EnterprisePM — The EGX30 index closed today’s session 1.3% in the green on the back of a strong earnings season.

Good afternoon, ladies and gents — and welcome to the start of another week. We have a fairly packed issue for you to kick off the week, starting with the news that we’re about to receive another USD 282 mn from the Arab Monetary Fund as part of its USD 639 mn loan approved last year to help us follow through on our economic and fiscal reform program.

Tycoon is well on its way to acquiring a 90% stake in Alexandria National Company for Financial Investment (ANFI) after the Abu Dhabi Islamic Bank Egypt agreed to sell its 85% stake in the firm.

We also have news that microlender Tasaheel has become the first company to be awarded a microleasing license from the Financial Regulatory Authority — a move that will open up leasing facilities to smaller businesses that don’t enjoy access to finance provided by conventional non-bank lenders.

STAY TUNED- 2Q unemployment figures dropped this morning — and they’re virtually unchanged from the first quarter. We’ll have the full story for you in tomorrow’s EnterpriseAM.

THE BIG STORY TODAY- It was a good day on the EGX: The EGX30 index closed today’s session 1.3% in the green, leaving the benchmark index up 1.7% since the start of the year. Index heavyweight CIB rose 3% during trading while Speed Medical was the strongest performer, up 4.6%.

A major turnaround, helped by a strong earnings season: “Egyptian stocks, until a few weeks back, were significantly underperforming compared to other regional and global indices,” Naeem Brokerage’s Allen Sandeep wrote in an email picked up by Bloomberg. “What we are seeing right now is the narrowing of that spread amid good incoming 2Q results across the board.”

** CATCH UP QUICK on the top stories from today’s EnterpriseAM:

• IPO Watch: Mass transportation startup Swvl and state-owned Administrative Capital for Urban Development could both go public on the EGX by 2023.
• M&A Watch: The Coca-Cola Hellenic Bottling Company has agreed to purchase almost 95% of Coca-Cola Bottling Company of Egypt for around USD 427 mn.
• More green bonds? Banque Misr could soon be following the likes of CIB and the Finance Ministry by issuing green bonds to investors, according to Vice Chairman Akef El Maghraby.

THE BIG STORY ABROAD- A déjà vu of Saigon: Taliban forces have entered Afghanistan’s capital, Kabul, as key strategic areas in the country continue to topple to the Islamist militant group with alarming speed. Afghan forces appear to have crumbled in the face of the Taliban’s rapid advance, while Western officials and diplomats in the country were equally blindsided. American diplomats were evacuated from the Kabul embassy by helicopter today, just days after US intelligence sources were cited as saying they expected the capital to hold out against an attack for another three months. Meanwhile, options are dwindling for the tens of thousands of Afghans seeking refuge from the Taliban, many of whom fled their homes to Kabul in the past week.

Making headlines regionally is a fuel tank explosion that left at least 20 dead in Lebanon and 79 injured in the northern region of Akkar Lebanon, the Lebanese Red Cross tweeted. The exact reason for the fuel tank blast is still not known, but it happened in an area of illicitly stored fuel that residents had discovered earlier. This comes as the country suffers from severe fuel shortages that would push hospitals to face forced shutdowns. The story is getting digital ink in the global press: FT I Bloomberg I Reuters I the Associated Press.

Egypt has pledged to send medical aid to Lebanon as soon as possible to support the crisis-racked country in combating such a disaster, according to a statement by the Foreign Ministry.

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HAPPENING THIS WEEK-

Japanese foreign minister Toshimitsu Motegi is in town this week as part of a tour that will take him to six countries in the region over the next 10 days, the country’s foreign ministry said. The minister will discuss security issues and the region’s responses to the pandemic. It remains unclear when Motegi will land in Egypt.

IN GLOBAL MARKETS- Delta variant has replaced inflation as the current market boogeyman: So says HSBC, which said last week that the fall in treasury yields suggests that investors are no longer as concerned about rising inflation and are now paying more attention to the spread of the delta covid variant, according to CNBC. Investors have voiced increasing concerns over US inflation, which is currently running at its highest level since mid-2008, but the slow decline in yields since April may be evidence that attention is now returning to covid, the bank’s wealth management unit said on Thursday. Treasury yields tend to rise in response to higher inflation as investors price in the increased likelihood of interest rate hikes.

US consumer confidence just fell the most since the global financial crisis. Bond yields fell last week after a survey showed US consumer confidence having its worst two-week spell since the height of the global financial crisis in October 2008. The University of Michigan’s Consumer Sentiment Index plunged 13.5% during the first two weeks of August in what it described as a “stunning loss of confidence,” causing investors to buy into safer assets such as US treasuries and gold, the FT says.

