s Central Auditing Organization and Qatar’s State Audit Bureau signed an MoU covering training, reciprocal visits, knowledge exchange, IT auditing, and the development of methodologies for performance, project, and contract oversight.
Data point
USD 47.3 bn — that was the total Egyptians working abroad sent home in FY 2025/26, a record figure that was up 29.6% from USD 36.5 bn a year earlier, according to the Central Bank of Egypt. June remittances alone rose 15.6% y-o-y to USD 4.2 bn, from USD 3.6 bn in June 2025.
IN CONTEXT- The milestone crowns a sustained recovery in formal remittance inflows following the March 2024 currency float: transfers had already reached USD 43.1 bn in the first 11 months of the FY, while we reported record calendar-year inflows of USD 41.5 bn in 2025.
Destination Sahel Issue IV, the final issue in the series, drops this week, and we’re exploring how the North Coast could be more than a summer story.
Living in Sahel year-round is moving from a seasonal idea to a serious question; an industrial push is reshaping the Coast’s economic base, and Egyptian homebuyers are weighing Sahel against Dubai, London, and other Mediterranean markets for where to put their money.
In this issue, we get into what it would take for Sahel to work beyond the summer, how industry fits into the Coast’s next chapter, and the numbers behind the Sahel-vs-everywhere debate.
Coming straight to your inbox on Wednesday, 26 August.
PSA-
WEATHER- Heat is picking up in Cairo today, with a high of 35°C and a low of 25°C, according to our favorite weather app.
It’s a couple of degrees cooler in Alexandria, with a high of 33°C and a low of 23°C.
The big story abroad
Iran has condemned planned US sanctions as the regional war drags on with no clear path to peace. Iranian Foreign Ministry spokesperson Esmaeil Baghaei has called the move by the US an “assertion of extraterritorial sovereignty over every independent member state of the UN.” Tehran plans to target the interests of nations aligned with the US’ policy of economic pressure, the secretary of Iran’s Supreme National Security Council Mohsen Rezaei reportedly said.
What is Washington planning? US Treasury Secretary Scott Bessent is due to speak at a press conference tomorrow, after Washington threatened “the toughest sanctions in history” on the Islamic Republic.
Meanwhile, trade tensions between the US and Canada are rising. Washington hit Canadian goods with a 50% tariff over the weekend, after the two sides failed to secure a trade agreement. The levies target USD 20 bn worth of goods, accounting for roughly 5% of Canada’s total exports to the US. Ottawa fired back by announcing tariffs on US steel, electronics, and other products, penciled in for 8 September.
The cost of memory is up: Soaring memory chip costs are driving up the price of servers equipped with Nvidia AI processors by more than 15% for several major clients. The price increases will apply to systems shipping early next year, affecting configurations powered by flagship processors like Vera Rubin and Grace Blackwell.
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