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Sunday, 19 February 2023

THIS MORNING: Investors to wrap up sukuk roadshow tomorrow

Good morning, wonderful people, and happy Sunday. We hope your weekend was relaxing and that you’re looking forward to a productive week.

We’re very happy this morning to welcome Saleh, Barsoum & Abdel Aziz (Grant Thornton) to EnterpriseAM as the sponsor of our popular Also on Our Radar section, which offers an essential roundup of headlines you need to know across a wide range of industries. Saleh, Barsoum & Abdel Aziz was established by three school friends in 1953 and have transformed from a traditional auditor into a full-fledged regional advisory firm. In 2022, the firm partnered with global major Grant Thornton International to expand its services and footprint. Saleh, Barsoum & Abdel Aziz (Grant Thornton)’s practice areas include bespoke advisory, audit, and tax services.

EnterpriseAM remains available without charge to more than 300k readers thanks to the generous financial support of our advertisers, including our friends at Saleh, Barsoum & Abdel Aziz (Grant Thornton).

PSA #1- Did you catch the Enterprise Weekend Edition on Friday? This past weekend’s edition includes our essential three-minute rundown on last week’s big stories, a look at which 2023 model year cars you can actually buy in Egypt right now, and a wonderful rant about the need for us all to pick up after our fur babies.

PSA #2- It doesn’t seem likely you’re going to get access this week to Microsoft’s new Bing AI chatbot-powered search — if only because it seems likely Bing loves you / wants to hurt you / is plotting to divorce you from your spouse. Microsoft admitted over the weekend that long interactions with its Bing chatbot (powered by an advanced version of the large language model behind ChatGPT) can start to go sideways — particularly if you ask Bing nasty questions or otherwise prompt it to talk to you as “Sydney,” its dark alter ego.

Yes, dark alter ego. We’re not joking. Check out:

PSA #3- Does the idea of a life of subservience to our AI overlords have you down? This is the perfect palate cleanser: Ted Lasso is due back on 15 March for season three on Apple TV+ — and there’s growing chatter in the entertainment press that it may not be the last season, after all.

THREE STORIES TO KEEP AN EYE ON-

#1- A decision on our maiden sukuk issuance could come tomorrow: Investment banks are expected to finish three days of calls with investors regarding a potential sukuk issuance by Egypt on Monday, Bloomberg reports, citing unnamed sources it says are familiar with the transaction. The business information service says it understands that the country is planning to sell a benchmark-sized USD-denominated sukuk — usually at least around USD 500 mn — with a three-year tenor. Anonymous sources had told Bloomberg last week that the government was looking to raise up to USD 1.5 bn from the issuance, while Moody’s has rated a potential offering up to USD 5 bn, we noted on Thursday. A final decision about the sale will be made after gauging investor demand.

Who’s working on the issuance: Our friends at HSBC are acting as lead managers and bookrunners along with Citigroup, Credit Agricole, Emirates NBD Capital, First Abu Dhabi Bank and Abu Dhabi Islamic Bank.

Why this is important #1: Egypt has been unable to turn to the international capital market for fresh finance over the past year due to the spillover effects from the war in Ukraine and tightening global financial conditions. A successful sukuk issuance would be Egypt’s first international debt sale since last March, potentially signaling improving investor confidence in the direction of the country’s economy.

Why this is important #2: A successful issuance will help the government meet a major eurobond repayment on Monday. The government is due to repay USD 1.25 bn in five-year eurobonds that mature on 21 February, according to Reuters.

#2- Does Chimera want more of EFG Hermes? Fresh off its investment in EFG Hermes last week, Abu Dhabi-based investment firm Chimera could look to increase its stake, Daily News Egypt reports, citing unnamed sources. Chimera bought 30.5 mn shares (2.62%) for EGP 590.6 mn last week via its newly-acquired local financial services firm Beltone Financial.

Is Chimera eyeing a piece of the privatization program? Beltone is planning to make offers to local NBFS players, including in a state-owned company, the news outlet reports. Among the 32 companies in the state’s privatization pipeline, two are in the NBFS sector: Misr Life Ins. and Misr Ins.

