EnterprisePM — Will five state companies offer stakes on the EGX in FY2021-2022?

Enterprise turns seven this week, ladies and gentlemen. We wouldn’t have gotten this far without you, dear reader.

THE BIG STORIES TODAY-

#1- Will five state companies offer stakes on the EGX in FY2021-2022? Finance Minister Mohamed Maait told CNBC Arabia that around five companies could be offering a portion of their shares for sale on the EGX before the end of the current fiscal year. We were already told to expect two or three companies to IPO before the end of 2021, with state-owned E-Finance saying it plans to offer 14.5% of its shares to the market in 4Q2021.

#2- Could Islamic Cairo host the region’s first comprehensive “innovation zone”? Rachid Mohmaed Rachid’s Bidayat will study the possibility of developing the historic Bab Al Azab area in the vicinity of the Cairo Citadel into an innovation zone that will support SMEs in the fields of architecture, furniture, jewelry, and other design, under the terms of an MoU signed with the Sovereign Fund of Egypt, Rachid told Bloomberg Alsharq. Bidayat invests in creative brands in the Mediterranean region and is a sub-fund of the Swiss-based Alsara Investment Group. It recently acquired an undisclosed stake in homegrown designer handbag brand Okhtein.

^^ We’ll have more on both these stories in tomorrow’s edition of Enterprise AM.

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

• Alameda to double Egypt investments in the next 5 years: Healthcare provider Alameda plans to invest EGP 5 bn over the coming 3-5 years to expand its services in Egypt.
• Banque Misr to receive largest-ever syndicated loan: The bank is in the process of obtaining its largest-ever syndicated loan worth about USD 1 bn.
• E-invoicing rollout rolls on: Joint stock companies and investment companies in Cairo will have to register with the government’s electronic invoicing platform and begin issuing digital invoices by 15 December.

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THE BIG STORY ABROAD-

The global economy is holding its breath as China’s property developer Evergrande shares drop to an 11-year low as a deadline for interest repayments on two of its notes looms this Thursday. The company’s shares dropped 10.2% to HKD 2.28 on top of an earlier 19% drop, Reuters, reports. Stocks in the US also fell, with indexes recording their worst day of trading in weeks, as investors increasingly expect Beijing to allow Evergrande to default, inflicting losses on shareholders, the Wall Street Journal reports.

The company is currently sitting on more than USD 300 bn in debt — with USD 7.4 bn in bonds due next year, making it quite possibly the world’s most indebted company. Spillover risks had China sovereign credit default swaps rise to a near one-year high, while the cost of insuring against European corporate bond defaults rose to a three-month high, Reuters reported.

As of dispatch time, the US market was also experiencing major declines, with futures recording their worst results in weeks. Futures for the S&P 500 dropped 1.4% and futures on the Dow Jones Industrial Average declined 1.6%.

ADQ’s Xmas party will certainly be a full house: Abu Dhabi’s sovereign wealth fund (ADQ) has been ratcheting up its hiring of investment bankers from Western banks over the past year, raising their staff to 120 from 20 last year, sources close to the matter tell Reuters. The influx of bankers bodes well for the fund’s transactions pipelines at home and abroad.

And we’re hoping that continues to include us: ADQ has thrown its heavy weight on a number of major transactions. Most recently, it joined Aldar in launching a mandatory tender offer for up to 90% of upmarket developer Sodic. ADQ’s food subsidiary Agthia recently finalized its acquisition of 75% of Atyab brand owner Ismailia Agricultural and Industrial Investments.

HAPPENING NOW- Thousands have been evacuated in Spain’s Canary Islands after a volcano eruption yesterday caused widespread damage, though no fatalities, Reuters reports. The volcano on the island of La Palma — which spewed out some 20 mn cbm of lava yesterday — had last erupted in 1971.