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???? FOR YOUR COMMUTE-

Clothes made from recycled plastic are now in fashion: From sneakers to swimsuits, recycled plastics are increasingly being used by the likes of Nike and Adidas as a means of sustainably producing fashion wear while recycling harmful waste, The Financial Times reports. And the timing is right, as the price of recycled plastic appears to have fallen to the point where these big name brands will expand their use.

But does this actually help the environment? In some ways, yes. Recycled polyester emits 70% less greenhouse gasses when compared to virgin plastic, according to the NGO Textile Exchange. There’s a catch: Recycled plastics are more likely to release microplastics when washed, thus polluting the water system.

???? ON THE TUBE TONIGHT-

With the int’l football leagues coming back, we thought this week could be all about sports documentaries. That being said, it would only make sense to start with one of football’s greats and someone who has been in the spotlight in the past few weeks… Lionel Messi. The 2014 documentary Messi chronicles the life of the soccer icon, from his youthful small-town feats to his professional triumphs in Spain and Argentina. Through interviews, re-enactments, and on-the-field footage, the story of Messi’s rise to stardom unravels itself. If you’d prefer a shorter take on the footballer’s career, The Story of the GOAT- Lionel Messi is available on YouTube as a compilation of Messi’s greatest moments on the field. Meanwhile, many of you might be opposed, but Barca Dreams on Netflix could be worth a watch before it is removed from the platform on 31 August.

⚽ It’s the last day of the first Premier League gameweek. Finishing off the week are Newcastle versus West Ham who are currently on the field as we head towards dispatch, while Tottenham and Man City will play at 5:30pm.

And it was a typical showing by all the big clubs in week 1, with Manchester United scoring a comfortable 5-1 against Leeds United, Chelsea winning 3-0 against Crystal Palace, and Liverpool doling out the same to Norwich City.

…The usual exception being, of course, Arsenal, whose amateur coach, lack of action in the transfer market, and poor form of its vets saw it take a 2-0 L against newly promoted side Brentford. Some vocal Arsenal fans (including those in Enterprise) have even expressed taking a break from this Premier League season until Mikel Arteta hits coaching puberty or gets sacked.

In other European leagues, a sans-Messi Barcelona side is playing against Real Sociedad today at 8pm in La Liga for their first game of the season. Sevilla and Rayo Vallecano will compete at 10:15.

???? EAT THIS TONIGHT-

Hacienda Red has a new burger joint in town and they call it Big Daddy: Let’s admit it… Sahel sometimes calls for larger-than-average burgers, fries with all the stops, and cheese everywhere. You can blame it on the salty waters making you hungrier than usual. Either way, Big Daddy has you covered. We love their breakfast options such as their bacon egg sandwich, their Italian cheesy egg sandwich, or sriracha egg lovers dish, each with a ton of different cheeses, sauces, and everything else that makes your morning better. For their burgers, you can’t go wrong with their big daddy burger or surf and turf burger (get the matching fries too). Other things worth checking out on the menu are their Mexican hot dogs and churros. Big Daddy delivers to all of Hacienda as well as Telal and Seashell.

???? OUT AND ABOUT-

Cairo Contemporary Arts Center is holding its beginner’s bellydance class from 8:30-10pm today, at EGP 150 for a single class.

Art Square Academy is running fashion-focused drawing classes from 10am-1pm, every Monday and Wednesday. The 30-hour course costs EGP 3.5k.

???? UNDER THE LAMPLIGHT-

Read up on the league that has us all glued to the TV every week: Football wasn’t always the commercial powerhouse it is now and The Club: How the Premier League Became the Richest, Most Disruptive Business in Sport shows how in the span of 25 years, PL became synonymous with major football in 185 countries. From Russian oligarchs, Arab Sheikhs, Asian Titans to American Tycoons, battle-hardened managers, ruthless agents and Rupert Murdoch’s media empire, several parties put their hands into creating a league that boasts some of the world’s best players and brings in bns easily.

It’s a story of success that quickly fell into the trap of bottomline over integrity. The book written by Jonathan Clegg and Joshua Robinson was released in 2019 (pre the Super League debacle) and foreshadows how local fans are being priced out and clubs' local identities are fading. It’s a great book to understand the business, politics, and love behind Premier League and football as a commodity.

☀️ TOMORROW’S WEATHER- The mercury will finally fall below 40°C: Expect daytime highs of 39°C in the capital city and nighttime lows of 25°C, our favorite weather app tells us. Meanwhile, Sahel is at a nice 32°C during the day.

