PM — Egypt v Senegal: The Pharaoh’s bid for Afcon glory will be decided tonight

This question on everyone's lips this afternoon (whisper it): Is it coming home? The Pharaohs could get their hands on the African Cup of Nations trophy for the eighth time tonight when they meet Senegal in the final of Afcon 2021. Egypt has taken home the African championship a record seven times, with our last victory coming in 2010. Senegal has never been crowned Afcon champions, making it to the final match on two separate occasions.

The spirit of ‘06: The last Afcon meeting between the Pharaohs and the Lions of Teranga was in a 2006 semi-final, when Egypt beat them 2-1 score thanks to a legendary goal from Amr Zaki shortly after he swapped in for Ahmed Hossam Mido.

Kick-off: 9pm tonight.

To mark the occasion: Goal.com takes a look at Mido’s “infamous moment of indiscipline” during our last face-off against Senegal.

CORRECTION- We incorrectly stated in this morning’s EnterpriseAM that the last time Egypt reached an Afcon final was in 2010. The Pharaohs of course made it through to the final in 2017, where they lost 2-1 to Cameroon. We have since updated the story on our website.

On the business front: Whoever said that sports and the postal service don’t go together? Egypt Post’s investment arm, Post for Investments (PFI), has acquired 20% of state-owned sports management company Estadat Holding, Youm7 reports. The transaction will see Egypt Post help raise Estadat’s capital to EGP 1 bn, according to a five-year strategy.

HAPPENING NOW-

Foreign Minister Sameh Shoukry is participating in a meeting of African heads of state and government to discuss climate change at the African Union’s two-day summit in Addis Ababa, according to a ministry statement.

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

• The Central Bank of Egypt left interest rates on hold for the tenth consecutive meeting on Thursday, maintaining the overnight deposit rate at 8.25% and the lending rate at 9.25%, while the main operation and discount rates are still at 8.75%.
• Swvl receives funding boost ahead of Nasdaq SPAC merger + Anghami starts trading: The European Bank for Reconstruction and Development (EBRD) and Teklas Ventures, the venture capital arm of auto parts maker Teklas, will invest USD 21.5 mn in a private placement backing Swvl. Meanwhile, Shares in Abu Dhabi-based music streaming platform Anghami rose as much as 82% on its Nasdaq trading debut on Friday following its merger with blank-check company Vistas Media Acquisition Company.
• The government’s fuel pricing committee hiked fuel prices for the fourth time in less than a year in response to rising oil prices, raising prices at the pump by another EGP 0.25 per liter for 95, 92 and 80 octane fuel at its latest meeting.

THE BIG STORY ABROAD- A trio of stories on the front pages of the business press are signposting more market volatility ahead: CNBC thinks that US inflation data out this week could result in more misery for Wall Street, where shares last month suffered their worst January in 13 years ahead of what the market anticipates will be an aggressive tightening cycle by the Federal Reserve. The cost of living in the US is accelerating at a pace not seen since the early 1980s, putting pressure on the Fed to raise rates even faster.

It’s not just the Fed: In it’s summary of interest rate moves across the world in January, Bloomberg is proclaiming that “the end of easy money is upon us.” JPMorgan now expects rates to have risen in countries that account for half of the world’s GDP by April, which Bloomberg suggests is “the biggest tightening of monetary policy since the 1990s.”

And in another sign of deteriorating investor sentiment: The Financial Times reports that investors are rushing to ensure corporate debt ahead of a possible sell-off in the bond markets. Fresh data shows that trades of credit default swaps — derivatives that are used to hedge against default — rose 60% to USD 197 bn in January.

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Inflation figures are due out this Thursday, 10 February. Annual urban inflation rose to 5.9% in December from 5.6% in November. The Central Bank of Egypt expects price stability in the medium term, it said last week following its monetary policy committee meeting. The government’s fuel pricing committee’s decision to raise fuel prices over the weekend is also expected to have a limited impact on inflation, analysts said.