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FOR TOMORROW-

Egypt will address the UN General Assembly tomorrow afternoon, according to a tentative schedule being carried by the National and WIO News, though there’s still no official word on whether President Abdel Fattah El Sisi will deliver the address, or make an appearance in New York. At least 83 world leaders are expected to attend in person, despite being encouraged by the UN to send in pre-recorded videos of their speeches instead.

Foreign Minister Sameh Shoukry is in New York for the UN General Assembly’s general debate, which kicks off today and finishes on 27 September.

It’s Fed day: The US Federal Reserve’s Open Market Committee will meet tomorrow and Wednesday to review interest rates, with emerging markets (including us) waiting with bated breath on whether the Fed will begin its tapering. Pressure has been building on the Fed to take a more hawkish stance to combat inflation by bringing its stimulus program to an end and start raising interest rates earlier than planned. But a slight slowdown in US consumer price inflation last month could give the Fed a breather and relieve pressure for a policy change.

???? CIRCLE YOUR CALENDAR-

EFG Hermes’ fourth Virtual Investor Conference continues today, running through to 21 September with the theme of “After Reflation — FEMs in 2022.”

IMF + EBRD webinar: Public Enterprises Minister Hisham Tawfik will speak during a webinar hosted by the IMF and the European Bank for Reconstruction and Development (EBRD) on Wednesday, 22 September at 3pm CLT. The gathering is running under title of “State-owned enterprises in the Middle East, North Africa and Central Asia,” with Tawfik set to speak on the role of the state in the economy alongside five other panelists including the IMF’s Middle East and Central Asia head Jihad Azour and the EBRD’s head of external relations Alan Rousso. Check out the agenda here.

The Cityscape real estate investment conference gets underway this week at the Egypt International Exhibition Center. The event runs from Wednesday, 22 September through Saturday.

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

☀️ TOMORROW’S WEATHER- The temperature is pretty much the same tomorrow, only slightly chillier at night. Expect highs of 39°C during the day and lows of 22°C in the evening.

Big tech companies are eliminating competition by buying out their smaller rivals faster than ever, the Financial Times reported, citing data from Refinitiv which showed that tech companies spent no less than USD 264 bn buying rivals worth less than USD 1 bn, over a record 9.2k transactions, since the beginning of the year.

This isn’t sitting well with regulators: Officials from the White House, regulators and Congress members have accused tech companies from Apple, Facebook, Google and Amazon of stifling competition. The Fed is already retroactively investigating Facebook’s acquisition of Instagram and WhatsApp, and have said they may pry into other deals that have the potential to reduce healthy market competition. Tech companies have been under a lot of heat recently, with policymakers last year starting to respond to the growing so-called “techlash” against the influence of tech companies.

What needs to change? Regulators say they must reexamine regulatory loopholes that allow some transactions to “fly under the radar,” including a stipulation that deals below USD 92 mn do not need to be reported to regulatory authorities. Over the past decade, Apple, Facebook, Amazon, Google and Microsoft made 819 such acquisitions, according to a Federal Trade Commision study.

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Is the global housing market broken beyond repair? Property prices have been rising, straining the purchasing power of aspiring homebuyers, and potential renters too. Bloomberg reports, in a visual feature that explores how aspiring homeowners are feeling these effects around the world. From the US to Argentina, Australia, Canada, Singapore and Ireland, the issue of housing inequality is creating a new generational divide between those who could afford to buy property, and younger generations who fear they will never be able to afford a home.

(Surprise, surprise) Big oil companies might miss out on the UN’s biggest climate event of the year, the Wall Street Journal reports, citing people familiar with the matter. The reason: The prerequisites were too tough. What prerequisites you may ask? Committing to a science-based plan to reduce carbon emissions. Some, including BP, reportedly wanted to be involved, but will maintain a low profile.

YOUR MANDATORY COVID STORY- Pfizer and BioNTech say their vaccine is safe for use in children as young as five, after a late stage study involving 2.2k participants showed a strong immune response in children inoculated with a 10 mcg dose, one third of that administered to adults. The companies said they had not yet determined an efficacy rate for the vaccines in children. They will present their findings to US regulators, and could conduct a study in infants aged six months to five years in 4Q2021.