Egypt has unlocked the second tranche of a USD 639 mn loan from the Arab Monetary Fund (AMF) approved in July 2020 to help the country improve its fiscal position. The regional lender disbursed the second, USD 282 mn payment last week to support the country’s ongoing economic and financial reforms, it said in a statement on Thursday

The loan comes under the AMF’s Structural Adjustment Facility, which allocates money to Arab countries that are carrying out structural reforms or are facing liquidity issues due to the pandemic.

There may be more where that came from: Another loan to Egypt may be approved soon, according to the AMF, which said that procedures for granting the new facility “will be completed shortly.” It is unclear whether the new loan would be disbursed under the Structural Adjustment Facility, with the statement only saying that the money would be used to “support [Egypt’s] financial position.”

Egypt has also turned to the IMF for support through the pandemic: The IMF has lent Egypt another USD 8 bn to help cover a balance of payments shortfall and mitigate the impact of the pandemic on its budget deficit,

The last time the AMF extended a loan to Egypt was back in 2015, when it lent the country some USD 339 mn. Including the most recent facility, the AMF has provided Egypt with a total of 14 loans worth an estimated USD 2.24 bn.

Tycoon to acquire at least 85% of ANFI: Abu Dhabi Islamic Bank Egypt (ADIB) has approved Tycoon Holding’s offer to acquire its stake in Alexandria National Company for Financial Investment (ANFI), the Emirati lender said in an EGX statement (pdf) this morning. ADIB Egypt owns almost 85% of the company, holding 9% directly and the remainder through its KWIN and ADI Lease subsidiaries.

Tycoon is trying to acquire a 90% stake in ANFI: The company launched a mandatory tender offer on 1 August for the company, offering to purchase 4.7 mn shares for EGP 6.25 apiece, valuing the company at EGP 32.7 mn. The MTO, which lasted for 10 working days, closed at the end of today’s trading session, according to an earlier statement (pdf). It remains unclear whether other shareholders have accepted the company’s offer.

The ANFI bidding war: Tycoon beat several other companies bidding for the company, raising its initial offer to exceed Compass Capital’s EGP 6.12 bid, and Zeta investments’ EGP 6 offer. Tycoon joined the race in June, along with other bidders including Kayan Sustainable Development, Zaldi Capital, and a group of investors including Egyptian businessman Ahmed El Saba and Saudi Arabia’s Mostafa El Humeidan.

IN OTHER M&A NEWS-

GB Auto has completed the sale of its 5% indirect stake in its Netherlands-based subsidiary MNT Investments to unnamed foreign funds in a EGP 352.7 mn transaction, the company said in EGX statements (pdfs —here and here). The sale brings its stake in the company down to 57.26%. MNT is the parent company of asset-based lender Mashroey and microfinance player Tasaheel and is majority-owned by GB Auto’s financial services arm GB Capital.

Tasaheel acquires Egypt’s first microleasing license: Micro lender Tasaheel was today granted the first license for microfinance leasing in the Egyptian market by the Financial Regulatory Authority (FRA), a source at the regulator told Enterprise today. This will make the company — which also received the country’s first SME microfinancing license in July — the first in Egypt able to offer leasing products specifically targeted at borrowers who are unable to access conventional facilities offered by non-bank lenders.

The license will pave the way for the launch of Egypt’s first microfinance leasing product, and will help micro-projects access resources for new activities and expansion, the FRA said in a statement (pdf) yesterday, without publicly naming the newly-licensed company.

This latest license was issued following a series of reforms to the laws governing microfinance, FRA chief Mohamed Omran said in the statement. They include a 2018 amendment allowing licensed lenders to engage in microfinance leasing, and a bill ratified last year bringing SMEs under the 2014 Microfinance Act and raising the maximum value of a micro-loan to a single company or project to EGP 200k from EGP 100k.

Who could be next? Microfinance firm Tamweely wants to provide microleasing products to SMEs from the start of next year, and has applied to the FRA for a license. Meanwhile, EFG Hermes-owned microfinance player Tanmeyah could file for an FRA-regulated SME microfinancing license before the year’s end.

EARNINGS WATCH- Ibnsina Pharma saw its net income rise more than 45% to EGP 56.3 mn in 2Q2021, compared to EGP 38.7 mn in the same period last year, according to the company’s earnings release (pdf). The bottom-line growth was fuelled by a 21% rise in revenues, which reached almost EGP 5.4 bn during the quarter from EGP 4.4 bn last year.

