Tuesday, 7 September 2021

EnterprisePM — CIB, SODIC to offer 20-year mortgage finance

TL;DR

🔎 WHAT WE’RE TRACKING TONIGHT

Happy hump day, ladies and gents. We hope you (and the kids) are excited that we’re now on the downhill slide into the weekend — and the start of the school year on Sunday.

As one of the smartest guys we know put it earlier this morning: Children are life, but for many of us, the best day of the year is when they go back to school. (And, oddly enough, probably also the first day of their summer vacation.)

As it has been at about this time of year ever since we first started publishing back in 2014, our theme song for this issue is courtesy Green Day (listen / watch, runtime: 7:12 or just skip ahead to the music).

THE BIG STORIES TODAY SO FAR-

#1- CIB and SODIC are offering mortgages with up to 20-year terms to would-be homeowners buying at a SODIC-built development. SODIC clients offering their homes for resale through the company platform will also be able to offer extended payment options to potential buyers. The two companies announced (pdf) the arrangement earlier today.

#2 E-finance’s long awaited IPO could hit the market as soon as next month, unnamed government sources told Al Borsa (pdf). The state-owned e-payments company could offer around 10% for sale, the sources said, though this is subject to change. The government’s IPO committee is expected to meet this month to consider the final stake to be put on offer.

#3- Plastics raw material manufacturer BCI Holding will expand its production facility in Egypt, with finance coming as part of a larger USD 30 mn loan from the International Finance Corporation, the IFC announced in a press release (pdf). The funds will also be used to establish new facilities in Algeria and Nigeria.

^^ We’ll have chapter and verse on all three stories in tomorrow’s edition of EnterpriseAM.

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

  • Egypt has been one of the Middle East’s M&A hotspots so far in 2021: Egypt saw 18 transactions worth USD 1.8 bn during 1H2021, figures published by Baker McKenzie show, making it the most popular country in the region for M&A by value and the second by transaction count.
  • Investors are not yet(?) facing new taxes on stock market transactions: The Finance Ministry yesterday denied that a circular it had published indicated that the long-shelved capital gains tax will come into force next year, saying it was issued in order to clarify pre-existing regulations.
  • New car finance solutions company: Consumer finance provider Contact Financial and Abou Ghaly Motors will join forces to launch a financing solutions company for car purchases — Abou Ghaly Finance — in the coming months. Contact is also looking to launch an e-payments company soon and is hoping to acquire its e-payment license this month.

THE BIG STORY ABROAD- It’s a mixed bag in the global business press this afternoon. The Financial Times is leading with Deutsche Telekom’s run of M&A activity — and with a feature looking at Xi Jinping’s “blueprint for a digital dictatorship.” A very busy first eight months of the year for M&A is the lead piece atop the Wall Street Journal this afternoon, while Bloomberg is running with the notion that “Israel’s Covid surge shows the world what’s coming next.” (Hint: The one-time vaccination front-runner is now a covid hotspot, and so is talking about booster shots.) In the United Kingdom, Boris Johnson is set to hike taxes to help pay the twin bills of “covid and social care crises,” CNBC reports.

THE HOMETOWN ANGLES: Egypt emerged as an M&A hot spot in the first six months of 2021, according to figures from Baker McKenzie we picked up this morning (above). And Egypt could start handing out booster shots to fully vaccinated people as early as the end of this year, according to Health Minister Hala Zayed.

WHAT’S HAPPENING TODAY-

The first week of fall conference season continues in earnest:

The GlobalCapital Sustainable and Responsible Capital Markets Forum 2021 kicked off today and features Vice Minister of Finance Minister Ahmed Kouchouk. The conference wraps up tomorrow.

The three-day Egy Health Expo started today at the Al Manara International Conference Center.

It’s day three of the Arab Labor Conference, which is running through to 12 September at the InterContinental CityStars Hotel in Heliopolis. Government officials, ambassadors, trade union reps and business owners’ association delegates from 21 Arab countries are participating in the gathering.

