AM — FRA doesn’t love stonks. Plus: Abu Qir and Ghazl El Mahalla FC are going ahead with offerings, Omicron or not.

Good morning, friends. From how to learn to manage a hospital though to two nice investment stories, the latest on our transition to EVs, and the FRA’s newfound concern about stonks going to the moon, there’s something for everyone on this brisk-but-not-over-taxing morning.

THE BIG STORY ABROAD- The death of longtime US senator, three-time presidential candidate and Republican leader Bob Dole at age 98 is all over the foreign press this morning, with the New York Times, Wall Street Journal, Washington Post, Financial Times, Politico, and Reuters all out with obituaries.

Is Russia about to invade Ukraine? That’s the contention of the Biden administration — and a worldview that the Financial Times claims that Nato and the European Union are now getting behind. The US apparently believes that Russia could invade as “early as 2022.”

For our fintech (and IB) bros: Meet the top investment banker in the US fintech arena, one Steve McLaughlin, who has been hammering away in the industry since 2002, when he left Goldman Sachs to create Financial Technology Partners, which is on track to make USD 600 mn today despite appearing to have built its website 20 years ago and just left it to sit ever since. The Wall Street Journal has a profile.

HAPPENING TODAY-

The Central Bank of Egypt will issue USD 1 bn of one-year USD-denominated treasury bills today in an auction that will wrap tomorrow, it said Thursday. Egypt has sold some USD 5.1 bn of USD-denominated debt so far in 2021 across five issuances.

Foreign Minister Sameh Shoukry is in Senegal for a two-day visit to attend the Dakar International Forum on Peace and Security, which will focus on the African continent’s post-covid-19 future, according to a ministry statement.

HAPPENING TOMORROW-

Aldar / ADQ MTO subscription window wraps up tomorrow: SODIC shareholders have until the end of trading tomorrow to respond to the mandatory tender offer submitted by the UAE’s Aldar Properties and Abu Dhabi sovereign wealth fund ADQ.

THIS WEEK-

Cairo plays host to a spate of year-end conferences:

• The two-day North Africa Trade Finance Summit starts tomorrow, bringing together business leaders, people from the financial industry, logistics experts and policymakers to discuss trade finance.
• Global Forum for Higher Education and Scientific Research runs Wednesday through to Friday at the St. Regis Al Masa Convention Center.
• The Cairo Woodshow kicks off on Thursday at the Cairo International Convention Center.

MORNING MUST READ-

Cyberspace is the new frontier for the global arms race — and can be the gateway for serious global disasters, veteran cybersecurity reporter Nicole Perlroth writes in This Is How They Tell Me the World Ends, which was named the Financial Times and McKinsey Business Book of the Year for 2021. The book details how small and seemingly inconsequential holes in companies’ tech infrastructure can give hackers the space to get “a digital toe in the door” and do anything from steal personal data to launch attacks against national governments “We are in for some calamitous, cyber-induced event that will take us all down or we will be where we are now, which is death by a thousand cuts” unless significant changes are made, Perlroth says, according to the Financial Times.

CIRCLE YOUR CALENDAR-

News triggers to keep your eye on:

• Foreign reserves: November’s foreign reserves figures will be released this week.
• Inflation: Inflation figures for November will be released this Thursday, 9 December. Data for inflation typically appears on the 10th of every month, but is moved up one day if that falls on a Friday.
• Interest rates: The Central Bank of Egypt’s Monetary Policy Committee will hold its final meeting for the year to review interest rates on Thursday, 16 December.

Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.

*** 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. Blackboard appears every Monday in Enterprise in the place of our traditional industry news roundups.

In today’s issue: As new trends and digitization take hold in the healthcare industry, private sector hospitals and facilities find a growing need for dedicated managerial-level staff to chart new waters with an eye on the big picture for the industry. Healthcare management — a still nascent academic major in Egypt — attempts to prepare more healthcare professionals for that role. Today, we explore how far these programs have come in Egypt, where they are offered, and what their impact is on the sector as a whole.

Egypt’s non-oil business activity shrank “moderately” during November, with a closely followed gauge of business conditions unchanged from the month prior as supply chain bottlenecks and inflationary pressures continued to weigh on private sector firms. The IHS Markit Purchasing Managers’ Index (PMI) (pdf) remained at 48.7 last month, marking the twelfth consecutive month it has been below the 50.0 mark that separates expansion from contraction.

Inflationary pressures and global supply chain shortages were mostly to blame, with new business falling at the quickest pace in six months. Output fell for the third month in a row, as output price inflation rose at the second-fastest pace since mid-2018, providing a challenging outlook for future prices. Inflation has inched up in recent months, reaching a 20-month high in September, and although the headline rate fell back slightly in October food and fuel price growth remained elevated.