During the first six months of the year, Ibnsina saw a 20% y-o-y rise in net income to EGP 106.7 mn from EGP 89 mn a year earlier.

“Ibnsina Pharma is in clear sight of its strategic objectives for the year” thanks to the strength of Egypt’s pharma market, which is rebounding from the shock of the covid pandemic, said co-CEO Omar Abdel Gawad

Looking ahead: Growth during the first six months of the year has set the company on “a path to even stronger growth over the remainder of 2021,” Gawad said. “Heading into 2H2021, we anticipate an increase in Ibsnina’s top-line growth rate which will bring it into line with previous guidance, helped by the company’s ability to leverage economies of scale across its operations.”

Alexandria Medical Services saw its net income rise to EGP 15.4 mn in 2Q2021, from EGP 184.3k in losses in the same period last year, the company reported (pdf). The medical firm’s revenues rose 69% to EGP 67.8 mn in the April-June period, compared with EGP 40.1 mn last year.

Maridive Oil and Services narrowed its losses in the second quarter to USD 12.5 mn, from USD 20.3 mn in 2Q2020, according to the company’s financials (pdf). This came despite revenues falling by almost half to USD 29.5 mn, down from USD 57.6 mn last year.

Abu Dhabi Islamic Bank Egypt (ADIB) saw its bottomline rise to EGP 347.9 mn in 2Q2021, compared to EGP 300.2 mn during the same period last year, according to the company’s financial results (pdf). Net interest income also rose to EGP 842.7 mn in 2Q2021, compared to EGP 765.5 mn last year.

Export Development Bank of Egypt reported a rise in its bottomline to EGP 159.5 mn in 2Q2021, compared to EGP 125.2 mn in 2Q2020, according to the bank’s financial results (pdf). Net interest income increased to EGP 483.3 mn in 2Q2021, compared to EGP 395.5 mn in 2Q2020.

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The EGX30 rose 1.3% at today’s close on turnover of EGP 1.55 bn (14.2% above the 90-day average). Local investors were net sellers. The index is up 1.7% YTD.

In the green: Speed Medical (+4.6%), Egypt Kuwait Holding (+4.4%), and CIB (+3.0%).

In the red: Raya Holding (-2.5%), TMG Holding (-2.4%), and Medinet Nasr Holding (-2.2%).

Is COVAX a solution or adding to the vaccine inequity problem? The Gavi / Covax program sent some 530k doses to Britain in late June, which is more than double the jabs sent to the entire Africa during the same month, despite bns of people in developing countries not yet having their first doses, the Associated Press reports. This comes despite the program reportedly reviewing its initial plan this month and proposing that poorer countries would receive about 75% of covid-19 jabs in the future compared to the previous 50%.

So why is the UK getting so many jabs and this side of the world is struggling for just one dose? It would be difficult to secure doses with some manufacturers without the engagement of rich countries, Gavi noted.

The global vaccine distribution initiative plans to deliver over 2 bn doses by the beginning of 2022, with the “vast majority" of the doses to go to low- and middle-income countries, Gavi said. COVAX had only shipped 210 mn doses —40% of which are donated— as at last month, although the initiative earlier announced securing 640 mn doses —all under agreements— for delivery by July 2021.

Egypt received some 4.3 mn of the 4.5 mn doses allocated to it by Covax. The country got the latest 1.76 mn-dose shipment of the Oxford / AstraZeneca vaccine received last weekend, which is slightly below the 1.9 mn outstanding shots that were expected to be delivered last week.

COVID PSA- A broadcast from planet D’uh: Regularly opening the car windows for 10-second intervals could reduce COVID-19 particle buildup by as much as 97%, according to a Swansea University study reported by the BBC. The study found that the difference in air pressure between the inside and outside of a car could eject most virulent particules, thus keeping the passengers safe.

But that doesn’t mean we’re exempt from mask-wearing: The researchers also discovered that COVID-19 particle emissions fall by 90% and its intake decreases by 70% for people wearing a face covering.

26-28 August (Thursday-Saturday): Jackson Hole Economic Symposium.

September: Delegation of Russian companies to visit Russian Industrial Zone.

1-3 September (Wednesday-Friday): Digi Sign Africa, Cairo International Convention Centre, Cairo, Egypt.

2 September (Thursday): The new EGX mechanism for calculating closing share prices will come into effect.

3-5 September (Friday-Sunday): The World Karate Federation will hold the third competition of the 2021 Karate 1-Premier League in Cairo.

5-7 September (Sunday-Tuesday): The Arab Security Conference, The Nile Ritz-Carlton, Cairo, Egypt.