REMEMBER- Chimera is buying big in Egypt: The firm recently invested USD 200 mn in local super-app MNT-Halan, and acquired 45% of NBFS outfit GB Lease in January. Chimera is led by our friend Seif Fikry, an 18-year veteran of EFG Hermes who came up through the ranks on the brokerage side of the business and led the firm in the lower GCC.

#3- ِEgypt and Italy could sign MoUs on a 3-GW interconnector project in June, Al Dostor reported Thursday, citing an Electricity Ministry source. The source said that the two countries are currently in talks to bring a third country into the project to help span the distance between the two countries. The Italian offer includes funding from unnamed Italian and European lenders for the USD 3.5 bn project, the source added.

We first heard of this project last month after Italy reportedly submitted a proposal on the electricity interconnection project between the two countries to the Egyptian Electricity Transmission Company (EETC).

REMEMBER- Italy’s proposal comes as Europe continues a massive reorientation of its energy security policy to eliminate its reliance on Russian natural gas. Egypt has been preparing to link its electricity grids with Greece and Cyprus through a subsea cable as part of the USD 4 bn EuroAfrica Interconnector project since 2018, while two direct Egypt-Greece links — the 3-GW Greece-Egypt Interconnector (GREGY) and the 2-GW Greece–Africa Power Interconnector (GAP) — are both being studied. Our grid is currently linked with Jordan, Palestine, Libya, and most recently Sudan, and will link up with Saudi via a 3-GW interconnection in 2025.

WATCH THIS SPACE- Could Minouche Shafik succeed David Malpass as head of the World Bank? The Egypt-born economist is one of several people being floated by Reuters for the top job at the bank following Malpass’s surprise resignation last week. Shafik, who was recently named president of Columbia University, is being mentioned alongside current WTO head Ngozi Okonjo-Iweala, former USAID administrator Gayle Smith, and former US ambassador to the UN Samantha Power.

HAPPENING TODAY-

The Senate is back in session:

  • Senators will discuss and vote on a bill handing temporary licenses to “informal” industrial projects;
  • The Finance and Economic Affairs Committee will resume discussions of a report by the pro-government Mostaqbal Watan party on the problems the country faces attracting foreign direct investment;
  • The Industry Committee will review the impact of the implementation of the Public Shops Law on SMEs;
  • The Energy Committee will discuss the technical and economic feasibility of developing and upgrading the country’s LNG plants;
  • The Defense and National Security Committee will discuss upgrading the country’s cyber security defenses.

ALSO- Fish farms are on the agenda at the Agriculture Committee, transport infrastructure serving the tourism industry is up for discussion at the Culture Committee, and the Education Committee will discuss unemployment among grads of the nation’s pharma schools.

THE BIG STORY ABROAD-

US-China tensions are everywhere in the global front pages this morning: US Secretary of State Antony Blinken has warned China against supporting Russia’s war in Ukraine and sending more balloons into US airspace during talks with Chinese Foreign Minister Wang Yi in Munich. (AP | Reuters | Bloomberg | FT | Washington Post | NYT | WSJ)

The latest from Turkey-Syria: The death toll from the deadly earthquake that hit Turkey and Syria earlier this month has surpassed 46k, with the tally expected to rise, Reuters reported. Fatalities in Turkey currently stand at 40.6k, while Syria has over 5.8k deaths. A UN official told Associated Press that the full scope of fatalities in Syria may take time to establish, with figures by the UN higher than those announced by the Syrian government.

Another Egyptian victim: The body of an Egyptian woman was found under rubble in Turkey’s Iskenderun, the Foreign Ministry said yesterday.

You can now donate to Syria through the Tahya Misr Fund: The state fund has set up a donations account for Syria. Details on how to donate were outlined in a statement by the fund.

COME TO OUR NEXT ENTERPRISE FORUM-

enterprise

We’re excited to unveil our next C-level event: The Enterprise Exports & FDI Forum, where we will take a deep dive into two of the most critical topics affecting our community.

Exports and foreign direct investment (FDI) have never been more important to our economy — or our businesses — than in the wake of the float of the EGP. We think we have a once-in-a-lifetime chance to build an export-led economy that makes us a magnet for FDI and all the benefits that will come with it for our nation.

CIRCLE YOUR CALENDAR-

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

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

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