Higher costs, mixed demand signals: The cost of shipping, energy and raw materials continued to rise sharply, leading to more expensive end-products. Input cost inflation was at its second fastest in over three years. “Higher selling prices deterred client spending in the domestic economy,” said David Owen, IHS Markit economist. New order volumes fell at their fastest rate since May, but export volumes rose for the first time since August.

Vendor performance went into reverse for the first time since June due to global supply chain disruptions. Meanwhile, a slowdown in sales prompted companies to tone down their purchases, further depleting their stock inventories.

Employment fell back after rising steadily for the past four months. Decreased demand has led to reduced workloads, so employers are opting to cut expenses by keeping vacant job positions open. As a result, backlogs of work piled up at the fastest rate since November 2020.

Motive to decrease overheads: Salary costs are on the rise for the third month running, as companies raise wages to keep up with rising living expenses.

Expectations for future output are now at their lowest level in a year, with Egyptian firms expecting higher inflation to suppress improvement in activity over the upcoming year. Reuters also had the story.

ELSEWHERE IN THE REGION- Saudi Arabia’s non-oil private sector expanded at one of its quickest paces since the pandemic in November, and although the rate of expansion dipped slightly from the previous month, businesses continued to see “strong demand” and “modest” price increases, according to its PMI (pdf).

** ICYMI- We featured the brains behind Egypt’s PMI indicator — IHS Markit economist David Owen — in last week’s My Morning Routine column. Check it out here.

The spread of the Omicron variant will not delay or otherwise affect Abu Qir Fertilizers’ plans to sell 10-15% of the company in a secondary offering this month, Emad El Din Mostafa, head of Chemical Industries Holding Company, told Enterprise yesterday. The virtual roadshow drumming up interest from potential institutional investors recently kicked off and the transaction is still on track to close in around two weeks’ time. Mostafa downplayed the impact of the variant-induced market jitters on Abu Qir’s planned stake sale, saying that investor sentiment remains intact and “whoever has appetite for the sale will still buy.”

No quotas set for institutional or retail portions: Any investor — whether institutional or retail — can place their bids for shares during the bookbuilding process, which will take place online, with no quotas reserved for either type of investor, Mostafa said. The offer price will be ±10% of the average share price during the 90 days prior to the sale, Mostafa previously told us.

Background: Abu Qir has pushed back the secondary stake sale several times since first announcing it in 2018, with the state’s privatization program suffering delays thanks largely to global market turmoil and then the pandemic.

Advisors: CI Capital and NI Capital are co-lead managers on the offering.

Ghazl El Mahalla FC’s micro-IPO is also two weeks away: State-owned football club Ghazl El Mahalla will make its EGX debut within two weeks, becoming the first publicly-traded Egyptian football club, Public Enterprises Minister Hisham Tawfik told CNBC Arabia (watch, runtime: 1:44).

The club expects to raise EGP 135 mn from the sale, which will see it list up to two-thirds of its shares on the bourse. Bookrunner Prime Holding will allocate shares worth EGP 37 mn to institutional investors, while the remaining EGP 98 mn will be earmarked for retail investors.

Watch this space: Ghazl El Mahalla FC’s offering is tiny, but it could pave the way for football giant Al Ahly to list as much as 49% of the club.

e-Finance’s success on the EGX has re-energized the state privatization program. The state-owned digital payments firm concluded one of the EGX’s biggest IPOs in years in October, raising some USD 370 mn in a sale that saw heavy demand from foreign and local investors alike.

The UAE’s Chimera bought 25% of Sawiris’ Gemini Global Development in a USD 100 mn transaction? Abu Dhabi-based investment firm Chimera Investment completed an acquisition of a 25% stake in Sawiris family-owned  firm Gemini Global Development Egypt, multiple sources with first-hand knowledge of the transaction confirmed to Enterprise. Look for more information later today. Chimera is acquiring the shares via a USD 100 mn capital increase, which brings the total capital of Gemini Global Development Egypt — which owns 100% of Ora Developers Egypt — to USD 400 mn, according to Al Shorouk, which first reported on the story.

Who’s who: Chimera Capital (which owns Chimera Investments), a subsidiary of Abu Dhabi’s Royal Group, is a significant backer of Nasdaq-bound transportation play Swvl and has just recently wrapped up the second close of its first-ever venture capital fund, which will see it invest in 12-15 startups across the Middle East and Southeast Asia. Chimera is run by CEO Seif Fikry (LinkedIn) an Egyptian veteran of the regional capital markets scene and founder of the region’s first UCITS-compliant exchange-traded fund. Royal Group has investments in some 60 entities with 20k employees spanning real estate to FMCG by way of healthcare and aviation. Gemini Global Development Egypt is a separate entity to Gemini Holdings, the Sawiris family’s private equity arm, invests in everything from real estate to private equity , sources at the company tell us.