7-8 September (Tuesday-Wednesday): Euromoney Conferences will host the GlobalCapital Sustainable and Responsible Capital Markets Forum 2021, featuring Vice Minister of Finance Minister Ahmed Kouchouk.

7-9 September (Tuesday-Thursday): Egy Health Expo, Al Manara International Conference, Cairo, Egypt.

9 September (Thursday): DevOpsDays Cairo 2021 is being organized by ITIDA and the Software Engineering Competence Center in cooperation with DXC Technology, IBM Egypt and Orange Labs.

12-15 September (Sunday-Wednesday): Sahara Expo: the 33rd International Agricultural Exhibition for Africa and the Middle East.

15 September (Wednesday): The CFO Leadership & Strategy Summit is taking place in Egypt.

16 September (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

21-22 September (Tuesday-Wednesday): The Federal Reserve meets to review interest rates.

22-25 September (Wednesday-Saturday): Cityscape Egypt, Egypt International Exhibition Center, Cairo, Egypt.

30 September-2 October (Thursday-Saturday): Egypt Projects 2021 expo, Egypt International Exhibition Center, Cairo, Egypt.

30 September-8 October (Thursday-Friday): The Cairo International Fair, Cairo International Conference Center, Cairo, Egypt.

30 September: Closing of 2021’s first oil and gas tender in the Gulf of Suez, Western Desert, and the Mediterranean.

October: New legislative session begins.

1 October (Friday): Businesses importing goods at seaports will need to file shipping documents and cargo data digitally to the Advance Cargo Information (ACI) system.

1 October (Friday): Expo 2020 Dubai opens.

1 October (Friday): State-owned companies and government service bodies selling goods and services to customers that have not yet signed on to the e-invoicing platform will suffer a host of penalties, including removal from large taxpayer classification, losing access to government services and business, and losing subsidies.

6 October (Wednesday): Armed Forces Day.

7 October (Thursday): National holiday in observance of Armed Forces Day.

11-17 October (Monday-Sunday): IMF + World Bank Annual Meetings.

12-14 October (Tuesday-Thursday): Mediterranean Offshore Conference, Alexandria, Egypt.

18 October (Monday): Prophet’s Birthday.

21 October (Thursday): National holiday in observance of the Prophet’s Birthday.

24-28 October (Sunday-Thursday) Cairo Water Week, Cairo, Egypt.

27-28 October (Wednesday-Thursday) Intelligent Cities Exhibition & Conference, Royal Maxim Palace Kempinski, Cairo, Egypt.

28 October (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

30 October – 4 November (Saturday-Thursday): The first edition of Race The Legends, Egypt.

31 October – 12 November (Sunday-Friday): The 26th UN Climate Change Conference, Glasgow, UK.

November: The French-Egyptian Business Forum is set to take place in the Suez Canal Economic Zone.

November: Egypt will host another round of talks to reach a potential Egyptian-Eurasian trade agreement, which can significantly contribute to increasing the volume of Egyptian exports to the Russia-led bloc that includes Armenia, Belarus, Kazakhstan and Kyrgyzstan.

1-3 November (Monday-Wednesday): Egypt Energy exhibition on power and renewable energy, Egypt International Exhibition Center, Cairo, Egypt.

2-3 November (Tuesday-Wednesday): The Federal Reserve meets to review interest rates.

1-12 November (Monday-Friday): 2021 United Nations Climate Change Conference (COP26), Glasgow, United Kingdom.

29 November-2 December (Monday-Thursday): Egypt Defense Expo.

7-8 December (Tuesday-Wednesday): North Africa Trade Finance Summit.

12-14 December (Sunday-Tuesday): Food Africa Cairo trade exhibition, Egypt International Exhibition Center, Cairo, Egypt.

13-17 December: United Nations Convention against Corruption, Sharm El Sheikh, Egypt.

14-19 December (Tuesday-Sunday): The Cairo International Festival for Experimental Theater.

14-15 December (Tuesday-Wednesday): The Federal Reserve meets to review interest rates.

16 December (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

14-16 February 2022 (Monday-Wednesday): Egypt Petroleum Show, Egypt International Exhibition Center, New Cairo, Egypt.

1H2022: The World Economic Forum annual meeting, location TBD.

May 2022: Investment in Logistics Conference, Cairo, Egypt.

27 June-3 July 2022 (Monday-Sunday): World University Squash Championships, New Giza.

**Note to readers: Some national holidays may appear twice above. Since 2020, Egypt has observed most mid-week holidays on Thursdays regardless of the day on which they fall and may also move those days to Sundays. We distinguish below between the actual holiday and its observance.