Good afternoon, ladies and gentlemen. After an uncharacteristically busy first week of August, it seems we’re right back down to the summer slowdown with a dearth of news today. That said, capital markets topped headlines in the local press.
But before we dive in, here’s the good news- Central bank, stock market confirm Thursday holiday: The CBE and the EGX this morning followed the cabinet by announcing that staff will take Thursday, 12 August as holiday in observance of the Islamic New Year. Check out their statements (pdfs — here and here).
THE BIG STORY TODAY- Our hot securitization market just keeps getting hotter, with EFG Hermes Corp-Solutions could raise up to EGP 700 mn from a securitized bond issuance in 4Q2021, upping its 2H2021 target from a previous EGP 500 mn. EFG Hermes Corp-Solution now joins SODIC, Contact Financial Holding, Edge Holding, Raya’s Aman, Tamweel Holdings and NUCA’s Al Taamir for Securitization in big ticket securitization transactions this year. We break it down further in today’s Speed Round.
HAPPENING NOW- Shoukry is in Manama for talks with Bahraini Foreign Minister Abdullatif bin Rashid Alzayani. Egypt’s Foreign Ministry sent out a tweet this morning of the two ministers meeting in the Bahraini capital. Shoukry arrived in Bahrain last night carrying a letter to King Hamad bin Isa Al Khalifa from President Abdel Fattah El Sisi.
Tomorrow is Islamic New Year. The nation will take Thursday, 12 August as holiday to mark the occasion.
Russian flights return to the Red Sea tomorrow: Hurghada International Airport is due to receive tomorrow its first flight from Moscow in six years as Russia’s flight ban finally comes to an end.
DRIVING THE INT’L BUSINESS NEWS AGENDA THIS MORNING-
Strong corporate earnings keeping stock market volatility at bay: A stellar season for corporate earnings is shoring up the stock market in a month which some analysts warned would be marked by volatility. The spread of the delta variant, combined with the seasonal drop-off in trading volumes that usually makes August a turbulent time in the financial markets, have had some worried about what is over the horizon, but a blockbuster US earnings season that is on course to break records has investors optimistic that the more pessimistic projections won’t come to pass. Analysts are now projecting that S&P 500 earnings will rise 90% y-o-y in 2Q2021, smashing previous estimates for 53% growth, according to the Wall Street Journal.
The spike in earnings isn’t just because last year was terrible: 2Q earnings are also so far outpacing those in 2019’s second quarter, before the world came to a grinding halt. One analyst told the WSJ that big US companies currently hold strong pricing power, as pent-up demand, savings made during the pandemic, and stimulus checks combined to make consumers more likely to accept price rises.
It was also a good quarter for Saudi Aramco, which posted its biggest quarterly profit since the end of 2018, according to Bloomberg. The oil giant reported 2Q net income of USD 25.5 bn, propelled by a surge in oil prices which are up by around 40% year-to-date.
The near four-fold hike in earnings will ease the pressure on Aramco, which may now be able to keep up with competitors including Shell and BP in raising its annual dividend, already the highest in the world at USD 75 bn. That would mark a rebound from the covid-induced slump that in June forced Aramco to raise USD 6 bn on the debt markets in order to pay its annual dividend.
TikTok owner ByteDance is tiptoeing toward a Hong Kong IPO despite Beijing’s escalating crackdown on its tech industry, the Financial Times reports, citing three people familiar with the company’s plans. The company shelved its plans for a US listing back in March under government pressure, but after addressing regulatory concerns it is now planning to go public on the Hang Seng either in the final quarter of this year or in early 2022.
Also making international headlines:
- Thousands have fled their homes on the island of Evia, to the east of Athens, as Greece enters a sixth day of wildfires that have erupted across the country amid its worst heatwave in 30 years. Two Egyptian helicopters joined French, Swiss and Spanish firefighting aircraft to aid the Greek emergency services and army in battling the blazes.
- The US Senate voted yesterday to advance the Biden administration’s USD 1 tn infrastructure bill, clearing an important procedural hurdle towards passing the key legislation after months of negotiations, the Associated Press reports. In a 67-27 vote demonstrating strong bipartisan support, senators agreed to hold votes on a final set of amendments to the bill, which represents the biggest investment in decades in America’s roads, bridges, airports and waterways.
** CATCH UP QUICK on the top stories from today’s EnterpriseAM:
- Interest rates on hold for another six weeks: The Central Bank of Egypt left interest rates unchanged for a sixth consecutive meeting on Thursday as policymakers look to preempt rising inflation and maintain Egypt’s high real interest rate.
- J&J coming today: Egypt’s first shipment of Johnson & Johnson vaccines is arriving today, though we don’t yet know how many doses we’re getting.