It’s the final day of the Arab Security Conference, which is taking place at the Nile Ritz-Carlton in Downtown Cairo.

FOR TOMORROW-

The first edition of the Egypt-International Cooperation Forum (ICF) kicks off, bringing together representatives of a number of international development finance organizations for a two day conference.


☀️ TOMORROW’S WEATHER- Look for a daytime high of 38°C tomorrow and Thursday before things start to cool off substantially this weekend, heralding our slow slide into fall weather.

🚙 FOR YOUR COMMUTE

State-backed holding company ADQ plans to list Abu Dhabi Ports on Abu Dhabi’s ADX before the end of the year, the company announced in a statement. ADQ will list a portion of existing shares, it said, without specifying a stake, and will remain the majority shareholder. ADX has recently done well attracting local listings, including Abu Dhabi National Oil Company (ADNOC) which revealed its plans to sell at least 7.5% of its drilling unit’s shares on the exchange. The ADX has been working to appeal to investors and announced last month that it would be cutting trading commissions by half and extending its operating hours by one hour to align with global markets.

ELSEWHERE IN THE REGION- Saudi Arabia’s Public Investment Fund made a USD 484 mn bid to buy a 60% stake in Zain Saudi Arabia’s towers infrastructure, according to a company statement shared on the Saudi Exchange. The sale would be the first of telecom infrastructure in the kingdom and would see Zain sell its passive, physical towers and retain all other wireless communication hardware and software.The company also received two offers from Prince Saud Bin Fahad and Sultan Holding Company for a 10% stake each, which would leave the company with a 20% stake.

Further afield: An military takeover in Guinea could make your favourite electronic gadgets more expensive as it has driven aluminum prices above their decade-high. Political turmoil in the West African nation — the world’s largest supplies of the bauxite essential for the manufacturing of aluminum — threatens to upend the nation’s supply chains, the WSJ reports. News of the coup has pushed three month aluminum forwards contracts on the London Metal Exchange upwards by 1.3% to USD 2.77 k a metric ton, its highest since 2011.

Hyundai plans to be the first automaker to run all its new commercial vehicles on batteries or fuel cells by 2028 — and will be rolling out its hydrogen-based technology by 2040, Bloomberg reports. The South Korean auto-manufacturer is expected to introduce its new hydrogen-based technology to “passenger cars, special vehicles, trains, ships and urban air mobility” in addition to devising environmentally friendly generators and robots as part of its plan to become carbon neutral by 2045.

IN EXTREME COVID NEWS- You could be looking at a five-year jail term if you break quarantine rules in Vietnam: A Vietnamese man was convicted of “spreading dangerous infectious diseases” and sentenced to five years in prison yesterday for breaching quarantine regulations, Reuters reports, citing state-run Vietnam News Agency. The man allegedly infected eight people, one of whom died. Two others have been sentenced to 18 months and two-year suspended jail terms on similar charges. Vietnam’s heavy-handed approach to covid-19 seems to be working as far as the numbers go: Ca Mau, the Vietnamese province where the man was convicted, has reported only 191 cases and two deaths since the beginning of the pandemic.

👌 ENTERPRISE RECOMMENDS

The Karate Kid is the perfect dose of 80s’ nostalgia + Will you be able to read the epic fantasy The Wheel of Time before the show is out?

📺 ON THE TUBE TONIGHT-

(all times CLT)

You can’t mention ‘80s movies without bringing up The Karate Kid. A movie that taught us all about self love before it became a thing, the story follows a teen Daniel LaRusso who gets into trouble with bullies after his mom moves the family to Southern California. Daniel meets Mr. Miyagi, a karate instructor who teaches him all he knows about the sport, and about life in the process. The coming-of-age story that ensues sees Daniel compete in karate tournaments against his bullies — and learn the importance of compassion. The battle against the brutal Cobra Kai is iconic and one for the books. The success of the film turned The Karate Kid into a media franchise that includes a remake that came out in 2010 (featuring none other than Jackie Chan and Jaden Smith) and the Netflix show Cobra Kai, which the streamer picked up off Youtube, where seasons 1 and 2 are still up.