???? ON THE TUBE TONIGHT-

(all times CLT)

Netflix sits on Emmys throne: Netflix took home major awards in drama and limited series, with the streaming giant nabbing a total of 44 wins. Netflix's The Crown, which depicts the reign of Queen Elizabeth II, was honored as best drama, with the show’s fourth season taking a total of 11 Emmy awards, including all four acting honors being snapped up by its cast: Olivia Colman, Josh O’Connor, Gillian Anderson and Tobias Menzies. The gripping and bittersweet fourth season draws heavily on the maddening saga of Princess Diana and Charles, while portraying Queen Elizabeth in a more critical light. With all its shameless glory, season 4 is definitely the most successful yet — brimming with superb acting, writing and overall production standards.

Meanwhile, Netflix’s The Queen’s Gambit took the most wins for a miniseries for the year, also receiving a total of 11 awards. The chess drama starring Anya Taylor-Joy won the coveted best limited series award.

Other notable winners: Ted Lasso won outstanding comedy series, with lead actor Jason Sudeikis winning outstanding lead actor in a comedy series. Meanwhile, Mare of Easttown took three acting awards for a limited series or TV movie, with Kate Winslet winning the outstanding lead actress award.

You can check out the full list of winners on here.

⚽ The only match in La Liga today: Barcelona will be facing Granada at 9 pm.

Serie A also has a single match on today: Napoli and Udinese will hit the field at 8:45 pm.

???? OUT AND ABOUT-

(all times CLT)

Downtown standup comedy is taking place today at The Tap West in 6th of October City from 9-11 pm, with comedians Islam Amin, Mohamed Kamatcho, Mohamed Dawood, and Khaled El Shoky taking the stage.

It’s Salsa night today at Cairo Jazz Club 610 in Sheikh Zayed with dance instructors Rasha Sadek and Salah Eissa from Soul Motion Studio from 7-8 pm.

Acoustic band Stings and Kicks will be performing tonight at ROOM Art Space in New Cairo at 9 pm.

???? UNDER THE LAMPLIGHT-

A Calling for Charlie Barnes by Joshua Ferria, follows the protagonist who is known for his trail of bankruptcies and is obsessed with becoming a self-made mn’aire. But against all odds, he still believes in himself. Fast forward until he’s in his late 60’s, he has a strained relationship with his kids, a failed marriage, and a few failed business ventures on his sleeve. The narrator of Charlie’s story is his son Jake, who we see more and more of in the narration, until he presents us with a shocking final act. The book extends beyond the illusion of the so-called American dream to portray the actual cost it has on one’s self.

EARNINGS WATCH- Alexandria Container and Cargo Handling Company’s bottomline dropped 6% y-o-y in FY2020-21 to EGP 1.4 bn from EGP 1.5 bn, according to the company’s financials (pdf). Revenues dropped 7% y-o-y to EGP 2.4 bn from EGP 2.6 bn.

THE MARKET ROUNDUP-

The EGX30 fell 1.6% at today’s close on turnover of EGP 1.2 bn (23.3% below the 90-day average). Foreign investors were net buyers. The index is down 1.2% YTD.

In the green: Abou Kir Fertilizers (+0.2%).

In the red: Egyptian Resorts Company (-6.2%), Heliopolis Housing (-5.6%) and MM Group (-4.6%).

Cairo is back on the Economist’s Safe Cities Index — and it’s still not particularly safe. Cairo has been ranked the 57th safest city out of 60 major urban centers assessed by the Economist Intelligence Unit for its 2021 Safe Cities Index.

Wait, but how can you measure the “safeness” of a city? The EIU’s biennial index grades each city using a total of 76 indicators grouped within five broader metrics of safety: digital, health, infrastructure, personal and environmental. The performance of each city across these five categories is then aggregated to produce an overall ranking.

