Wednesday, 11 August 2021

EnterprisePM — NIB is not being wound down, but is being restructured.



Well, friends, we’ve made it through another week together — we wish you all a phenomenal long weekend with family and friends.

THE BIG STORY TODAY- The National Investment Bank, a development institution owned by the state, is not actually being wound down or liquidated, but is being restructured, NIB said in a statement earlier today. We have chapter and verse in this afternoon’s Speed Round, below.

ALSO IN BANKING- Banque Misr is reportedly going to be the first state-owned bank to issue green bonds, bank Vice Chairman Akef El Maghraby reportedly told Al Mal in an interview. We plan to dive deeper into the story in Sunday’s EnterpriseAM.

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

  • Travelers can now ask for J&J: J&J jabs and QR code-bearing vaccination certificates are now available to still-unvaccinated citizens and residents who need to travel, with requests to be responded to within 72 hours.
  • ADQ’s Agthia may finalize its acquisition of Atyab this month: ADQ Holding’s food subsidiary Agthia is in the final stages of acquiring 75% of Atyab brand owner Ismailia Agricultural and Industrial Investments in an agreement valued at up to EGP 3.2 bn.
  • Two commodity trading houses will build an EGP 2.2 bn bulk grain terminal in East Port Said under a contract with the Egyptian government.

THE BIG STORY ABROAD- It’s a dog’s breakfast in terms of international business news. The big story out of the Gulf is that UAE-based, formerly LSE-listed hospital operator NMC is preparing to exit administration (pdf), which it entered last year after it “ran into trouble last year after the disclosure of more than USD 4 bn in hidden debt left many UAE and overseas lenders with heavy losses,” Reuters said. NMC is no longer a player in Egypt, having sold its 51.5% stake in Alexandria Medical to Abu Dhabi Commercial Bank in a transaction first reported this past January. Alex Medical is now the subject of a heated (and fairly protracted) bidding war (here, here, here and here). NMC was a flag carrier of Mideast companies that were aiming to go public on the London Stock Exchange.

Further afield: Democrats passed a USD 3.5 tn budget bill, which passed 50-49 along party lines and could “complicate efforts” to get a USD 1 tn infrastructure funding package through the House of Representatives, the Financial Times reports. The Wall Street Journal and Reuters are also leading with the story.

MEANWHILE- The White House is going to call on OPEC to boost oil production as gasoline prices rise in the United States. Guess Uncle Joe is going to have to make nice with KSA at least a little bit?

KUDOS- Orascom Construction and Belgium-based BESIX were behind the successful (and gorgeous) transport of the King Khufu Solar Boat that took place last weekend. The transport required extraordinary technical feats to ensure that the oldest intact ship in the world remained undamaged, they said in an emailed statement. The boat now resides within a dedicated building at the soon-to-be-opened Grand Egyptian Museum.


A liter of Coca-Cola creates 346 grams of carbon dioxide emissions, the company’s data suggests — that’s a little less than half the carbon footprint of a single mega roll of Charmin Ultra Soft toilet paper. This type of math is going to be increasingly common among listed companies of all sizes (and, possibly, even for non-listed businesses that want finance from major banks). Go read Companies grapple with climate change math in the Wall Street Journal.

You’re finally going to be able to stream CNN next year. Except, not really? CNN plans to launch a for-pay streaming service in 2022 — but it won’t be the CNN that you can watch on satellite or as part of a pay-TV bundle. Instead, the company is planning to launch a separate streamer — and Twitter is awash in fairly high-profile journalists saying that they’re joining CNN+ for launch next year. Recode’s Peter Kafka isn’t terribly sure that this makes sense. CNN+’s website (it’s just a placeholder right now) is here.

A number of Wall Street banks are revising downwards their outlook for US treasury yields, thanks to a rally this summer in the USD 22 tn US government bond market — a bedrock of the global financial system, the Financial Times reports. The 10-year US treasury yields, which sank to 1.13% this month amid sharp increases in state debt, will likely not top 2% by the end of the year as previously predicted, but are likely to rise to 1.8% by December — from 1.31% at present, investment bank analysts forecast. “Getting to 2% from here would be a pretty sharp adjustment,” one bank strategist says, “There’s a feedback effect which means risk assets will be hit and some money will flow back into Treasuries. It’s a natural brake on rising yields.”