The US will follow just a few hours later, with CPI data set to be released at 3:30pm CLT (8:30am EET). It’s expected that the data will show another jump in inflation figures last month, with the consumer price index expected to rise 7.3% in January after rising to a 40-year record 7% in December, according to Bloomberg.

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FOR TOMORROW-

The deadline to apply for the Fortune Global Women's Mentoring Program is tomorrow. The program, which will take place from 8-28 May, aims to bring emerging women leaders from around the world to the US to meet and learn from the Fortune Most Powerful Women, which includes executives from Accenture, Johnson & Johnson, and Aetna. You can begin your application by signing up here.

???? CIRCLE YOUR CALENDAR-

Trading on Macro Group Pharma’s shares should start “on or around” this Thursday, 10 February, under the stock ticker MCRO.CA. The retail component of the company’s IPO was 6.49x oversubscribed at the close of Thursday’s trading session, and Macro wrapped up its private placement to institutional investors, which was 1.8x oversubscribed, last Wednesday.

☀️ TOMORROW’S WEATHER- We’re looking at a warmer Monday, with plenty of sun bringing tomorrow’s high to 23°C. The evening will see the mercury drop to a low of 9°C.

Private equity firms are growing more interested in Hollywood production companies as they try to get a slice of the USD 115 bn streaming pie, reports the Financial Times. PE giants like Apollo and Blackstone are investing more in these companies as they expect that demand for original content will continue to rise in the years to come. Between the two of them, Apollo and Blackstone have committed near USD 2.8 bn to the production industry, between acquiring movie studios and building a new one to develop original content, with Blackstone investing bns in soundstages as well. Over the past year, companies like Disney and AT&T’s WarnerMedia, among others, have accelerated the shift to streaming, even as subscriber growth slows and the USD 100 bn outlay on content squeezes bottom lines.

This isn’t PE’s first foray into creative industries: Last year, PE firms turned their attention to music in efforts to capitalize on the dominance of streaming services in global music consumption.

Global fund managers tend to be biased towards (or against) investing in their own markets, depending on where they hail from, according to a study on global equity funds from 16 different countries. Fund managers from the UK, Spain, and Germany, are typically overweight on investments in their home countries, while those from the US, France, and Belgium tend to be underweight, Derek Horstmeyer, one of the researchers, writes for the Wall Street Journal. The research, which looks at earnings over the past decade, indicates that the underweight position is king: Fund managers who undervalue their nation’s market have reaped more returns than investors who have overestimated the potential of their national markets.

Is a hybrid work setting undermining employee loyalty? As employees spend fewer hours in the office, their commitment to their employers is under threat of being compromised, suggests this piece in the Financial Times. Prior to the pandemic, flexible work settings proved to be a driving force for loyalty, largely because these were considered a rare exception. However, now that a hybrid work setup that more frequently allows employees to work from home is more common, employers are concerned that the social ties formed in the workplace are being undermined, making employees less invested in their organizations. This, in turn, makes them less attached to their employer, particularly as work has become a “less important” factor in employees’ lives, compared to social ties with friends and family.

???? ON THE TUBE TONIGHT-

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The House: Stop-motion animation has never been this spooky. Taking its cue from Wes Anderson’s Fantastic Mr. Fox and darkening the whimsy, this Netflix mini-anthology series combines surreal storytelling, black humor and painstakingly-detailed stop-motion animation for a visually arresting but unsettling experience. Each of the three 30-minute episodes center around the titular house, telling the stories of the various inhabitants — human, cat and mouse — who choose to make the mysterious building their home. Cue dancing cockroaches. Check out the trailer here (watch, runtime: 2:40).

⚽ Tonight’s (non-Afcon) football:

In LaLiga: Barcelona (5th) and Atlético Madrid (4th) meet at 5:15pm to battle it out for that coveted fourth-place, with just one point separating the two teams. League leaders Real Madrid face Granada at 10pm, while Villareal and Real Betis go head to head at 7:30pm.

