EnterprisePM — It’s a banking heavy day as the National Investment Bank could be shuttered, while Bank ABC kicks off MTO for Blom Bank Egypt.

Good afternoon, ladies and gentlemen, and we’re so happy that today is hump day, as this Thursday is off as it is the Islamic New Year.

THE BIG STORY TODAY- Is state-owned NIB going to be liquidated? It appears that the government could be on its way to close the National Investment Bank (NIB) a move first revealed (and praised) by the IMF in its July 2021 review. The local press appears to have caught on, with the story being front page news in business journals. We’ve known that the government was looking to reform the state-owned investment bank to reduce fiscal risks and had halted its lending and borrowing operations, but this is the first time we’re hearing of an outright move to liquidate the bank.

The bank owns other stakes in several listed companies including Sidi Kerir Petrochemicals, EBE Bank, ADIB, Abu Qir Fertilizers, Misr Fertilizers Production Company, MNHD, Al Ezz Dekheila Steel – Alexandria, Misr Cement Qena, Misr Beni Suef Cement and Egytrans.

We’re currently reaching out to government and NIB officials to get a better understanding of the move, and should have more detailed coverage in tomorrow’s EnterpriseAM, so stay tuned.

Banking news continued to dominate business headlines today, with the sale of Blom Bank Egypt to Bahrain’s Bank ABC getting underway. Shareholders of Blom Bank Egypt will sell a 99.5% stake in the bank to ABC in a mandatory tender offer (MTO) at EGP 22.33 per share, valuing the business at USD 427 mn (EGP 6.7 bn). We cover the transaction in greater detail in the Speed Round below.

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

• World’s biggest wastewater plant gets more financing: Emirates NBD will provide EGP 2 bn in financing for the plant in El Hamam which will be built by a consortium of four construction firms.
• Even more Sahel vibes: Some 1.3k new hotel rooms are expected to be built in the North Coast, Deputy Tourism Minister Ghada Shalaby said without giving a timeframe.
• J&J vaccines land in Egypt: Egypt received its first 260.6k batch of Johnson & Johnson vaccines through the African Union as part of the agreement to supply Egypt with 25 mn doses of the single-shot vaccine.

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HAPPENING NOW- Egypt rolled out the red carpet for arrivals on the first Moscow-Hurghada flight in six years as Russia’s ban on direct flights finally came to an end, according to a cabinet statement. Assistant Tourism Minister Lamia Kamel welcomed the incoming passengers with gifts and travel advice, saying that the tourists’ reactions upon returning home to Russia would be the best promotion for Egypt.

A second flight also landed right before dispatch, bringing 500 more Russian passengers to the Red Sea town, reports Youm7.

Who is operating flights? Today’s tourism group was aboard an Egyptair flight, with the airline planning to operate seven flights from Moscow to Hurghada and Sharm El Sheikh, according to the Associated Press. Meanwhile, the Russian state aviation agency greenlit eight Russian airlines to operate five weekly flights to Hurghada and Sharm el-Sheikh from 43 cities across Russia. However, only Rossiya has so far scheduled flights, with a plane to land in each of Hurghada and Sharm later today.

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Saudi Arabia will allow 2 mn vaccinated pilgrims to perform Umrah per month: The kingdom will gradually begin receiving Umrah pilgrimage requests from countries starting today, with authorities to greenlight pilgrimage from countries it deems safe, according to the Saudi Press Agency. Saudi has increased the capacity per month to 2 mn pilgrims, given that they are fully vaccinated with a jab that is approved in the Gulf country.

THE BIG STORY ABROAD- The UN’s panel on climate change has warned of the devastating consequences of global warming, saying in a landmark report that planetary warming is “unequivocally” caused by human activity and has already caused “irreversible” damage. This summer’s heat waves, wildfires, floods and other extreme weather events are the result of a 1.1°C rise in global temperature from its pre-industrial average, dangerously close to the 1.5°C limit that would trigger cataclysmic, runaway effects, according to scientists behind the Intergovernmental Panel on Climate Change (IPCC) report. Released ahead of November’s COP26 UN climate conference in Glasgow, UN Secretary-General António Guterres said the report must sound the “death knell” for the use of fossil fuels.