US cyber security firm NortonLifeLock has agreed to acquire its European counterpart Avast in an agreement worth more than USD 8 bn, according to a press release. The move comes as worries about cybercrime intensify and Norton aims to swoop in with its online protection services. The combined business will be listed on Nasdaq but be dual headquartered in Prague and Arizona.

Uber and Toyota-backed flying taxi firm Joby Aviation has listed on the New York Stock Exchange today with the aim of gaining USD 1.6 bn in new financing, according to a press release. The listing will be conducted through the merger with a SPAC called Reinvent Technology Partners, in the latest SPAC-fueled IPO. Joby has promised to build and operate a commercial fleet of aerial taxis by 2024, in what will be a more environmentally friendly alternative to ground-based transportation. The California-based firm is a market leader in the flying aircrafts industry which is estimated by Morgan Stanley to be worth USD 1 tn by 2040, writes Bloomberg.

(all times CLT)

We couldn’t highlight reality shows without mentioning these gems: Romance-based reality shows are a guilty pleasure for (some of) us at the Enterprise World HQ, acting as the subject of great balcony conversations during breaktime. Netflix has quite a few on offer, each more dramatic and scandalous than the next. Are You The One is an epic saga of 10 men and 10 women put together in a house and challenged with figuring out who their “perfect match” is — as decided by a team of matchmakers on the show. There’s also Love is Blind which aims to set up more ‘sustainable’ reality show couples by having participants have conversations without ever physically seeing who they’re talking to. When they start to have feelings for each other, they propose and act as a married couple for a few weeks before standing at an altar and deciding if they want to stay married. There’s also a show called [Redacted] Beasts that has a similar premise, but without the marriage bit. Finally, Too Hot To Handle, is a hormone-driven show that puts a ton of attractive young people together at a destination resort and tells them there’s a ban on physical contact.

[Editor’s note: The olds among us would rather gouge our eyes out than watch a single episode of any of the above. The age gap is alive and well at Enterprise.]

[Except that one of the olds just found that two of the other olds love them. There are no words.]

The Premier League is back on Friday: The first match of the season sees Arsenal and newly-promoted Brentford face off on Friday starting at 9pm. Saturday has a flurry of games throughout the day to keep you busy: Man United will play Leeds at 1:30pm, while at 4pm Leicester City is up against Wolves, Chelsea take on Crystal Palace, newly-promoted Watford meet Aston Villa, Everton clashes with Southampton, and Burnley kick off against Brighton. Finally, also-newly-introduced Norwich City is up against Liverpool on Saturday at 6:30pm.

Also making our Friday better is La Liga, which will start the season with Valencia and Getafe tomorrow at 9pm. On Saturday, Osasuna is playing Espanyol at 5pm, Mallorca is up against Real Betis at 7:30pm, Cadiz will play Levante at 7:30pm, and Alaves will end the day with a match against Real Madrid at 10pm.

IN OTHER FOOTBALL NEWS- Messi has officially signed with PSG: Paris Saint-Germain has agreed with Lionel Messi on a two-year contract worth GBP 25 mn per year after tax plus bonuses, with the option of extending the agreement for another year, reports Sky Sports. The footballer will also receive a GBP 25 mn sign on fee and will retain his no. 30 jersey which he wore for Barcelona before his emotional departure.

PSG will play their first match in France’s Ligue 1 on Saturday at 9pm against Strasbourg. It is unclear whether Messi will be in the lineup.


It’s simple — go to Eatery. We’re sure the one in Diplo is just fine, but we’re very (very) partial to the location at Seashell. On the dinner menu, the lobster linguini is to die for (and has been consistently good on three separate visits) and the tomahawk steak (seared tableside) is similarly good. In fact, it’s the first time we’ve ordered meat in at Egyptian restaurant that was, if anything, slightly under-done (and not charred to a crisp). If you’re offered butter on top, do yourself a favour and say “Yes.” Eatery bills the tomahawk as being enough to feed two people, and they’re right. But real carnivores will want to skip lunch and order it for one. Are you a teenager with a toddler’s appetite for culinary experimentation? Go with their pizzas (thin crust, crazy thick and wonderfully doughy outer edges) or the spaghetti in red sauce. In the mood for breakfast? The resident 14-year-old recommends the waffles, and the eggs and sausages were perfect. Expect impeccable (and fast) service.