Cairo ranked below average in all categories, and landed near the bottom of most. It scored particularly badly in the environmental security category, in which only Kuwait City stopped it from landing rock bottom.

And it slipped two places in the overall rankings from the last report in 2019 due to declining scores in the infrastructure, health security, as well as the environmental safety categories.

Health, personal safety and infrastructure rankings continued to decline: Since first being included in the index in 2017, Cairo’s ranking in these three categories has declined with each new report, and 2021 was no exception. Its health score fell one place to 57th, and was held back especially by poor ratings for public health services and a low number of doctors and hospital beds. The EIU ranked the availability of healthcare as adequate and gave Cairo full marks for mental health service provision. Interestingly, the EIU handed Cairo a near-perfect ranking for covid-19 mortality despite Egypt having one of the highest mortality rates for the virus in the world.

Cairo’s infrastructure ranking fell to 56th from 53rd in 2019. The city received very low ratings for its lack of basic housing, the high numbers of people living in slums and its poor rail network, and received average grades for its road system and water infrastructure. The infrastructure ranking was lifted by good ratings for its power network, transport safety enforcement, and road traffic incidents.

Keeping it in perspective: The government has earmarked EGP 933 bn in public investment spending this current fiscal year, and expanded the EGP 600 bn universal healthcare system over the past three years. That said, the government’s first target for infrastructure development and the rollout of the healthcare system has been the long-neglected governorates outside of Cairo and Alexandria, so it is perhaps not surprising that the fruits of these programs is not being seen in Cairo.

Personal safety results were mixed: Despite the city’s personal security ranking rising two places to 51st, the rating dropped quite significantly to 48.1, from 59.3 in 2019. According to the EIU, Cairo remains at risk of violence, particularly from civil unrest, while comparatively low spending on social security and a lack of laws safeguarding women’s safety from domestic violence and harassment weighed on the ranking. Interestingly, the city actually scored favorably on the metrics measuring actual violence against women, and despite high levels of poverty, received a good score for economic secuitry and levels of income inequality.

Environment: Cairo was ranked second-to-last in the environmental category, mainly due to its poor waste management system, the high volume of waste, water stress, and the low use of sustainable energy sources.

The poor environmental ranking masks some positives though: Cairo received full marks for renewable energy incentives and was recognized for its initiatives to promote a greener economy. Since the completion of the 1.5 GW Benban solar park, Egypt’s been a hotbed of renewable energy investment. The government has also been spearheading a national project to swap out petrol-powered cars for vehicles that run on compressed natural gas (CNG), reducing nitrogen oxide emission by 30-60% and carbon-monoxide emissions by 97%.

The bright spot: Cairo’s digital security ranking moved up four places to 54th in the world, helped by a strong privacy policy rating and good cyber security. The ranking was held back by the country’s lack of public-private partnerships in the digital sphere and insecure internet servers. Egypt saw a sharp rise in the use of digital services in 2020, including social media, financial technology, and e-commerce platforms. Last year, Egypt saw a 2.9% y-o-y increase in mobile connections and an 8.1% y-o-y increase in internet usage. As of January 2021, Egypt had a mobile penetration rate of 92.7% and an internet penetration rate of 57.3%

13-21 September (Monday-Tuesday): EFG Hermes’ fourth Virtual Investor Conference.

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

21-22 September (Tuesday-Wednesday): The Federal Reserve meets to review interest rates.

22 September (Wednesday): IMF + EBRD “State-owned enterprises in the Middle East, North Africa and Central Asia” webinar.

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.

30 September (Thursday): First tranche of overdue subsidy payouts will be handed to eligible exporters.

30 September (Thursday): Direct flights between Egypt and three Libyan airports resume.

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): Deadline for state-owned companies and government agencies to sign up to e-invoicing platform.

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.

28 October (Thursday): Second tranche of overdue subsidy payouts will be handed to eligible exporters.

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, Egypt International Exhibition Centre.

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.

15 December (Wednesday): Deadline for joint stock companies and investment companies in Cairo to join e-invoicing platform.

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.