You can find the full, near 4,000-page report as well as the 50-page summary for policymakers on the report’s landing page here, or watch the recording of this morning’s press conference (watch, runtime: 1:37:40) announcing the findings.

Picking up the story are: WSJ | AP | Bloomberg | Reuters | BBC | CNBC.

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???? FOR YOUR COMMUTE-

SUPERCYCLE WATCH- Construction (mainly cement) is next up, as global governments invest bns in post-pandemic infrastructure projects, according to the Financial Times, which cites industry insiders. The supercycle is expected to go on for years, with cement one of the main boosters for the demand that could increase 20-30% in the coming years, a cement executive predicted. Also fueling the cement-led supercycle are the movements by many major economies to undertake green projects in efforts to gain footing on climate change goals. However, the supercycle might not match the speed of that of the 2000s, which was driven by rapid growth by China, instead proving more sustainable over a longer period.

Amazon is stepping up delivery services for its competitors in an attempt to gain the upper hand in the e-commerce delivery market, the Financial Times reports. Amazon Multi-Channel Fulfillment (MCF) delivers goods for the likes of Etsy and Walmart, giving the company an even greater understanding of the shopping habits of consumers, on top of its 40% market share. But stock level limits at its facilities have frustrated some sellers, and could limit the company’s ability to grow the service, despite upper management’s plans to expand the capacity for sellers on the website.

Messi’s potential move to PSG now has a price tag: France’s Paris Saint-Germain is offering football icon Lionel Messi an initial two-year contract, with an expected worth of GBP 25 mn a year after tax, reports Sky Sports. The footballer has said that “nothing has been closed” but fans following the ordeal over the past few days know that PSG is an almost sure thing. Barcelona refused to renew Messi after “financial and structural obstacles” made them unable to fulfil the agreed upon contract.

???? ON THE TUBE TONIGHT-

A modern treasure hunt that will get you hooked: Storage Wars on Amazon Prime and Storage Hunters on Netflix both have the same premise: bid on the contents of abandoned storage lockers and sift through for buried treasures. When storage lockers are left without payment or activity for a prolonged period of time, the general public are allowed to bid for it and acquire everything inside as long as they empty it out. It’s a business model that has led to a myriad of reality TV shows or episodes on YouTube with people finding items that are valuable, historic, or sometimes just plain weird. You know what they say; one person’s junk is another person’s treasure and this show is the epitome of that statement. The shows are a light watch that will make you wish that we had a similar system here in Egypt that could land you a quick buck and a ton of fun.

???? OUT AND ABOUT-

You’ve got two more days to visit the Creative Competition Exhibition at Consoleya. The event brings together the winning works of the online competition that asked participants to submit art to raise awareness about "non-organic waste”. The exhibit will run until tomorrow and is open everyday until 10pm.

???? UNDER THE LAMPLIGHT-

Arabic writer Mohamed Kheir has had his first novel translated into English. Titled Slipping and translated by Robin Moger, the book follows journalist Seif who has lost his way as well as Bahr, a former exile, who is on a mission to document all Egypt has to offer. Together the duo explore the intricacies of Egypt on a dreamlike-quest that often loses sight of reality in favor of magic and miracles. Kheir is imaginative in the way he unveils the two main characters, telling their stories through the situations they fall upon in a reflective novel that highlights the shared trauma many Egyptians hold close. Arab News is out with a great review and you can check out the original Arabic version.

☀️ TOMORROW’S WEATHER- No reprieve from 40°C weather just yet for folks in the capital city. Temperatures will drop to 25°C at night, our favorite weather app tells us. Meanwhile, Sahel is seeing daytime highs of 32°C and nighttime lows of 24°C.

Shareholders of Blom Bank Egypt have agreed to sell a 99.5% stake in the bank to Bahrain’s Bank ABC in a mandatory tender offer (MTO), the EGX said in a statement (pdf) this morning. The shareholders sold 298.62 mn of Blom Bank Egypt’s 300 mn shares to the Gulf lender for USD 424.05 mn (EGP 6.67 mn), the statement says.

The transaction values the business at USD 427 mn (EGP 6.7 bn): ABC offered to acquire the local branch of the troubled Lebanese lender for EGP 22.33 per share, a bid that was approved by the Financial Regulatory Authority last month.