(all times CLT)

J.J Quartet are performing at The Room Garden City tomorrow at 9pm. The band plays bop-era and post bop-era jazz.

Standup comedy crew The Elite are taking the stage at El Sawy Culturewheel tomorrow at 8pm.


Keeping up talk on climate change after the alarming UN report: The Uninhabitable Earth: Life After Warming by David Wallace-Wells started off as an article in New York Magazine. It immediately gained popularity and became the most read article in the magazine’s history, prompting Wallace-Wells to turn the subject matter into a book. The long-form climate change prose tries to imagine what the world would be like if runaway climate change persists and covers everything from urban living to the human body to geopolitics. The Uninhabitable Earth is a call to action that puts a devastating future into descriptive words and scenarios. If you think rising sea levels are the worst of what is yet to come, you’re barely scratching the surface. Think food shortages, refugee emergencies, climate wars and economic devastation — all of which we can already start to see now.

☀️ TOMORROW’S WEATHER- Expect temperatures of 40°C over the weekend, which after last week feels like a reprieve. The mercury will fall to 26°C at night, our favorite weather app indicates. Sahel is the place to be during the long weekend, with temperatures between 32-34°C over the next few days and 22°C during the nights.


No, NIB will not be liquidated — but it is restructuring

The Madbouly government is NOT liquidating NIB, only restructuring it: The state-owned National Investment Bank (NIB) is not being liquidated, Ashraf Negm, Vice Chairman and MD of NIB, said in a statement (pdf) this morning, refuting a news report in Al Borsa (pdf) that was based on an IMF review (pdf). We picked up the story earlier this week and were unsuccessful at the time in obtaining comment from the NIB or the Planning Ministry.

Where did the notion that the development bank was being liquidated come from? The IMF said in its recent review of reforms agreed as part of Egypt’s USD 5.2 bn standby loan program that the country was setting out to “reduce fiscal risks [in part by] winding down the National Investment Bank (NIB), a publicly owned development bank.” The government agreed with the Fund to come up with a plan to mitigate risks posed by the bank’s financial position. A Deloitte audit commissioned by the government has not been made public, so it is unknown how much the bank actually owes.

So what’s happening with NIB? “Work is currently underway to implement a plan to restructure the bank, which the government announced three years ago,” the statement said. The main elements of the bank's restructuring focus on rescheduling and paying down the bank's obligations according to a clear and agreed timetable, Negm noted. The plan will see NIB resolve “financial entanglements” with government institutions. “Part of these entanglements has already been completed with a number of government institutions, whereby the bank acquired a number of high-value assets,” Negm added.

Beyond external obligations, NIB is planning on restructuring internally with an eye towards maximising the value of its assets. With that in mind, NIB will undergo an administrative restructuring in the upcoming period.

CLARIFICATION- In our story earlier this week on NIB, we quoted Prime senior economist Mona Bedeir on factors that may have resulted in the financial position inherited by NIB’s current management team. Neither Prime nor Bedeir provided data or other information for the story — which, as we clearly noted, was first broken by Al Borsa based on the IMF’s review document (above). Prime has asked to “clarify that Mona Bedeir’s comment was limited only to the analytical aspect in terms of dissolving the entanglements between the Ministry of Finance on one hand and the Ministry of Public Enterprise on the other hand. She did not provide any comment on the technical management of National Investment Bank or the management of its assets. Prime apologizes if any offense was taken.”


NTRA releases report on 1H2021 telecom complaints, operators to pay EGP 2 mn in compensation to users

NTRA mandates EGP 2 mn in penalties for Egypt’s telecoms following complaints: The National Telecommunications Regulatory Authority (NTRA) has mandated that all four telecoms reimburse users a combined total of EGP 2 mn over service failures that took place during 1H2021. Those who phoned in to the authority will receive a sum based on the type of complaint. Orange will kick in 65% of the refunds owed, while Vodafone is responsible for 23%, Etisalat 10% and Telecom Egypt (We) 2%.

The complaints about poor service were staggering: Subscribers made nearly 118k complaints in 1H2021 to the NTRA on its hotline (#155) or through WhatsApp or other open channels. Network operators responded to 92% of all complaints and had an average response time of two days, the NTRA said in its first ever semi-annual report, which breaks down user complaints about telecom services during the six months ending June 2021.

What were people complaining about? It comes as no surprise that over half of the complaints were about ADSL services at 52%, followed by mobile services at 31% and home phones at 17%.