In the Bundesliga: Second-placed Borussia Dortmund will be hoping to narrow the nine-point gap separating them from leaders Bayern Munich with a victory against third-placed Leverkusen at 4:30pm.

Serie A: Juventus could leapfrog fourth-placed Atalanta to enter the top four with a victory against Verona at 9:45pm. Juventus is currently ranked fifth in the league, meaning the team is battling to get into the top four spots that qualify for the UEFA Champions League.

In France: Paris Saint Germain and Lille meet at 9:45pm in Ligue 1.

The FIFA Club World Cup continues today, with Saudi Arabia’s Al Hilal SFC and the UAE’s Al Jazira going head to head at 6:30pm today. The team that emerges victorious will qualify for the semi-final, where it will meet Chelsea.

Al Ahly FC is up against Brazil’s Palmeiras in the other semi-final match on Tuesday, after beating Mexico’s Monterrey 1-0 yesterday with a clean shot from Mohamed Hany.

???? EAT THIS TONIGHT-

Plenty Deli has plenty of choices to get your fill of comfort food: Located in the new Arkan extension in Sheikh Zayed, this deli has a range of breakfast options, sandwiches, pizza, and pasta, all made from locally sourced ingredients. Start your morning with a buffalo and pesto sandwich or a slice of their quiche (they have cheesy roast mushroom, cheddar cheese and caramelized onions, smoked salmon and dill, and Mediterranean roast pepper). If you’re feeling hungrier throughout the day, try out one of their pizzas (available from 1pm-2:30 pm on weekdays only), or indulge in a pasta made with their fresh-egg pastas and homemade sauces. Looking to bring out your inner chef? Take home some of their deli products to cook yourself, such as their fresh-egg pasta, homemade bread loves, and range of sauces, spreads, and deli meats.

???? OUT AND ABOUT-

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Pink Floyd cover band Andromida is performing at Agouza’s Cairo Jazz Club tonight at 9pm. Reservations are required.

SOMA Art Gallery is hosting an artist talk at 7pm tonight. Artists Farah Barakat, Yehia Aboelfotoh, and Yomna Nafea will each talk about their artistic styles and backgrounds.

Ubuntu’s exhibition of oriental carpets, The Weaver's Palette II, is still ongoing at the Zamalek art gallery until this Tuesday, 8 February.

???? UNDER THE LAMPLIGHT-

A psychological crime drama set in a Paris apartment: New York Times bestselling author Lucy Foley is out with The Paris Apartment, a whodunnit novel following Jess as she seeks a fresh start by staying with her brother, Ben, in Paris for a while. However, when she arrives at the empty apartment, Jess discovers her brother is missing and what should have been a laid back vacation turns into a personal investigation. The main suspects are the other tenants in Ben’s building, an eclectic bunch Jess labels as: The socialite, the nice guy, the alcoholic, the girl on the verge, and the concierge. The mystery novel will have you eyeing your own neighbors suspiciously.

EARNINGS WATCH- Credit Agricole Egypt (CAE) generated its highest net income in almost two years in 4Q2021, reporting (pdf) a bottom line of EGP 425 mn, up 27% from a year earlier. The bank’s net interest income rose 7% y-o-y to EGP 750 mn during the October-December period. On an annual basis, CAE reported a 17% y-o-y jump in net income to EGP 1.6 bn.

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The EGX30 rose 0.4% at today’s close on turnover of EGP 625 mn (41.9% below the 90-day average). Regional investors were net buyers. The index is down 2.2% YTD.

In the green: Qalaa Holding (+9.5%), Medinet Nasr Housing (+4.6%) and Heliopolis Housing (+3.4%).

In the red: CIRA (-2.8%), Fawry (-1.5%) and Mopco (-1.1%).

Enterprise Explains: Venture debt. Venture capital — where investors provide funding to small businesses with long-term growth potential, in exchange for equity — has become a core component of startup financing. VC is actually a subset of private equity, although the two types of investment differ substantially. And it’s booming, with global VC investment exceeding USD 675 bn in 2021. But venture debt — or, as Bloomberg puts it, VC’s lesser-known “baby cousin” — is also seeing soaring growth.