- SFE to push into education: The Sovereign Fund of Egypt will soon launch a new sub-fund to invest in the education industry.
YOUR COVID NEWS BULLETIN- China will try to distribute 2 bn doses of covid vaccines by the end of this year, Chinese Premier Xi Jinping said Thursday, according to Reuters reports. The government will also provide the global vaccine distribution scheme Covax with USD 100 mn to help it expand capacity. Chinese vaccine maker Sinovac has signed agreements with 20 other countries that will see it dispatch almost 900 mn shots. This comes in addition to the 770 mn doses China has already exported to other countries.
This makes Western pledges look pretty feeble: The US has said it would provide only a quarter of this amount while the G7 has collectively committed to distributing 1 bn doses.
Senegal on its way to becoming covid vaccine maker: Backed by the EU, Senegal signed an agreement with US company MedInstill to bottle covid vaccines, and plans to start manufacturing vaccines by 2Q2022 and produce 300 mn shots per year by the end of 2022, according to Reuters.
🏅 TODAY IN THE TOKYO OLYMPICS-
Tokyo 2020 has come to an end: The closing ceremony wrapped up in Tokyo just minutes before dispatch, bringing to an end an Olympic Games held under unprecedented circumstances. Giana Farouk was Egypt’s flag bearer at the event, joining athletes from across the world who marched into the Olympic Stadium before the symbolic flame was doused.
Has Japan warmed to the Games? The first ever Olympics to be held in the wrong year, Tokyo 2020 has been dominated by shots of empty stadiums and masked athletes, while as covid cases have risen, concerns have grown about the event gaining superspreader status. Despite the widespread domestic opposition to the Games in the lead-up to the competition, public opinion seems to have softened, perhaps as a result of Japan’s record medal tally.
Egypt had its most successful Olympics ever, bagging six medals including Feryal Ashraf’s historic victory in the karate on Saturday, which made her the first Egyptian woman ever to claim an Olympic gold.
📺 ON THE TUBE TONIGHT-
Pimp My Ride with a bit of Mad Max: This week we’re looking at reality TV shows you should tune into on your streaming platform of choice. We know many of you cringe when you read the words ‘reality’ and ‘TV’ put together, and those of you who don’t consider it a guilty pleasure. However, not all reality TV is the Kardashians pulling each other’s hair out… Car Masters: Rust to Riches has three seasons out on Netflix, and for the car enthusiasts of you, it’ll be sure to provide a kick. It’s a surprisingly well-thought-out series that shows the process of converting old cars and trucks into something special for trade, focusing on both the mechanics and aesthetics at the same time. It also provides a glimpse into the business of it all as you follow along the eclectic team at Gotham Garage and their tireless pursuit of a big pay day. The garage’s high-end clientele add an extra layer of enjoyment as you witness some of the weirdest car requests we’ve ever seen (hot tub car anyone?).
🥤 DRINK THIS TONIGHT-
Milkshakes galore: This heat needs something refreshing, and that’s exactly what’s on the menu at Shakes n’ Bakes. They have an impressive variety of anything that comes in a plastic cup, from smoothies to milkshakes and iced coffee, ensuring that even the pickiest drinker will find something to indulge in. Their milkshakes include Lotus, Twinkies, Maltesers, Oreo, Nutella, bubblegum, and coconut, while their smoothie offerings range from all kinds of lemon mint to mango and watermelon. If that doesn’t sound tempting and you’d rather have something to eat, they also offer smoothie bowls and cake cups that are moist and flavorful. You can find Shakes n’ Bakes at Walk of Cairo and Sheikh Zayed’s Americana Plaza.
🎤 OUT AND ABOUT-
The Color Run comes to Marassi this weekend, featuring “the happiest 5k” running event with live music and other events throughout the day. Tickets are being sold now.
💡 UNDER THE LAMPLIGHT-
Stephen King’s newest novel Billy Summers is “his best book in years,” according to the Guardian. The book follows a ‘hitman with a heart’ who only accepts assassination jobs if he feels the target is a bad person. While the irony is not lost on us, it’s hard not to fall in love with the morally-confused Billy Summers. When he decides to take one final job, he gets the help of college student Alice whom he rescues from her own violent ordeal. King’s latest is a surprising action-filled love novel full of heartbreak redemption, and retribution. The New York Times and Rolling Stone also can’t give enough praise to the book.
☀️ TOMORROW’S WEATHER- Us Cairo dwellers look like we’re getting some reprieve from the heat this week. According to our favorite weather app, temperatures aren’t likely to top the 40°C mark (so it’s just going to be really hot, not really, really hot). The Egyptian Meteorological Authority (EMA) is forecasting daytime highs in Cairo of 37-39°C.