RIP Michael K Williams: Five-time Emmy-nominated actor Michael K Williams was found dead in his apartment last night in New York at the age of 54. The actor shot to fame for his portrayal of Omar Little in the HBO hit series The Wire (arguably one of the best shows ever made) by bringing humanity and depth to one of the coldest characters in TV history. He received further acclaim for his roles in Boardwalk Empire and Lovecraft Country. You can watch the Wire and his incredible performance on OSN’s streaming service here in Egypt.

The European Qualifiers for the World Cup are on tonight: Azerbaijan is playing against Portugal at 6pm, while France is up against Finland, and Netherlands against Turkey, both at 8:45pm.

🍞 EAT THIS TONIGHT-

True to their “Home away from home” slogan, Willow’s boasts a cozy interior that speaks to how great it is as a place to simply hang out with family and friends. The decor of the place, in Sheikh Zayed’s Arkan Plaza, lends an air of elegance as you tuck into their menu. For breakfast, we like their French toast topped with butter and honey. You can also add cheese cream frosting with strawberries or Belgian chocolate sauce, marshmallows, and vanilla ice cream. For dinner, Willow’s menu includes something for everything, from a Napolitan pizzeria to a mighty tomahawk steak and golden fried chicken platters and pastas immersed in mascarpone cheese. Try the Tres Leches drizzled in pistachio sauce for dessert.

🎤 OUT AND ABOUT-

(all times CLT)

ROOM Arts Space and Cafe is hosting the Gypsy Jazz Project today at 9pm, which infuses waltzy, upswing tunes with somewhat ballad-ish music that is influenced by the likes of Django Reinhardt and Stéphane Grappelli.

💡 UNDER THE LAMPLIGHT-

It’s a great time to read the 14 volumes of the epic fantasy The Wheel of Time by Robert Jordan ahead of its Amazon original TV adaptation, scheduled for release on 19 November. These page turners will immerse you in the world of Robert Jordan — which is reminiscent of Tolkien’s Middle Earth — and will keep you wanting more. Oh, and did we mention that there are seven prologues to the saga? The last three books are written by Brandon Sanderson, who was brought on to complete the writing of the final planned volume of the series (calling on Jordan’s extensive notes) after the author’s death in 2007. Sanderson’s writing style doesn't disrupt the series though, but rather builds on Jordan’s captivating world. Think you can’t read some 21 books in about two months? You could opt for the series of graphic novels based on the series, published by renowned comic book writer Chuck Dixon.

🌊 GO WITH THE FLOW

Meet our analyst of the week: Banque Misr’s Yara El Kahky

OUR ANALYST OF THE WEEK- Yara El Kahky, economist and capital markets analyst at Banque Misr’s Market Intelligence Unit (Linkedin).

My name is Yara El Kahky and working in research was always my dream job. I graduated from the German University in Cairo (GUC) with a double bachelor's degree in economics and innovation technology management and then went to get my master’s in international finance at the Berlin School of Economics and Law. At the time, there was an internal debate on whether I should stay abroad or come back home, but I decided that I wanted my future to be in Egypt and I came back in 2015. I started my career as an intern at Naeem Holding under a rotational graduate program and was hired as an equity trader. It wasn’t what I was passionate about, but my dream job was in sight, so I persevered until I joined Naeem’s research department a year later as an assistant economist. I was promoted to an economist in 2019, but left Naeem in 2020 to join Banque Misr in my current role. I’m also currently studying for my PhD from GUC.

My role involves sector strategy, quality assurance, and research. We analyse everything that has to do with the Egyptian economy, from macro indicators to global market mover news that can have an impact locally. We also work with the government on projects with aims such as helping Egyptian banks improve their investment decisions.

I love everything about my job. I can’t do something unless I’m passionate about it. I like the fact that it constantly forces me to read between the lines and pick up on small details that could see big events ensue. I’m always proud when I can come up with a unique statement or forecast and it materializes.