So what is venture debt, exactly? It’s a kind of loan offered by banks and nonbank lenders that typically combines the traditional features of a loan with some aspects of VC financing. It’s designed specifically for early-stage, high-growth companies that may not yet be in the black, but are performing well and generating strong revenues. It’s not generally available to seed-stage companies, but is “designed for companies that prioritize growth over profitability,” a Silicon Valley Bank explainer notes.

It’s important to understand that venture debt doesn’t replace VC investment. It complements it: “Venture debt really piggybacks on venture capital,” says Alex Baluta, CEO of alternative asset investor Flow Capital. It’s debt that supports the equity and serves as a bridge for high-growth, venture funded companies — to their next funding round, IPO or sale, he adds. Companies without VC investors face significant difficulties in attracting any venture debt, says SVB. “The venture lender wants to follow in the shoes of investors they know and trust, rather than risk lending to a company without venture backing,” it adds.

What’s the big advantage of this kind of financing? It’s non-dilutive: For business founders, venture debt provides growth capital with minimal equity dilution. Founders get relatively fast access to a predetermined amount of capital, without having to give up another big chunk of equity. This can fuel growth, so borrowing companies could achieve a higher valuation before their next VC funding round. Venture debt investors usually have a hands-off approach as well, and generally don’t require board seats, says VC firm Emergence Capital.

Plus, venture debt is more flexible than traditional bank debt. And it’s becoming more and more creative in the types of loans offered, says Baluta. “Some [investors] will do it based on your ad spend; some offer short-term loans, or perpetual loans.” Recurring revenue loans might be provided to companies with a regular, expected income; product-based loans often center around particular technology, which the borrowing company has developed and is trying to sell; and equipment financing is secured by the equipment owned by borrowers, Bloomberg notes.

The size of loans can vary considerably: Industry leader Silicon Valley Bank issues venture debt loans as big as USD 30-40 mn, while Flow Capital — a smaller operation — tends to stick within the USD 1-5 mn range, says Baluta. Loan types and sizes vary significantly based on the scale of the borrowing business, the quality and quantity of equity it’s already raised, and its objective for raising venture debt, notes SVB. The principal amount of debt is often around 30% of the total funds raised in the last round of equity financing, according to an explainer by online platform Corporate Finance Institute.

How are they structured? Venture debt usually incorporates three elements, notes UK-based asset manager BOOST&Co. These are a fee of 1-2% of the approved loan amount, an annual interest rate of 10-12%, and an equity kicker worth 10-20% of the loan. The equity kicker is usually structured as a warrant, giving the lender the right — but no commitment — to purchase a relatively small amount of equity within the borrowing company at a fixed price within a specific period of time. The debt should usually be repaid within three-four years, CFI notes.

The global venture debt market is booming: The market for potential venture debt investments based on VC investments stood at some USD 47 bn, as of March 2021, according to Bloomberg. Total venture debt activity grew to roughly USD 25 bn in 2019 from USD 5 bn in 2010, and the boom in special-purpose acquisition vehicles (SPACs) could speed its growth still further, it added. The largest proportion of venture debt is funneled into tech companies, which borrowed some USD 18 bn in 2020, according to data company Pitchbook.

And in MENA, appetite for the funding mechanism also appears high: Some 80% of investors and startups surveyed by Magnitt and Shuaa for their recently released MENA Venture Debt Sentiment Report (pdf) plan to use venture debt as a funding tool in the near future. 74% of investors had at least one portfolio company that had previously raised venture debt. And some 31% of the startup founders surveyed had raised venture debt to finance their startups. 40 investors were interviewed for the survey — 30% of whom were from the UAE, 20% from KSA, 23% from the rest of MENA, and 27% from other parts of the world. 70 startups were surveyed — 52% in the UAE, 19% from KSA, 9% from Egypt, and 26% from the rest of MENA.