Bank ABC will now have 68 branches nationwide, adding Blom’s 41 locations to its existing 27-branch network. The purchase includes Blom Bank Egypt’s physical and non-physical assets, and customer accounts.

Advisors: HSBC Bank Middle East is acting as the financial advisor for Bank ABC. Zulficar & Partners is also acting as the legal advisor to the bidder, while Commercial International Brokerage Company (CIBC) is the broker.

A flurry of bank exits: Following Bank Audi, Blom Bank will be the second Lebanese lender to exit Egypt in response to the economic crisis in its home country that is threatening to engulf the banking sector. Audi reached an agreement to sell its Egypt assets to First Abu Dhabi Bank in January, a month after it offloaded its businesses in Jordan and Iraq.

The government is considering establishing a state-run union for delivery drivers that would provide workers in the industry with some basic workplace benefits, Al Mal reports, citing unnamed sources. The body would seek to bring more legal oversight to a huge and largely unregulated informal industry that employs hundreds of thousands of Egyptians.

Members of the proposed union would be covered by the state’s universal health insurance program amid a rise in delivery bike accidents, according to the sources. The union would also seek to regulate the sale of bikes and scooters between companies and drivers in the absence of any current legal oversight of this market.

Delivery drivers across most of the world aren’t unionized: Gig work of all stripes is infamous worldwide for its poor wages and working conditions, lack of benefits, and denial of workers’ rights and unionization attempts. Workers are often categorized as independent contractors rather than employees, allowing big firms to duck responsibility.

A battle is raging in the US over the rights of gig workers, while Chinese delivery workers also lack basic protections — though the state’s union network has called for that to change amid a government crackdown on big tech companies. Meanwhile, the limited food delivery unions that do exist globally are startup collectives without legal status. And when delivery workers at Foodora managed to unionize in Toronto, the company abruptly exited the Canadian market.

EARNINGS WATCH- Tenth of Ramadan for Pharma Industries and Diagnostic Reagents’ (Rameda) net income rose 60% to EGP 31.5 mn in 2Q2021, up from EGP 19.7 mn in the same period last year, according to the company’s financials (pdf) released this morning. Revenues grew by 30% to EGP 267 mn during the quarter.

Covid drives revenue growth in 2021: “Top-line growth was primarily led by the success of Rameda’s covid-19 related antiviral products, Anviziram and Remdesivir, which collectively generated EGP 80 mn in sales and were among the top 10 products sold in 1H2021,” CEO Amr Morsy said in the company’s earnings release (pdf). Products launched since the beginning of 2020 accounted for 42% of the company’s revenues during the first six months of the year, he said.

Looking ahead: In the second half of 2021, “we aim to further build on and replicate our latest successful acquisition and launch new products that further expand and optimize our portfolio,” Morsy said.

CI Capital’s net income increased more than ninefold in 2Q2021, reaching EGP 9.7 mn from EGP 1 mn last year, according to the company’s financials (pdf). Revenues almost tripled to EGP 1.4 bn from EGP 514 mn in 2Q2020.

Ezz Steel recorded an EGP 1.21 bn profit in 2Q2021 after being in the red last year, according to its consolidated financials (pdf). Al Ezz Dekheila Steel also turned to profit in 2Q2021, with the company reporting (pdf) yesterday an EGP 1.04 bn profit during the quarter, compared to a EGP 1.2 bn loss last year.

MARKET WATCH-

The EGX30 rose 0.6% at today’s close on turnover of EGP 1.8 bn (27.8% above the 90-day average). Local investors were net buyers. The index is down 0.4% YTD.

In the green: Telecom Egypt (+3.5%), Ezz Steel (+2.7%) and Medinet Nasr Housing (+1.5%).

In the red: AMOC (-3.6%), Speed Medical (-2.7%) and MM Group (-2.5%).

Correction: 9 August 2021.

A previous version of this story incorrectly stated that CI Capital reported a EGP 974k profit in 2Q2021, and Ezz Steel recorded a EGP 1.03 bn loss. 

9 August (Monday): Islamic New Year.

9 August (Monday): Russian flights to Sharm El Sheikh, Hurghada resume.

12 August (Thursday): National holiday in observance of the Islamic New Year.

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

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

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.

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.

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.

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.

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.