The worst part of my job is that it’s very time consuming. It can sometimes flow into holidays or my social life. However, I knew about this coming into the industry, so it’s all part of doing what I enjoy.

My theory of investment is to know your risk before your return. Even if a stock has potential and a low price, there’s always a risk to consider. Which is why you should only invest spare money that you can leave in the market long-term without needing to withdraw it for personal reasons.

The most important factor I look at to judge the health of the economy is the interest rate. I think from it you can derive the analytical story that links to everything. Of course, you can’t be an economist and not love figures for GDP, exchange rate, and exports/imports.

I think 2022 will be promising, but not quite there yet. There are so many factors that have us drawing up question marks. We’re still waiting to see how the return of Russian tourism will impact the EGX and the global reaction to interest rate hikes by the Fed which might not be positive on our local T-bills and bonds. Then there’s the slated IPOs for next year that could or could not go through, meaning foreign investors haven't yet come back to our stock exchanges. And of course, everything is constrained by the new delta variant of covid-19 and the low vaccination rate. I’m usually quite conservative in my outlook, but I truly believe that it won’t be the year of Egypt until all these question marks are erased and 40-60% of the population is vaccinated.

In my opinion, textiles are an overlooked sector. People are always consuming, even if they’re in debt [laughs] and textiles are a huge part of that. It also provides the possibility of adding more vocational training and jobs to market while lowering the import of clothes. I’m currently also working as a fashion designer and I own the brand YK Concept Designs. Fashion is booming and more people should jump on the bandwagon.

I don’t really watch much TV. Between my job, my fashion brand, and my PhD, I barely see my friends and family. I’m even tempted to cancel my subscription to Netflix so that I’m not tempted [laughs]. But I think that being passionate keeps me going, even if it's overnight and during weekends, what I do brings me a different kind of happiness.

Fashion is kind of related to my job as both involve a lot of research and looking at trends and presentations. It’s more specific, looking at age range and social life, but it has its ups and downs and is also quick to change.

My future plans are to really grow my fashion brand and teach at a university — hopefully GUC since I’m a proud GUCian.


MARKET WATCH-

The EGX30 rose 0.2% at today’s close on turnover of EGP 1.4 bn (7.4% below the 90-day average). Regional investors were net buyers. The index is up 2.3% YTD.

In the green: Speed Medical (+9.8%), Egyptian for Tourism Resorts (+5.7%) and MM Group (+4.6%).

In the red: Credit Agricole (-2.2%), Ezz Steel (-1.5%) and Elsewedy Electric (-1.1%).

CALENDAR

5-12 September (Sunday-Sunday): Arab Labor Conference, the InterContinental CityStars Hotel, Cairo, Egypt.

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.

7-8 September (Tuesday-Wednesday): Egypt, Turkey hold diplomatic talks in Ankara.

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

8-9 September (Wednesday-Thursday): Egypt-International Cooperation Forum (ICF), Cairo

11-12 September (Saturday-Sunday): International Conferences on Economics and Social Sciences, Cairo

12 September (Sunday): International schools begin 2021-2022 academic year

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

14-30 September (Tuesday-Thursday): 76th session of the UN General Assembly, New York.

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.

18 September (Saturday): Expiration of United Nations Investigative Team to Promote Accountability for Crimes Committed by Daesh/ISIL

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.

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

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 — must be held by the first Thursday of October.

October: Romanian President Klaus Iohannis could visit Egypt in mid this month to discuss ways to boost tourism cooperation between the two countries.

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.

9 October (Saturday): Public schools begin 2021-2022 academic year

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.

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.

16-17 November (Tuesday-Wednesday): Africa fintech summit, Cairo.

26 November-5 December (Friday-Sunday): The 43rd Cairo International Film Festival.

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.

22-24 April 2022: World Bank-IMF spring meeting, Washington D.C.

May 2022: Investment in Logistics Conference, Cairo, Egypt

16 June 2022 (Thursday): End of 2021-2022 academic year for public schools

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.

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. © 2021 Enterprise Ventures LLC.