IN OTHER M&A NEWS-

Arm of EGX-listed B Investments snaps up 51% of Egyptian IVF: B Healthcare Investments, B Investments’ newly-established specialized healthcare company, has acquired a 51% stake in the Egyptian IVF Center, according to a company statement (pdf). The transaction — the value of which was not disclosed — is pending regulatory approval, the statement notes. Private equity firm BPE Partners — which manages B Investments — had been eyeing the majority stake in Egyptian in-vitro fertilization sector since last year.

BACKGROUND- B Healthcare Investments is screening the market for other potential ventures, but started with Egyptian IVF Center, the first specialized facility to offer fertility treatment in Egypt. The transaction comes after investor relations and private equity veteran Sherif El Ghamrawi was named CEO of the company this past February.

CLARRIFICATION ON 6 DECEMBER

Abu Dhabi’s Chimera Investments had acquired a stake in the Sawriris-owned Gemini Global Development Egypt (which owns 100% of Ora Developers) and not Gemini Holdings as was noted in an Al Shorouk article last night, which we picked up this morning. The latter is a separate entity owned by the Sawiris family.

El Nasr’s EV speed dating pool is down to three Chinese partners: State-owned El Nasr Automotive will begin meeting today with three Chinese companies it has shortlisted as its potential partner on locally assembling electric vehicles, Public Enterprises Minister Hisham Tawfik told CNBC Arabia (watch, runtime: 1:44). The ministry has also contracted a German consultant specialized in EV design, Tawfik said, according to Al Mal.

Learning from its Dongfeng mistakes: El Nasr has narrowed down the list from 13 proposals that originally also included European auto manufacturers and will begin the negotiations having already set its rules of engagement, the minister said. The company plans to settle on one of them to replace China’s Dongfeng and sign the contract by the end of the month. Plans for El Nasr Automotive to link up with Chinese auto giant Dongfeng to locally assemble EVs fell through last month when the state-owned firm exited talks after being unable to negotiate a lower price point for imported components.

What we know about the car: El Nasr will only assemble a single “reasonably priced” EV model, which will cater to the Egyptian consumers’ needs, Tawfik said. The government will invest at least EGP 450 mn to roll out the infrastructure required to make EVs viable on Egyptian roads. Industry leader Infinity is aiming to install 3k charging stations across the country over the next three years as it works with the government on the program.

The private sector also has plans to rollout EVs: Al Mansour Automotive and General Motors said they could team up to produce EVs in Egypt with plans to present a study to the government within 2-3 months.

Sending Egyptian stonks to the moon is about to get harder: Investors could face criminal charges for sharing share tips on social media under proposed amendments to the Capital Markets Act put forward by the Financial Regulatory Authority (FRA) yesterday. Fines and prison sentences of between three and 10 years would be handed out to people found guilty of breaking the rules, the regulator said in a statement yesterday.

Preempting r/egxbets: The rules are designed to crack down on social media groups where people share advice and recommendations on stock trading, which FRA boss Mohamed Omran accused of being forums for market manipulation.

We’re not 100% sure right now where the line would be: The statement says that the rules would be aimed at people who share false or misleading information with the intent to manipulate retail investors while also declaring that anyone without a license is banned from making recommendations, factual or otherwise.

But the FRA makes clear that so-called meme stocks are motivating its thinking, making direct reference to the infamous Gamestop short squeeze this past January, which saw a group of small-time investors collaborate on Reddit to send the ailing retailer’s share price through the roof.

What’s next on the stonks changes? The FRA says the amendments are being sent on to the “relevant authorities” for review.

The FRA also introduced new rules for companies being liquidated: Listed companies undergoing liquidations can only be traded on Sundays and Wednesdays after the FRA amended trading regs. That has the effect of reversing yesterday’s activities in state-owned Egyptian Iron and Steel’s shares seeing as the company is being liquidated, the authority said in a bourse filing (pdf).

The liquidation of Egyptian Iron and Steel: Over the summer the company officially stopped operations as a prelude to its liquidation. The company has appointed accountant and former liquidation advisor for the state-owned Metallurgical Industries Holding Company Mostafa Hassan to wind up the company. The liquidation process is expected to take up to two years.

ALSO IN CAPITAL MARKETS- The EGX will launch four new sub-indices tracking sovereign debt instruments with varying tenors within a few weeks or months, EGX head Mohamed Farid told CNBC Arabia.

Home services marketplace Filkhedma raised an undisclosed amount in a fresh investment round from The Cairo Angels, Wamda reported. “This investment comes just ahead of a significant milestone for the business to be announced very soon,” the Cairo-based angel investment network noted, without providing further details on the milestone or what the investment will be used for.

About the startup: Filkhedma, a startup founded in 2014, connects customers to maintenance service providers, including tradesmen qualified in plumbing, electrical work, carpentry and air conditioner maintenance. This marks the startup’s fourth investment round to date, with earlier rounds raised from Algebra Ventures and Glint, and angel investor KiAngel.