ADSL complaints by provider: Orange had the most complaints out of Egypt’s four service providers, at a rate of 3,424 complaints per 100k subscribers. The top three issues brought to the NTRA were the inability to cancel subscription (41%), line suspension without customer knowledge (33%), and the quality of service (14%). Next up was Etisalat with 2,413 complaints per 100k subscribers, with 51% of users complaining about the inability to cancel a subscription, 34% of sudden line suspensions, and 7% of service quality. Meanwhile, Vodafone had a rate of complaints of 1,274 per 100k subscribers with the main issue being the inability to cancel a subscription, and We came in last with 284 complaints per 100k subscribers with the main issue being the quality of service.

We and Orange tied for the highest rate of complaints over mobile services, followed by Vodafone and then Etisalat. For people calling in about home phone lines — which are only provided by state-owned WE — the complaint was mostly about the line being out of service (67%).

Other measures NTRA is taking to ensure service: ADSL providers will update their subscription system starting October 2021 to ensure that customer requests are approved within a week. ADSL providers shall also notify users through an SMS when they consume 50%, 75%, and 100% of their bundle to enable them to keep track of their consumption. The NTRA will also launch a service targeting deaf users by allowing them to send in requests through the use of video conferencing technology.

You can check out the infographic here (pdf) or read the press release.


National projects top Madbouly cabinet priorities this week

The Madbouly Cabinet designated a number of projects as “national projects” during its weekly meeting today, according to a cabinet statement. Starting from now, any development on land owned by Public Enterprises Ministry companies, and land owned by state banks, in addition to land owned by local governorates will be considered a national project. Upgrades to our irrigation canal infrastructure will also be designated as national projects.


Earnings watch: Beltone, NBK Egypt, Credit Agricole Egypt, GSK, Obour Land, Arabian Cement

EARNINGS WATCH- Beltone Financial reported net income of EGP 4.7 mn in 2Q2021, up from a loss of EGP 12.1 mn in 2Q2020 and net income of almost EGP 3.8 mn in the first quarter of this year, according to an earnings report (pdf). The company’s revenues reached EGP 95.9 mn in 2Q2021, rising considerably from 2Q2020 revenues of EGP 62.09 mn.

NBK Egypt reported declining net profits this quarter reaching EGP 290.4 mn, down from EGP 350.7 mn during 2Q2020, according to the bank’s earnings release (pdf). The company has also reported revenues of EGP 796.2 mn over the quarter, down from EGP 834.90 mn in 2Q2020.

Credit Agricole Egypt saw its net income grow to EGP 388.6 mn during 2Q2021, up from EGP 261.1 mn in 2Q2020 according to its consolidated financials (pdf).

GlaxsoSmithKline’s Egypt unit saw net profit contract to EGP 18.0 mn in 2Q2021, down from EGP 79.6 mn in the first quarter of 2020, according to an EGX disclosure (pdf). Revenues at the company reached EGP 435.4 mn in 2Q2021, down from EGP 507.8 in 2Q2020.

Obour Land net profits reached EGP 74.2 mn in 2Q2021, up 3% y-o-y from the EGP 72 mn the company reported in 2Q2020, according to a Obour Land earnings release (pdf). Revenues at the company contracted 4% y-o-y to EGP 639.2 mn over the quarter, down from EGP 666.2 mn in 2Q2020.

Arabian Cement losses narrowed to EGP 17.0 mn in 2Q2021 from EGP 21.5 mn in 2Q2020, according to a company statement (pdf). The company’s sales dropped to EGP 532.4 mn in 2Q2021, from EGP 621.1 mn in 2Q2020.


The EGX30 rose 0.3% at today’s close on turnover of EGP 1.74 bn (24% above the 90-day average). Local investors were net buyers. The index is up 0.4% YTD.

In the green: Heliopolis Housing (+3.0%), Fawry (+1.6%) and Speed Medical (+1.4%).

In the red: Sidi Kerir Petrochemicals (-4.5%), Raya Holding (-3.1%) and Ezz Steel (-2.3%).


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.

1-3 September (Wednesday-Friday): Digi Sign Africa, Cairo International Convention Centre, Cairo, Egypt.

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.

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.

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

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

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.

22-25 September (Wednesday-Saturday): Cityscape Egypt, Egypt International Exhibition Center, Cairo, Egypt.

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.

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.

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.

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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