Juhayna has appointed Ahmed El Wakil as its independent non-executive chairman to replace Mohamed El Dogheim following the board of directors’ elections late last month, the company announced in an EGX disclosure (pdf). El Wakil was appointed to the company’s board of directors in January of this year, replacing former chairman and managing director Safwan Sabet following the chairman’s arrest on charges of allegedly joining and funding a terrorist organization in December.

Elsewedy Electric has a new IR director: Noha Agaiby (LinkedIn) has been appointed Elsewedy Electric’s director of investor relations, the company said in a bourse filing (pdf). Agaiby, who will also serve as board secretary, was previously director of IR at Global Telecom, Amer Group and Nile Sugar and held a number of corporate affairs, governance and IR positions at Mobinil (now Orange Egypt). She takes over from Tarek Yehia (LinkedIn), who has joined EK Holding.

SMART POLICY- President Abdel Fattah’s announcement of new directives aimed at better inclusion of individuals with disabilities at an event yesterday was in the limelight on last night’s talk shows. The directives include accounting for the needs of people with disabilities in the infrastructure-focused Decent Life initiative, expanding training of teachers to equip them to teach special needs students, and setting up training programs for people with disabilities to enter the job market. The president also called on his government to set up a dedicated “Differently-Abled Fund” for special needs citizens and draft legislation to allow and regulate donations for the fund.

The president’s directives earned praise and coverage from Kelma Akhira’s Lamees El Hadidi (watch, runtime: 5:28), Ala Mas’ouleety’s Ahmed Moussa (watch, runtime: 6:57), Al Hayah Al Youm’s Lobna Assal (watch, runtime: 4:54), and El Hekaya’s Amr Adib (watch, runtime: 2:23).

A couple of things we’re keeping an eye on this morning:

• Contractors and construction companies will be required to provide ins. coverage for their seasonal workers next year as a law governing ins. in the sector comes into effect in July 2022.
• Another archeological discovery: A Spanish archaeological mission from Barcelona University unearthed two tombs in Upper Egypt dating back to either the El Sawy era or the Saite period, the Tourism Ministry said in a statement.

Booster shots to roll in as of next Saturday: Anyone eligible for a booster shot will be able, as of this coming Saturday, to make an appointment through the Health Ministry’s website to receive the shot, acting Health Minister Khaled Abdel Ghaffar told El Hekaya’s Amr Adib last night (watch, runtime: 14:42). At the outset, booster shots will only be available for senior citizens with chronic medical conditions and to medical staff.

Missed your appointment to get your second vaccine shot? No problem: Anyone who received their first shot of the vaccine and missed their appointment to get the second jab can, as of Thursday, visit the center where they received their first dose and get their second on the spot, Abdel Ghaffar said. As of now, a total of 31 mn individuals are either fully vaccinated or have received one dose of the jab, but around half have taken only one dose. The minister suggested that people are either unaware of the importance of completing the full vaccination or think they’ve missed their chance if they can’t make it on the predetermined day of the second dose.

We received another 600k doses of Johnson & Johnson and AstraZeneca on Saturday and are on track to receive a total of 3.9 mn AstraZeneca jabs by the end of this month, interim health minister Khaled Abdel Ghaffar said yesterday.

The Health Ministry reported 902 new covid-19 infections yesterday, up from 892 the day before. Egypt has now disclosed a total of 363,162 confirmed cases of covid-19. The ministry also reported 45 new deaths, bringing the country’s total death toll to 20,727.

UK tightens travel rules: Starting tomorrow, all travelers heading to the UK will be required to take a PCR test 48 hours before their flight, regardless of their vaccine status, the government announced Saturday.

Russia’s Sputnik jab is now on Saudi Arabia’s list of approved vaccines for tourists entering the kingdom, according to a statement from the Russian Direct Investment Fund.

South Africa is looking at introducing a vaccine mandate as Omicron drives a surge in covid cases, Axios says. President Cyril Ramaphosa has ruled out a return to lockdown and instead said in a televised address that the government is holding “consultations” to make vaccination mandatory for “specific activities and locations.” With 41% of adults now vaccinated, South Africa has one of the highest vaccination rates in Africa but still lags far behind developed countries.

New Moderna vaccines for Omicron could be widely available by 2Q2022, Moderna President Stephen Hoge told ABC News. Although the vaccine itself could be ready and distributed to tens of mns of people by 1Q2022, a “big step change” where hundreds of mns of doses would be available to the public would be unlikely before the second quarter of the year, he said. Hoge’s comments come a week after the pharma giant’s CEO Stéphane Bancel predicted that we’ll be needing new variant-specific vaccines, which he had also suggested would take months to produce at scale.